Written Commentary
London Wheat Report
Source: FutureSource
Fighting rages on in Bakhmut with Kremlin forces grinding further and further towards an apparent victory. Not going to change the scene too substantially. Chinese congress pegged a GDP growth target of 5% – slightly uninspiring, would have thought they may have gunned it a bit more. Interesting is quite an increase in defence spending to 7.2% of GDP and a pledge to become self-sufficient in food production. .S. stock indexes rose on Monday as Treasury yields pulled back further ahead of Federal Reserve Chair Jerome Powell’s testimony and jobs data this week that could offer fresh cues on the trajectory of interest rates.
Well, wheat markets were once again performing like Man United were yesterday, getting slammed once again. Chicago futures were on the downwards turn again with May-23 breaking through the 700 support line, last trading at 696.75/bu at time of writing and hitting a trading low today of 693.75/bu – we thought it was oversold last week when it tested the 700 barrier. Russian wheat continues to dominate and will do. Market expectations are Black Sea renewal will very much go through and Ukrainian exports will continue to flow. Ukrainian weekly export pace week ending 2nd March increased 25% to 1.3Mmt. We really do look like we are hitting a very bearish run now with little fundamental appearance on upside for old crop for certain. US southern plains continue to be dry but with apparent rain on the way.
Matif wheat followed US markets lower with May-23 settling down €4.00 on yesterday at €271.25/t. Volumes traded were pretty average. Physical trade remains stagnant on the continent. London wheat was also lower on the back of Matif. May/Nov 23 spread was trading at -0.5. Volumes pretty light.
Chicago soybeans were the on up, bit of a change from the seas of red in the grains markets. Market chatter was that Argentinian soybean crop could now drop below 30Mmt VS USDA 41Mmt. This could increase their import needs above what logistically can be imported to meet World product demand. Again, take this as chatter rather than fact currently. Brazilian sales continue to dominate although the Brazilian farmer is selling at a slower pace than in prior years according to Safras. Brazilian bean harvest is now approaching 50% complete. USDA announced 100kt of corn to Japan and 182kt of corn to an unknown destination. US corn is still trying to find export success, plenty of market chat but little actually appearing. Ukrainian Feb-23 sunflower exports fall to lowest level of 2022/23. Matif rapeseed May-23 pushed lower, settling down €8.75 on Friday at €530.50/t.
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Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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