ADMISI London Wheat Report for 21 December

Wheat markets globally were on the up today! Chicago wheat saw its highest gains since the start of December. There was little new news and the re-hashed story line of ‘’unfavourable Argentinian weather and crop doubts’’, along with ‘’unfavourable US weather’’ lead to firming of Wheat contacts. In Argentina according to the Hightower report “Planting is well behind, with only 50.6% completed as of Dec. 15. Conditions are reported at 19% good/excellent versus 85% last year. Some areas that would normally require replanting may be abandoned for this year.” Temperatures in the US are below freezing in the great planes and many question how much damage this will give to the wheat crop. Commodity funds were net buyers of CBOT soybeans, soyoil, corn, wheat and soymeal futures contracts on Tuesday, traders said. French wheat futures were up across the board. March Milling wheat was supercharged trading up to EUR 305.25/ Tonne +8.75 on the day.

Iraq were believed to have bought 150,000 tonnes of Australian wheat today, a larger amount than expected. The purchase was believed to involve around 100,000 tonnes bought at an estimated $461 a tonne and 50,000 tonnes bought at around $496 a tonne. Ukrainian grain traders union (UGA) have asked the government to give priority of electricity supplies to the grain silos in order to prevent damage to harvests. Production processing at grain storage facilities had become almost impossible due to Russia’s targeting of Ukraine’s energy infrastructure with missile and drone strikes since October, the UGA was quoted as saying in the 13 December report. With about 10M tonnes of grain storage capacity lost due to the ongoing conflict with Russia, the association said Ukraine could not “afford to lose the harvest that was collected with incredible efforts”. Just what the Ukrainian government will do off the back of this will be answered in the coming days/ weeks.

Another slow day on the London wheat market with around 250 lots traded across the board. Majority of the volume traded was on the May 23 contract with just over 200 lots. January 23 traded today for 1 lot @ 227.05 the last time January traded was 12^th October 2022 at a price of £287.25/ Tonne.  March 23 also saw a market quoted on screen. Although nothing was done, it shows some appetite to grow the 22 lots of open interest on this contract.

2…..days…..to……go…..