Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
ADMISI London Wheat Report for 13 February
- February 14, 2024
- ADMISI Grains Team
- Follow us on Twitter @ADMISI_Ltd
London Wheat Report
Another light volume day on London and another dip in the price. July24 opens its account, trading 10 lots at 172 (-2.95 on the May24/Jul24 spread).
The Matif milling wheat old crop market has inverted and the March24/May24 spread has seen some serious action of late.
Chart source: Reuters
This is mainly due to the large fund short position which is being rolled forward as we approach expiry on the March, but also potentially a short term liquidity squeeze with decent French export commitments and not a lot of farmer selling.
The French Ag ministry has reduced its estimate of the French soft wheat planted area to 4.36 million hectares, down from an initial forecast of 4.49 million in December and 7.7% below last year’s area. This is apparently the second lowest in 30 years. They cut the winter barley area estimate to 1.27 million hectares from 1.31 million previously. That is now down 6.6% from 2023 but in line with the average of the past five years. For winter rapeseed, France’s main oilseed crop, the 2024 area was trimmed to 1.34 million hectares from 1.35 million expected in December, now 0.6% below last year’s level but nearly 16% above the five-year average.
US CPI comes in higher than expected at 3.1% vs. 2.9%, this inevitably strengthened the USD and put some pressure on the Chicago contracts.
Contact the ADMISI Grains and Oilseeds Derivatives Brokerage team
Ryan Easterbrook or Aaron Stockley-Isted
Phone: +44 (0)20 7716 8477 or +44 (0)20 7716 8140 Email: intl.grains@admisi.com
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