ADMISI London Wheat Report for 13 October

A somewhat directionless start to the week today as global wheat was unable to decide on which way it should head. London front month looked to end the day marginally higher, stuck between the ongoing £165-£167 price range. Matif wheat saw slimmer volumes once again following Chicago wheat fractionally lower. A stronger dollar was clearly not enough to bolster the EUR-denominated French wheat contract.

It was reported today that France is heading for its biggest wheat stockpile in twenty years as a collapse in demand from both Algeria and China narrows export options. This news comes despite merchants profiting from slow Russian shipments to steal away sales to Egypt and Asia. The lack of French exports to Algeria and China in the past year due to diplomatic tensions with Algiers and Beijing cutting overall imports means the European Union’s biggest wheat producer now faces a surplus of 4 mmt annually. The impact of reduced demand was less visible last season after a poor harvest resulted in the lowest French soft wheat exports to non-EU countries this century at 3.5 mmt. According to analysts, exports should rebound to 7–8 mmt, but not enough to absorb a surplus from an improved harvest, pushing stocks to a 21-year peak.

Further east, much to the dismay of US soybean producers, China’s soybean imports in September reached the second-highest level on record. China, the world’s top soybean buyer, brought in 12.87 mmt in September, according to the General Administration of Customs, up 13.2% from 11.37 mmt a year earlier. Earlier this month, U.S. President Donald Trump said he hoped to discuss soybeans with President Xi during their upcoming meeting in South Korea but later cast doubt on whether the meeting would actually happen, dimming hopes for renewed Chinese purchases of U.S. soybeans.