ADMISI London Wheat Report for 19 October

Wheat markets began the day on the charge, overnight news that Russia have promoted Chechnya veteran nicknamed  “General Armageddon’’ lead many news outlets to question if this meant Russia was any closer to using nuclear weapons over the Black Sea. This also lead others to believe what good the talks between the UN and Russia on extending the Grain Corridor passed the end of next month could actually do if nuclear weapons were on the table. Earlier in the week it was reported that talks had been positive and many believing the corridor would be extended.

Russia’s agriculture ministry has proposed setting the country’s grain export quota at 25.5 million tonnes for the period from mid-February until the end of June. As well as this, Russian Export Duty on wheat rises 52.3% to 2,900 rubles per tonne. The new duty on barley has risen to 52% to 2,479.9 and that on corn has fallen 22.6% to 2,410.1 rubles per tonne. The new duties are based on indicative prices of $308.3 per tonne for wheat compared to $307.7 per tonne the previous week, $279.8 for barely versus $280.9 per tonne, and $278.2 for corn, down from $317.6.

Wheat traders are continuing to monitor the increasingly talked about risks to supply from droughts in Argentina and the US wheat belts. Along with, as the cricket fans amongst us will know, the torrential rains in Australia which is currently holding the T20 World Cup. The torrential rains are not only interfering with the cricket, but are untimely ahead of harvest.

Throughout the day as Matif and London continued with the support, Chicago saw a complete turn around and, at the time of writing, the closest December contract was trading 10 cents down in comparison to the 12 cents up it was trading in the AM.

London settled up around £3.50 through the majority of the traded months. Mar 23 traded ten times to add to the already huge open interest of……1 lot. Across London wheat today the most traded month was May 23 with 774 lots trading as an outright, but interestingly it was followed closely by November 22 which is coming ever closer to the tender period. 581 lots crossed the line as an outright and a number of Against actuals/EFPs will surely see the open interest in this contract fall into hundreds, off the 1727 reported by ICE yesterday.