Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
The bull run continues, and in dramatic fashion as markets continue full steam ahead. Grains and oilseeds were well supported in the overnight, but shot higher as the US participants entered for the main session. Corn again trading limit up, with new contract highs seen popping up across the grains and oilseed markets.
Today’s rally seems to be an extension of the concerns over the lack of rain and cold temps in key producing regions. Dry conditions in Brazil sent corn higher with that Brazilian production feared to be down as low as 92 million tonnes against the latest USDA WASDE estimate of 109 million. This sent corn up to its highest level since June 2013, and a big factor in why wheat and beans are trading on 8 year highs.
Could this sustained rally cause issues for short hedgers and force them to liquidate their positions? Quite possibly, and with the CME raising margins today this is going to require more cash to fund these positions.
In the latest JRC MARS bulletin we saw grains yields decline across the EU since March as dry and cold weather disrupted development. Average wheat yield is expected at 5.86 t/ha, down from 5.89 in March. This is still 2.9% above the average yield over the last 5 years. Rapeseed yield was lowered to 3.19t/ha from 3.26 in March.
London wheat May21 heads into first notice day tomorrow and with 200 lots traded today we are going into the tender period with at least 2,483 of open interest. We eagerly await tomorrow morning’s mid-morning tender notification.
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Contact the ADMISI Grains and Oilseeds Derivatives Brokerage team
Hanne Bell, Ryan Easterbrook & Daniel Leeson
Phone: +44 (0)20 7716 8477 or +44 (0)20 7716 8140 Email: intl.grains@admisi.com
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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.
© 2024 ADM Investor Services International Limited.
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