ADMISI London Wheat Report for 7 September

The Vladimir Putin show kicked off Wednesday morning at the Russian economic forum in Vladivostok. Vlad isn’t happy with the current set up on the Ukrainian grain exports agreement and also said that all energy supplies to Europe would be halted to Europe if Brussels decides to cap the price of Russian gas. Putin said the accord was delivering grain, fertiliser and other food to the EU and Turkey rather than to poor countries who should be given priority. Vlad claimed that only 2 of the vessels have gone to ‘poor countries’ and the remainder to the wealthy nations. No surprises as we approach the rollover period for the grain deal that sabre rattling has fired up, especially as the Kremlin are starting to harden their stance on energy towards Europe, the Ace cards are starting to be played ..  but how long can these be sustained. Hints are being pushed that an easing of sanctions will ensure that all contractual volumes of gas are honoured … tell-tale signs that the winter coffers will be shrinking or a hint towards a deal? Rosneft have supposedly signed terms to slam an oil pipe line through Mongolia to China. Gazprom is planning to sell gas to China in both rubles and yuan to shift away from the euro.

Wheat took off unsurprisingly in today’s trade. Chicago Dec-22 shot up on the main open, hitting a high of 56.5C above last night’s settlement as managed money shot in to the playground. Interestingly, primary exports out of Ukrainian ports this far have been corn. Russian wheat is still the cheapest on the market and export vols are taking a while to fire up. Would it make sense for them to block the Ukrainian deal and risk hampering their own exports? Chicago Dec-22 had pulled back at time of writing and was trading 25c up on yesterday. Matif Dec-22 wheat also shot up on the news, hitting trading highs of €333/t before settling up €10 on yesterday at €328.75/t. Jordan bought 60kt of wheat, likely Russian origin. Rumours that GASC had purchased more Russian wheat yesterday as it appears to have left the public tender method for now.

USDA corn and soybean conditions remained steady while spring wheat harvest progressed at a faster than projected clip in the week to Sept 4^th. Refinitiv have left EU-27 corn production at 60.3Mmt  due to improved rainfall and better 2 week forecast upcoming. South Korea booked a cargo of 135kt of corn. Mexico purchased 257,400t of new crop corn according to the USDA. Chicago corn was trading marginally down post crop update.

Argentina farmer sales of soybeans dropped 52% in the last week of August. Brazil’s soybean exports to hit 3.9Mmt in September according to ANEC. China’s soybean imports fell 24.5% in August from a year earlier, customs data showed on Wednesday, as high global prices and weak demand curbed appetite for the oilseed. Matif rapeseed Nov-22 settled up €3.75 on yesterday at €609.25/t.