ADMISI London Wheat Report for 9 December

Wheat markets remained rather subdued in today’s trading, both in the US and Europe, unsurprising and quite normal prior to a USDA report day. Trade is waiting for an update on Australia’s harvest, with hopes that a drier spell in the coming week will avert further quality damage. FranceAgriMer lowered its forecast of French soft wheat exports outside of the EU for a second month in a row – cutting the 2021/22 season down to 9.2Mmt from 9.4Mmt estimated in November. It has also increased French soft wheat ending stocks by the end of the 2021/22 season in June next year to 3.5Mmt, up from 3.2Mm estimated last month. On the international front, Australia and the UK have joined the diplomatic boycott of the Beijing Winter Olympics, very frosty indeed. Russian wheat values continue to climb, will we hit the $90/t export tax next year? Reports appearing on Refinitive of favourable weather conditions in Russia with 2022/23 wheat production projected at 87.3Mmt. Still early days. Biden and Putin’s chat didn’t obtain anything concrete, talks are supposedly set to continue. Actual invasion theory seems unlikely by many but Ukraine are worried about a potential internal strife. Remember those little green men in Crimea in 2014? Trade doesn’t see any major threat of grain boats being taken out by the Black Sea fleet. Will be interesting to see what materialises going forward. Matif Mar-22 settled down €4.75 on yesterday at €287, settling down 10 of the last 12 sessions.

Mexico has come in hot on the US corn scene. 1,089,660t booked for this year and 754,380 for next. US biofuel mandates have been proposed by the US Environmental Protection Agency (EPA) for 2020 (at 17.13B gallons), 2021 (18.52B gallons) and 2022 (20.77B gallons). Retroactive mandates for 2020 and 2021 are below 2019 levels. But 2022 is a proposed increase from 2019. (AHDB). According to Refinitiv, the EPA have also kicked 65 smaller refiners to the curb and another $700-$800m in aid earmarked to biofuel producers impacted from Covid and demand destruction.  No doubt lawsuits will fire up soon on both sides and this will remain a key topic for the foreseeable. Matif Mar-22 corn settled €2.75 lower on yesterday at €242.50/t. Will corn prices pull down the extent of UK Feed wheat gains moving forward?

China has dabbled again in soybeans, booking 130kt on daily reporting. Malaysian palm oil futures are lower, pulling back from the rebound in values earlier in the week. Brazilian dryness is a key area of focus in the coming weeks. Matif May-22 rapeseed turned bullish, gaining €5.75 on last night to settle at €663.50/t.