Wheat markets closed lower but, as some indication the shorts have got out, Chicago spent some of the session locked limit down. Given the premium the May Chicago wheat held above the international market, even accounting for the war premium it would make sense that every single grain that could work into the delivery system would find its way to the futures market.
- Chicago wheat May contract down US7.5cents per bushel to 1286.5c/bu;
- Kansas wheat May contract down 52c/bu to 1199.5c/bu;
- Minneapolis wheat May down 53.5c/bu to 1144c/bu;
- MATIF wheat May contract down €26.50/t to €370/t;
- Black Sea wheat July contract down $1.50/t to $342.50/t
- Corn May contract up 2.25c/bu to 753c/bu;
- Soybeans May contract up 30.25c/bu to 1689.75c/bu;
- Soybean oil up 2pc;
- Soybean meal up 3pc;
- Winnipeg canola November 2022 contract up C$7.70 /t to $910.30/t;
- MATIF rapeseed November 2022 contract up €12.75/t to €730.25/t;
- ASX July 2022 wheat contract down A$5/t to $411.50/t;
- ASX Jan 2023 wheat contract down $5/t to $415/t;
- AUD dollar weaker at US$0.726;
- Brent crude oil futures up 2pc.
May wheat futures recovered to finish only moderately lower. It’s a wild ride – and it’s not over, by any stretch. Don’t be sucked in to using Chicago Board of Trade wheat as the barometer for military activity or political negotiations. SRW is a law unto itself – in part due to the restrictions imposed by the exchange. For days, the shorts couldn’t get out. Limiting the exit of a portion of the market that is increasingly out of the money will leave some scratching their heads.
Overnight the EU said it would slash the import of Russian natural gas by two-thirds over the course of this year. The UK indicated it would phase out Russian oil imports by the end of 2022 and is seeking replacements for natural gas. The US put a ban on Russian oil, natural gas and coal. Russian Deputy Prime Minister Alexander Novak indicated Russia could retaliate by turning off Nord Stream 1, which supplies natural gas to Europe.
USDA’s WASDE report is due out overnight. South American production probably needs to be revisited, and is still a market mover. With 81pc of the safrinha corn crop planted, 27pc ahead of the same time last year, weather forecasts are still vitally important.
Firmness in local markets continued yesterday, as wheat gained another $5-6/t, and barley rose $5-10 along the east coast and in South Australia. Western Australian free-in-store barley was relatively unchanged, and canola bids bounced back up to $945/t east coast track.
Viterra released its latest monthly receival report, with SA’s big bulk handler stating a further 37,500t in total of wheat, barley and pulses had been delivered.
Source: Lachstock Consulting