Wheat futures rally on counter offensive
The rebuilding of “war premium” in feed grains yesterday was sudden and swift as markets reacted to the apparent drone attack on the Kremlin in Moscow. According to the Russian Government the 2 drones were launched by Ukraine in a planned terrorist attack as an attempt to assassinate Russian President Putin. Both drones were downed by electronic warfare systems resulting in no injuries or serious damage. Ukraine has denied involvement in the incident. No word yet on how the incident may impact scheduled talks on Friday in Moscow to discuss an extension to the Black Sea Grain Initiative that’s set to expire in just over 2 weeks. Obviously today’s developments will not help an extension being reached. Expect market volatility to remain high with so much hanging in the balance. US SRW is still cheaper than Russian on a FOB (vessel freight kills SRW) basis but news Russia sold Egypt old crop wheat near 260 and new crop 255 offers resistance
Wheat markets are lower this morning after the Funds took profits on the Ukraine / Russian war news yesterday. US wheat markets closed 30 cents higher while Matif only 15 cents higher…..
Black Sea tensions remain the massive wild card ahead of proposed talks in Moscow tomorrow, and the looming extension deadline coming up in two weeks.
Beside that, the grains are in a fundamental rut with U.S. export prices generally non competitive, planting happening at a break neck pace before weekend rains and more precipitation for the Plains wheat
Algeria issued an international tender for 70k tonnes of soybean meal for shipment during June and the first half of July; they are also seeking 140k tonnes of corn from Argentina or Brazil for shipment from May through Aug.
Jordan tendered for 120k tonnes of feed barley for Oct-Nov shipment.
Tunisia has issued a tender for 100k tonnes of durum wheat and 75k tonnes of barley, all optional origin, for June-July shipment.
China sold just 16k tonnes of wheat from state reserves this morning, or just over 40% of the total offered, at 2,398 yuan per tonne ($347/MT).
Mpls wheat -6
KC wheat -9
Chic wheat -6
Matif wheat -5
Canola -2
Rapeseed +1
Soybeans -5
Soybean oil +38
Crude -12
Corn -6
CAD -2