Jack Scoville is an often quoted market analyst in the grain and soft commodities sectors. You will find his commentary throughout the Reuters, Wall Street Journal, Dow Jones, Bloomberg, and Barron's publications. Contact Mr. Scoville at (312) 264-4322
Wheat: Winter Wheat markets were higher and made new highs for the move again last week. It is a weather market right now and the planting weather is dry in many northern hemisphere areas. Western Europe is likely to get some good rains in the short term, but southern Russia could stay dry. Some showers are forecast for Ukraine this week, but the eastern sections of the country should stay dry. Kazakhstan has been dry. These areas are trying to plant the next Winter Wheat crop but the dry weather and the dry soils are keeping farmers out of the fields. Farmers are not really selling much of the current crop due to fears about production of the next crop. Less production is likely in Argentina due to drought, but the rains are coming. About quarter of Argentine growing areas are affected by the dry weather right now. Western Australia has also been very dry. The western Great Plains remains mostly hot and dry. The Midwest has had good rains.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn and Oats moved higher and Corn made new highs for the move last week. Some of the rally has been in sympathy with the rallies in Wheat, but farmers in the US are holding Corn for later sale. Producers are unhappy with the price and the Soybeans are paying much better, so farmers are selling the Soybeans and holding the Corn. Harvest reports from the country suggest that production of a good crop is likely. Demand is holding strong for exports, but domestic demand was cut back from previous estimates. The demand has come primarily from China as the state companies bought for the reserve, but that buying appears to be almost complete now. The harvest has expanded into the Midwest with very good harvest conditions. The Midwest harvest has been slow as the Corn is slow to dry down.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans closed lower and Soybean Meal closed higher for the week as strong export demand continued. The demand has been primarily from China but other countries are buying in the US as well. Reports indicated that the producer is selling Soybeans right off the combine or is delivering against previous contracts. Chinese buying for the reserve is almost finished. Ideas are that individual crushers are still with positions to buy. The trade generally expects China to shift its buying back to Brazil in the near future, but Brazil has been hot and dry and parts of Argentina have also been dry and some of the early planting has been delayed. That might keep the Chinese buying in the US for a little longer. Brazil is starting to get rains, so all of the projected Soybeans area will get planted and a big crop from Brazil is still expected.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was higher last week in choppy trading. A poor weekly export sales report hurt prices on Friday. Export demand had been very strong until now. Reports indicate that domestic demand has been poor to average. The harvest has been active in northern states with good field yields reported. Southern Louisiana and Texas are done with the first crop harvest and are waiting for the second crop to mature. Producers had to endure Hurricane Delta in Louisiana, but the Ricer apparently made it through with only minimal losses if any losses were seen at all. Quality is said to be very good, especially in Arkansas.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil closed lower on ideas of decreasing production and private reports of weaker demand. It is seasonally a time for trees to produce more due to more regular rains. Getting workers to do the harvest remains hard and the lack of labor has been a big problem. At least some of the plantation owners have asked for more migrant workers to cover the lack of workers that can be sourced locally. Soybean Oil and Canola were lower. Canola farmers are selling due to harvest pressure, but industry and speculators are buying. The Canadian Dollar is higher but Canola is still considered relatively cheap in the world market.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton closed higher for the week and trends are up on the weekly charts. Hurricane Delta moved through the Delta and Southeast and did some damage to Cotton. Open bolls were reported in both regions and Cotton fiber was discolored or else blown out of the bolls due to the rain and winds. The discolored Cotton is getting a chance to recover now as it has turned dry and the fiber can be naturally bleached by the Sun. The weekly export sales report showed just moderate demand last week. There was no major Chinese demand. Demand should stay weak as long as the Coronavirus is around. Shopping is hard to do and many people are still unemployed. This is true in just about all countries.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was near unchanged in choppy trading last week. Florida has been spared any hurricanes or other serious storms this year in a year that has been very active for tropical storms with a record amount of tropical storms hitting the US. The Coronavirus is still promoting consumption of FCOJ at home. Restaurant and food service demand has been much less as no one is really dining out. Florida production prospects for the new crop were hurt by an extended flowering period, but the weather is good now with frequent showers to promote good tree health and fruit formation. Brazil has been too dry and irrigation is being used. Showers are falling in Brazil now. Mexican crop conditions are called good to very good with ample rains.
Weekly FCOJ Futures
Coffee: Futures were lower last week in New York and higher in London. London had been better supported due to stronger demand ideas and worries about the weather in Vietnam and the country is getting too much rain now and flooding is being reported in the Central Highlands. The demand from coffee shops and other food service operations is still at very low levels as consumers are still drinking Coffee at home. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. The Brazil harvest is over and producers are selling due to the recent extreme weakness in the Real. Ideas are that production is very strong this year as it is the on year for the trees. Central America is also offering right now and offers are increasing. The weather is good in Colombia and Peru.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London were lower. Brazil mills have been producing more Sugar and less Ethanol due to weak world and domestic petroleum prices. About 45% of the crush this year will go to Sugar, from 35% last year. It has been dry lately to affect Sugarcane production and producers are less aggressive sellers. India has a very big crop of Sugarcane this year but the Coronavirus has made exports hard. The Indian government has not yet announced the subsidy for exporters of Sugar so no one knows how much to charge yet. Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season. Rains are moving through the country now from Vietnam and the Pacific. The EU is having problems with its Sugarbeets crop due to weather and disease. Demand appears to be about average.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London were lower. Trends are turning down in both markets. The harvest for the next main crop is spreading through much of West Africa and very strong production is expected. Some concern is noted in Nigeria as rains keep falling and make it hard to sun dry the beans. Drier weather is currently in the forecast so conditions should improve. There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US. Europe is also seeing a return of the pandemic. The North American cocoa grind was 4% lower than a year ago and the Asian cocoa grind was down 10% from last year Ivory Coast is in the middle of the presidential campaign season and some violence s expected.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322