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: Wheat closed a little lower yesterday last week on swelling tied in part to a stronger US Dollar and in part in anticipation of a potentially bearish USDA report on Tuesday. Futures made new highs for the move before working lower. Trends are still up in all three markets. The weekly export sales report was a little stronger last week and near the high end of trade expectations. Ideas that the US will have good demand for Wheat as the rest of the northern hemisphere is short production this year. Offer volumes are down from both Russia and Europe. Dry weather in southern Russia as well as the northern US Great Plains and Canadian Prairies remains a supportive feature in the market although the weather has become old news. The Russian weather has been good for production in northern and western areas and has recently improved in southern areas and into Kazakhstan in time for the next crop. Siberian Spring Wheat conditions have been very good. Europe is expecting top yields in some areas but less yield in others and parts of eastern Europe and northern Russia are expecting strong yields. European quality is a problem due to too much rain in some areas and not enough in others.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn closed lower and Oats both closed higher. It was a correction trade for the Corn. The export sales report was strong last week and the sales pace is currently at or just above the USDA target pace. Corn has relatively tight supplies as farmers are harvesting and not selling. Oats were higher on a lack of supply available to the market from the northern US Great Plains and the Canadian Prairies while Corn is still finding some support from strong ethanol demand. Trends are up on the daily charts for Oats and weekly charts for both markets. Near term trends are down for Corn. Demand will be an increasing feature in the trade moving forward as the harvest moves to completion sometime this month. Initial yield reports have been mixed but good. Most of the elevators along the Mississippi are exporting again which is good news for nearby demand. There are a lot of ideas that production and planted and harvested area will be significantly less next year due to the lack of fertilizers available and the cost of production.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and the products closed lower last week on what appeared to be widespread speculative selling as wire reports indicated that the Brazil Soybean basis was now showing overall prices less than US values to places like China. Soybeans trends are starting to turn down on the daily charts. Harvest has moved well past the half way point for Soybeans and a harvest low might be seen during the second half of the harvest. Reports indicate that farmers are limited sellers at best. Gulf port elevators are coming on line and export sales and exports are increasing. Planting and initial crop development is going very well in Brazil. It has been dry in Argentina but rain has been falling this week and conditions for planting and initial growth are improving.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was higher on Friday in recovery trading as the recent demand woes are considered to be factored into the price for now. Futures closed slightly higher for the week and short term trends have turned mixed on the charts. Weekly chart trends are sideways but imply futures could test resistance at the 1400 area basis the nearest futures contract in the near term. There was little in the way of news for participants to react to but the weekly export sales report showed weaker demand. Ideas are that demand is not yet strong enough to take up the supply available to the market. The crop has been largely harvested in all states. Yield reports and quality reports have been acceptable to many in Texas and are called good in Louisiana. The reports have been good in both Arkansas and Mississippi. Milling yields have been generally low in both states.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was lower last week as Soybean Oil moved lower and caused demand concerns for Palm Oil. Futures are still caught in a trading range. Support still comes from ideas that supply and demand are in balance or supplies are short. The weekly chart trends are up. There are ideas of tight supplies due to labor problems. There are just not enough workers in the fields due to Coronavirus restrictions. Production has also been down to more than offset the export losses so prices have trended higher. Canola closed lower and could have topped out for now as the harvest is starting to wind down. Some of the selling was noted in sympathy with Chicago. Farmers are bullish and reluctant to sell because of the sharp reduction in Canola production in Canada this year. The weekly chart trends are up.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Futures were a little higher last week but closed well off the highs and close to the lows of the week as the market apparently bought some Cotton. The increased available supply has yet to reach to certified stocks. The export sales report was not strong last week and the market could be concerned about demand moving forward. WASDE releases its monthly updates next week and USDA will also release new production estimates. Trends are still up on the carts and the fundamentals have not really changed. Demand for US Cotton remains very strong and that is good news for sellers as the strong demand implies strong prices should continue. Analysts say the Asian demand is still very strong and likely to hold at high levels for the future. Good US production is expected. Chinese demand is also strong as clothes makers use foreign Cotton to get away from domestic supplies that might have been produced by forced labor and might not be allowed in the US or other western countries
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was lower last week and chart trends are starting to turn down. Reports indicate that the selling came from speculators. The hurricane season is just about over and the chances for a damaging storm to hit the state of Florida are almost nothing. The weather remains generally good for production around the world. Brazil has some rain is in the forecast and flowering will be possible in the next couple of weeks. Weather conditions in Florida are rated mostly good for the crops with a couple of showers and near normal temperatures. Mexican crop conditions in central and southern areas are called good with rains. Northern and western Mexico is rated in good condition.
Weekly FCOJ Futures
Coffee: New York and London closed lower last week in chart related trading as futures could not hold new highs for the move. The fundamentals are still considered bullish. The lack of Coffee available to deliver against Robusta contracts remains a factor. Containers are not available in Vietnam to ship the Coffee. Covid has also returned to Vietnam in a big way and could be a factor in interrupting shipments. Roasters are turning to exchange stocks and are buying futures contracts to get in line for deliveries. Brazil also has less Coffee this year due to a freeze earlier in the year and dry weather at flowering time a year ago. Scattered showers are still in the forecast for Brazil and flowering is reported now in many growing areas. Scattered showers are now in the forecast for Southeast Asia and for Vietnam. Good conditions are reported in northern South America with near average rains and good conditions reported in Central America with near average rains. Conditions are reported to be generally good in parts of Africa. Chart trends are mixed on the daily charts but are up on the weekly charts in London.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York closed higher and near the highs of the week and as crude oil futures were firm and as supplies of Sugar remain a problem. Ethanol demand for the US was strong. London closed a little lower for the week. Weekly and daily charts show mixed trends. Ideas are that the supplies are out there but it will take a stronger price to get them into the market. Processors in Brazil are refining the cane for Ethanol more than Sugar right now and this trend is expected to continue due to the relative price spreads. The reduced production potential from Brazil for the current harvest is still impacting the market. India is not offering as world prices are well below domestic prices and has had some weather problems of its own. Consumption of Sugar is said to be improving from previous low levels but still remains rather low. Thailand is expecting improved production. It is raining in southern Brazil which will be good for the next crops there.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed lower last week as ideas of increasing supplies are still around. Trends are down in both markets. Ideas are that demand will only improve slightly and production in West Africa appears to be good this year. Both Ivory Coast and Ghana are reporting improved weather as it is now mostly sunny with some scattered showers around. Ivory Coast exports were 3.4% higher for beans and about 2% higher for powder, butter, and chocolate in 2020-21. World economies are starting to reopen after Covid and the open economies are giving demand the boost but the boost has not been as strong as hoped for earlier.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322