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 higher on Friday on the big wind storm that moved through the Great Plains. No damage reports have been heard yet but the wind blew at hurricane force levels and a lot of the soil was blown around and probably shredded the Wheat. The losses could become significant. Futures were mixed for the week, with HRW closing higher and the other markets closing lower. The big loser for the week was the Minneapolis market. Trends are still sideways in all three markets on the daily charts. Ideas have been that the US will have good demand for Wheat as the rest of the northern hemisphere is short production this year but so far demand has been average against previous years. Offer volumes are down in Europe although there has been talk of increased offers from Russia. Dry weather in southern Russia as well as the US Great Plains and Canadian Prairies caused a lot less production although Russian production was rated as stronger in the most recent USDA WASDE report. The lack of production has reduced the offers and Russia plans to announce sales quotas for next year very soon. Russia has already increased export taxes to control the flow of export Wheat out of the country and announced last week that a quota of 8 million tons per month would be put on Wheat exports for the foreseeable future. Australia has had too much rain and the crop quality should be diminished, but conditions are drier now and the harvest is moving ahead. These international moves should increase demand for US Wheat but this has not really happened yet.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn closed higher on Friday and for the week on a very strong weekly export sales report and as US interior cash markets are holding strong. The weekly export sales report was the strongest of the year. The weekly charts still suggest higher prices are coming longer term and the fundamentals do as well. Corn has relatively tight supplies as farmers are mostly done harvesting and not selling. Demand has been strong for exports and very strong for Ethanol consumption. Demand will be an increasing feature in the trade moving forward and the strong weekly export sales report was important for the market moving forward. Demand has been good so far this season but a lot of the Chinese business has gone to Ukraine this Fall. That is expected to change over the Winter as Ukraine exportable supplies start to run low. It could change further is Russia invades Ukraine in the future. Interior basis levels are reported to be strong due to strong 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 Soybean Meal closed higher on Friday and for the week and the trends are turning up on the daily charts. The weekly Soybeans charts suggest higher prices are coming, but the weekly Soybean Meal charts show that this market broke out and then fell back into support areas. Soybean Oil was higher and trends are sideways on both the daily and weekly charts. Reports indicate that farmers are limited sellers at best. Planting and initial crop development is going very well in Brazil but it has turned dry in southern Brazil and Argentina. Rains were reported in Argentina and southern Brazil this week so any weather related concerns have been put aside for now. Even so, it is a La Nina year and that implies drier than normal weather in southern Brazil and Argentina. Reports indicate that some Corn has been lost and ideas are that Soybeans could become stressed if the dry weather returns. Brazil could have soybeans ready for export by the end of February and the crop potential is up to 150 million tons.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was a little lower on Friday and a little lower for the week what appeared to be speculative trading. Futures have now moved lower for the last several weeks after making new highs for the move. Futures and cash market trading have gone quiet for the holidays. Many producers are done harvesting and are hunting and not interested in selling at a time that is traditionally the cheapest prices of the year. Mills have already purchased what they need for the holidays as will not show much interest in the market until the first part of the middle of next month. The cash market is reported to be relatively strong as prices have held firm despite the quiet activity.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was lower last week on worries about demand. Traders are mostly worried about India who has been buying Soybean Oil in the US instead of Palm Oil from Malaysia and Indonesia and is also worried about China and its demand for Palm Oil for bio fuels. Improved export demand is reported but still faces headwinds due to the world wide Covid outbreak. Futures held support at about 4750 on the weekly charts and bounced. Reports of new lockdowns in Europe and a new variant of the Coronavirus discovered in Africa hurt demand ideas on Friday and caused speculative selling to reduce risk. Support still comes from ideas that supply and demand are in balance or supplies are short. 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 was higher on price action in Chicago Soybean Oil. Farmers are bullish and reluctant to sell because of the sharp reduction in Canola production in Canada this year.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton futures closed sharply lower on Friday but higher for the weekday on mostly stronger financial and Crude Oil markets. Support is at about 10360 on the weekly charts. Ideas are that demand is strong for US Cotton right now. The weekly export sales report was strong again, but less than last week. The new Covid variant is expected to spread quickly but produce mild reactions but the demand concerns are there as China might buy less now. Chart patterns are now up after the limit up day yesterday. Analysts say the Asian demand is still very strong and likely hold at high levels for the future. US consumer demand has been very strong as well despite higher prices and inflation. Good US production is expected for next year as planted area is expected to increase due to high Cotton prices and the expense of planting Corn.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was higher last week and trends are up on the weekly charts. The weather remains generally good for production around the world. Brazil has some rain and conditions are rated very good. Brazil production was down last year due to dry conditions at flowering time and then a freeze just before harvest. Weather conditions in Florida are rated mostly good for the crops with a couple of showers and warm temperatures. Mexican crop conditions in central and southern areas are called good with rains. Northern and western Mexico is rated in good condition. The Florida Citrus Movement and Pack report showed that inventories are still almost 16% below last year for this week.
Weekly FCOJ Futures
Coffee: New York was a little higher and London closed higher last week as damaging weather for Brazil Arabica areas and as the logistical and production problems in Brazil and Vietnam are an increasing part of the price structure. The dry weather and then the freeze in Brazil have created a lot of problems for the trees to form cherries this year. The lack of Coffee available to deliver against contracts remains a factor and the cheapest Coffee for buyers is often at the exchanges. Containers are not available in Vietnam or in Brazil to ship the Coffee. Cherry pickers are hard to find in Vietnam due to Covid problems. The crop there could be damaged if a storm hits the Coffee while it is drying on the patios this week as forecast. The rest os Southeast Asia should get scattered showers and good conditions. Brazil also has limited amounts of Coffee available after bad weather at flowering time and then a freeze before the harvest got underway. Production conditions for the next crop in Colombia are not real good.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed lower on Friday despite reports of reduced production from Brazil. The weekly chart trends are sideways but down trends are showing on the daily charts. Weaker production ideas in Brazil were seen again last week as UNICA released its second half of November data. Weaker demand ideas were still being caused by reports of new lockdowns in Europe as the Covid returns there and reports of a new variant discovered in Africa. However, the effects of the new variant are reported to be mild so the fears were less. The daily charts show that trends are sideways. Reports indicate that consumer demand has returned to the market. Ideas are that the supplies are out there but it will take a stronger price to get them into the market. Ideas are that Indian producers and exporters are willing sellers above 20.50 cents. 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 as cane production suffered last season. Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York was lower and London closed higher on Friday on currency considerations. Both markets were higher for the week with London leading the way. Ideas are that demand will only improve slightly if at all 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. Some farmers want more rain for the best Spring harvest results.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322