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 markets closed lower last week as demand remains disappointing. Ideas had 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 or less against previous years. Futures have been moving lower since late November because of the poor export demand and might find a bottom soon. Offer volumes are down in Europe. Dry weather in southern Russia as well as the US Great Plains and Canadian Prairies caused a lot less production. The lack of production has reduced the offers and Russia has announced sales quotas for next year. Russia has already increased export taxes to control the flow of export Wheat out of the country and announced a few weeks ago 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.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn closed slightly higher on Friday and the short term trends are sideways but are turning up to go along with the longer term trends in the market. Support came from ideas that the overall fundamental picture for Corn is bullish as dry conditions continue in South America have been affecting summer Corn and Soybeans production. However, showers are now predicted for southern Brazil and the situation there should become more stable. Some showers were reported in central Argentina but northern Argentina remains hot and dry. Most of Argentina will stay hot and dry while Brazil gets its showers. It is also hot and dry in Paraguay and into parts of southern Brazil. Corn has relatively tight supplies as farmers are mostly done harvesting and not selling, but ideas are that farmers are delivering enough to keep the market satisfied. Interior basis levels are reported to be strong. 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 but so far new crop futures have not been strong.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and the products closed sharply higher on Friday and higher for the week as the South American weather situation remains a mixed bag The rains over the week mostly fell in central Argentina and then in Parana with RGDS farther south and also Paraguay and northern Argentina still mostly dry. Showers are now in the forecast for southern Brazil. The rains are timely and will help crops in these areas. The dry weather in southern Brazil and in Paraguay and Argentina had been helping to feed the rally and the forecasts took prices lower at times last week. Planting and initial crop development is going very well in central and northern Brazil but it might be too wet for Soybeans in at least some of these areas as Soybeans do not like very wet soils. Reports indicate that some Corn has been lost and ideas are that Soybeans could become stressed if the dry weather continues in southern Brazil and northern Argentina. Brazil could have soybeans ready for export by the end of February and the crop potential is up to 150 million tons although many are now starting to drop production outlooks due to the hot and dry weather. Ideas are now that Brazil can produce between 130 and 145 million tons of Soybeans this year due to the losses in the south.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was a little higher on Friday in consolidation trading. Trends are starting to turn up again on the daily charts. Futures and cash market trading have been quiet until now and the cash market is still quiet. Many producers are done harvesting and are hunting and not interested in selling. Mills have already purchased what they need for the holidays as will not show much interest in the market until the first part or 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 higher last week as rains hit Malaysia over the weekend and caused floods and renewed production concerns. Traders are mostly worried about demand from 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. Canola was a little higher in range trading and with the Chicago price action. Farmers are bullish and reluctant to sell because of the sharp reduction in Canola production in Canada this year. The buy side thinks that Canola is fully priced but the farmers are still holding out for more.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton futures closed higher last week and the market has developed into a short term trading range after trading higher to start the week. It’s been a demand market and prices have been sideways waiting for demand to catch up to the price. Ideas are that demand remains strong for US Cotton even with the weaker export sales reports over the last couple of weeks. 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 a little lower last week but trends are still mostly up on the daily and weekly charts. The freeze season is coming to Florida but 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 Movement and Pack report showed that inventories of FCOJ are now 21.1% less than last year.
Weekly FCOJ Futures
Coffee: New York and London closed higher last week as the logistical and production problems in Brazil and Vietnam are still around. The dry weather and then the freeze in Brazil have created a lot of problems for the trees to form cherries this year. 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. Vietnam is getting scattered showers on the coast but dry conditions inland. The rest of Southeast Asia should get scattered showers in the islands and mostly dry conditions on the mainland. 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 were a little lower last week on reports of improved growing conditions for the crops in central-south areas of Brazil. Sugar crops in these areas got a lot of help from the recent rains but many of these areas are drier again. More showers are in the forecast for central south areas and crops should benefit from the return of moisture to the region. Weaker demand ideas were still being caused by reports of renewed lockdowns in Europe due to Covid. Some stores and restaurants are closing in the US. However, the effects of the new variant are reported to be mild so the fears were less. Ideas are that the supplies are available from India and Thailand but it will take a stronger price to get them into the market.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London a little higher as the weather is generally good for West Africa and Southeast Asia. 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. Trends are starting to turn up in these markets.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
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