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 was higher on stronger European futures and ideas of increasing demand potential as world prices rallied on short supplies, especially in Russia. The weekly export sales was poor but did not matter much to the traders. The demand has not been seen here, so the Winter Wheat markets have not been able to do more than hold in a range. 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 US and Canada are seeing some showers this week. Crop size estimates in Russia have been reduced and domestic Russian prices are above world prices. The Russian weather has been good for production in northern and western areas but is still trending dry in southern areas and into Kazakhstan. Some showers are no in the forecast for the drier areas but are not expected to help much. The weather in China and Europe is wet and there is potential for reduced quality in Europe. 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.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn was higher on speculative buying and returned to the middle of the recent trading range on the weekly charts. The weather remains a feature of the trade but is less important now as pollination is done and the Corn is filling kernels and starting to mature. Some forecasts call for improved weather, especially in the northern and western belt. The eastern and southern belt should stay warm and dry. The growing conditions in the US are highly variable and not likely to produce trend line or record yields. It is still too dry in many areas of the west and drier weather is expected in the east. Some showers are in the forecast for the west but it is still hot. Ideas are that Brazil Corn production could be less than 85 million tons so reduced production estimates are expected in coming reports. Oats were higher last week as the weather remains bad for production even with the crop near or in harvest. The uncertain weather in the northern Great Plains and Canadian Prairies remains the best support for the market. Canadian Oats areas and those in the northern Great Plains remain too hot and dry. Some rain is now around but is too little and too late to materially help crops.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and Soybean Oil were higher last week and Soybean Meal was about unchanged. Funds were the most active traders in all three markets. The market got sold out at lower prices earlier in the week and moved sharply higher at the middle of the week, then held. China bought more shipments of Soybeans last week but demand is still weaker than expected overall. Demand threats mostly surfaced late in the week and were caused by reports that the EPA was about to submit to the White House new bio fuels blending requirements that could call for less bio fuels demand. Crude Oil was up last week, so Soybean Oil was able to rally again. US weather is still a feature in the market as it remains hot in the west and is dry in just about all areas now. Western and northern areas could get some showers this week, but eastern and southern areas look to stay drier. And will feature warm temperatures as well, although cooler as the week moves on. Soybeans conditions in central production area started the year too wet and have suffered some production losses
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice closed a little lower last week after trading both sides of unchanged. Spreads between September and November were the most active trade. Harvesting continues in Louisiana and Texas. A delayed harvest is expected in Mississippi and Arkansas. The harvest is now expanding through southern growing areas. Initial yield reports and quality reports have been acceptable to many in Texas and are called good in Louisiana. Smut has been reported in Texas but the smut is coming off the grain in the cleaning process. The smut problem appears to be worse around Houston. The harvest pace is expected to be slow due to ongoing showers in both regions and farther into the north. Ideas of average yields are also heard in Arkansas and Mississippi. Growing conditions have been mixed at best with many areas getting too much rain. Chart trends are sideways.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil closed higher last week on supply concerns. Exports so far this month have not been strong. Futures are still a trading range market on 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 higher as production expectations remain low. Damaging weather continues in the Canadian Prairies and northern Great Plains. Production ideas are down due to the extreme weather seen in these areas. It remains generally dry and warm in the Prairies although southern areas have been getting some very needed precipitation. The Prairies crops are in big trouble now due to previous hot and dry weather and the rains are coming too late.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Futures were higher last week as a tropical system formed in the Gulf of Mexico and could hurt Cotton production in the Southeast and Delta this week. Positive news was seen on Friday when Cotlook estimated the world production estimate at 286,000 tons, from 241,000 tons in July. The change came in response to less production in India due to monsoon problems and a slight increase in demand. Showers are falling in Texas and in the Delta right now and big rains are reported in the southern Delta. The Southeast is also getting scattered showers with big rains along the Coastal areas of the south. Bolls are opening and fiber could be damaged. Big winds could blow bolls off of the plants. The demand is expected to be strong from Asian countries as world economies recover from Covid lockdowns. Analysts say the demand is still very strong and likely to hold at high levels for the future. However, the expansion of the Delta variant has given pause to the better demand ideas due to fears of economies here and around the world starting to partially lock down again. Production ideas are being impacted in just about all areas due to the weather extremes. It has been very hot in parts of Texas and the Delta and Southeast have had drenching rains at various times in the last couple of months.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ closed higher last week as a ewe tropical storm has formed and appears headed for the Gulf of Mexico. The storm missed most if not all of Florida but some buying was appearing just in case. Two more tropical systems are forming in the Atlantic now. Temperatures are now at or above seasonal averages in Brazil after a freeze a few weeks ago. Weather conditions in Florida are rated mostly good for the crops. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. Northeastern Mexico areas are too dry, but the rest of northern and western Mexico are rated in good condition.
Weekly FCOJ Futures
Coffee: New York and London closed higher last week and chart patterns remain mostly up. London was the stronger market again. London is having trouble sourcing Coffee from Vietnam due to a shortage of containers to carry the Coffee out of the country. Prices in New York have stayed firm as the current Brazil harvest starts to wind down with smaller production. Brazil forecasts call for above normal temperatures for at least the next week, but the damage from the freeze a couple of weeks ago is easy to see. The dry weather is helping to keep the flowers from appearing. It is flowering time for the next crop. Some trees were killed and will have to be replaced. The current outlook calls for 10 days of dry weather which will not support the flowering but will keep the harvest active. Improved showers are now in the forecast for Southeast Asia. Good conditions are reported in northern South America and good conditions reported in Central America. Colombia is having trouble exporting Coffee due to protests inside the country. Conditions are reported to be generally good in parts of Africa, but Ivory Coast and Ghana have been a little dry.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London were higher last week as the reduced production potential from Brazil is still impacting the market. Demand for Sugar has been weaker. Ideas are that the Brazil freeze hit one million hectares of Sugar area and that the world will have a deficit production for the coming year. Consumption of Sugar remains on the light side. Fears that the Covid is returning and could reduce economic activity and demand held sway. The market is still working through a short supply. The freeze and drought damage is there in Brazil as industry sources have said to expect a short season for processing. There is little White Sugar left in India for the export market but monsoon rains are promoting good conditions for the next crop. Thailand is expecting improved production. Ethanol demand is returning to the market as more world economies open up after the pandemic, but renewed Ethanol demand is now in doubt with weaker Crude Oil futures and covid pandemic fears as the Delta variant spreads.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed a little higher last week. Buying came from speculators. Ivory Coast has stopped selling for the next crop on fears of less supplies. The grind data was released recently and showed a strong recovery from the Covid times. World economies are starting to reopen after Covid and the open economies are giving demand the boost. The weather has had below normal rains in West Africa and crop conditions are rated good for now but there is concern about the lack of rain. Some are forecasting less production in the coming year.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322