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 were lower last week in response to new concerns about the economic health pf the US and around the world The charts show that futures closed a gap on the charts from the beginning of the week and then closed above the gap and then worked lower from there. News that India might ban Wheat export proved to be the top of the market. The USDA crop reports on Monday showed deteriorating crop conditions for US Wheat and the Kansas Crop Tour last week confirmed the bad growing conditions and poor yield prospects. India has exempted Egypt from the ban and will honor previous commitments. It had been expected to offer up to 12 million tons to the world market. Ukraine exports were reduced due to the war and the trade is hoping for improved production in the EU to make up the difference. USDA reduced production estimates for Hard Red Winter Wheat in the US recently due to the hot and dry conditions in the western Great Plains and reduced Spring Wheat production estimates due to delayed planting.
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 on ideas that farmers are making rapid progress in getting Corn planted. The weather was variable last week with periods of rain and then warm and dry conditions and more of the same is expected this week. USDA showed much improved planting progress on Monday and significant planting progress is anticipated when USDA issues its next reports later on Monday. Many think the top end of the yield has been taken off the Corn crop due to the delayed planting. It already thinks there is reduced planted area because of the March planning intentions reports from USDA and the bad planting weather. The potential loss of Ukraine exports of Corn makes the world situation tighter. China has a Covid outbreak and has closed some cities and some ports in response.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and Soybean Meal were higher as the US cash market needs some sales from producers. Soybean Oil was lower for the week despite news that Indonesia will allow exports of Palm Oil again starting Monday but now with a reserve requirement designed to keep the domestic market well supplied. There are still fears of a cooling economy and forecasts for much improved planting weather this week. Soybean Oil remains well supported as demand is holding strong amid very tight supplies of vegetable oils here and around the world. There are still worries about Chinese demand because of Covid lockdowns there. China has been a major buyer of US Soybeans this year after a very slow start due to the problems in South America. They are buying for this year and already have booked a large amount of new crop Soybeans to cover future needs. Most of the current buying is for next year. Ideas are that the Chinese economy could slow down due to the Covid lockdowns there and cause the country to purchase less Soybeans in the world market.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was slightly higher last week. The planting pace is thought to be catching up to normal, but acreage estimates are still down for the next crop. Some traders note that it will be difficult to move Rice at current price levels and they are worried about domestic and export demand moving forward. It is hot and dry in India and it is possible that Rice production will be affected. Rice is a highly political grain for India and the government goes out of its way to subsidize the crop production and support Rice farmers. It usually allows for export prices to fall and often sells it Rice internationally at below costs of production. Prices could rally significantly in the world market if India can’t export.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was higher Friday but lower for the week as Indonesia once again imposed a domestic sales policy on the market. The government is now imposing a domestic reserve on exporters. Some analysts think Palm Oil is topping out anyway due to reduced demand ideas. Hopes for better demand from India keep the market supported. A new Covid outbreak is reported in China and cities and infrastructure has been shut down, including some airports and water ports. The economy could slow down and affect demand. Production from Malaysia is expected to increase as well as the Covid lockdowns finally go away and as the weather is good for production. Canola was lower last week, but higher on Friday along with Chicago and Malaysia. It is reported to be very dry and has been cold for planting but better planting weather is coming now. StatsCan said that Canadian farmers intend to reduce planted area for Canola this year and use the area to plant Wheat instead. There are ideas of reduced Sunflower export potential from Russia and Ukraine. The market is worried about South American production as well. Canada produced a very short crop of Canola last year so supplies are tight.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton was lower on Friday and lower after a choppy week on fears about demand. The weekly export sales report was not strong on Thursday morning. New crop months were lower as hot and dry conditions in the western Great Plains continue for now. It is also hot and dry in India and crops grown there are thought to be under stress as well. There are ideas that production potential is slipping further due to the hot and dry weather in West Texas and the rest of the western Great Plains. USDA estimated production for the coming year at 16.50 million bales and this was below trade expectations. USDA said that planted area was less than had been previously forecast due to the hot and dry weather in the western Great Plains. Chinese demand could become less due to the Covid lockdowns there be trimming imports due to Covid and has closed a number of cities as the Covid spreads through the nation. China has been buying even with the port closures and domestic difficulties caused by renewed Covid lockdowns.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was a little higher on Friday and for the week on demand concerns and trends are still mixed on the daily charts. A freeze was possible in center south parts of Brazil and Oranges production could have been affected. USDA increased its Florida and US production estimates by about 2 million boxes to 40.2 million boxes last week. USDA had been cutting production in previous estimates. The market is short Oranges and short juice production but is also worried about domestic demand destruction as pills are becoming cheaper again. The greening disease has taken its toll on the US crop and the previous Brazil crop was down significantly due to drought. The weather remains generally good for production around the world for the next crop. Brazil has some rain and conditions are rated good, but it is drier now and some tree stress could develop soon. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures.
Weekly FCOJ Futures
Coffee: New York and London closed lower on Friday but a little higher for the week and held to a sideways range on the charts. There was some early buying in response to new production estimates from Brazil. Some selling was seen on ideas that a Brazil freeze will cause a little harm to trees or fruit. CONAB estimates total Brazil production at 53.4 million bags, down from its previous estimate of 55.7 million. Arabica production was estimated at 35.7 million bags and Robusta production was estimated at 17.7 million bags. It could freeze in at least Parana and crops could be damaged as much below normal temperatures are forecast for this weekend. However, how cold and where is the question and ideas are that Coffee will escape with no damage. The Ukraine war is supporting ideas of less demand from Europe generally and Ukraine and Russia. Demand from China is thought to be less due to the war against Covid. Deliveries from Vietnam and Brazil Robusta are noted to be decreasing as the harvest is now complete, but selling was active in previous months.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed higher last week with freezing temperatures possible through this weekend in Brazil. Ideas are that prices for Sugar are relatively cheap in the world market. Sugarcane production could easily be affected in central-south areas. The price action implies renewed demand for White Sugar has appeared in the world market. Increased offers from India and Thailand are expected if the market rallies. Pakistan is also increasing its offers due to good crops there. All are primarily exporters of White Sugar while Brazil exports more Raw Sugar. Thailand expects to produce about 10 million tons of sugar this year, up 33% from last year. India said it could export more than 9.0 million tons of Sugar. Brazil mills are crushing for Ethanol at this time and not Sugar.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London moved lower again last week and chart patterns are sideways for the weekly charts. The weather is good for harvest activities in West Africa. Current reports from Ivory Coast indicate that the weather is a good mix of sun and rain so a good midcrop production is expected. The weather is good in Southeast Asia. Ghana arrivals have been below year ago levels, but Ivory Coast arrivals are ahead of last year.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322