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 on what appeared to be follow through fund selling tied to news that Turkey, Russia, and Ukraine are closer to agreement to allow exports from Ukraine via the Black Sea. Winter Wheat markets traded to new lows for the move on Friday but Minneapolis held to its range even though it was not a strong market. USDA increased production and ending stocks in its latest reports released Tuesday. Trends are down on the daily charts for the Winter Wheat markets but mixed in Minneapolis. Demand remains poor for US Wheat despite very strong sales last week. The export sales report last week showed the strongest volume of sales in years. The Winter Wheat harvest is expanding through the Great Plains and Midwest. Yield reports have been variable in Kansas. Hot and dry weather is back for this week to southern areas while northern areas have more moderate temperatures and some rains. Northern Plains and Canadian Prairies weather has been improved but is still variable. Europe is too hot and dry and India and Pakistan are both past major heat waves and dry conditions as the monsoon hits both countries.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn closed sharply lower last week on fund selling tied to worries about the world economic health and Corn demand moving forward and on ideas of improving crop conditions for the Midwest. Corn is a weather market again as hot and dry forecasts are around. Selling came from a sharply higher US Dollar that can curb export demand. Crude Oil was lower and ethanol demand could get hurt soon. The WASDE reports from Tuesday showed increased ending stocks for the current year and the coming crop year. USDA lowered demand for this year and left demand unchanged for the coming year and production unchanged for the current year and changed production for the coming year in line with the acreage changes from the June 30 reports. Yield estimates for the coming year were left unchanged.. Traders have heard about hot and dry forecasts for the western Midwest and Great Plains in recent days, but many Midwest areas got rain in the last week or two and the Corn in these areas should be able to withstand some heat and dry weather. The hot and dry forecasts are coming just when pollination is expected so yields could be cut anyway. Basis levels in the Midwest are strong amid light farm selling and good demand.. Corn has emerged under what is considered good conditions but it has been hot in the Midwest and many areas have been dry. The forecast for more dire weather is concerning in these areas most of all. Illinois and Iowa are in the best shape to withstand the hot and dry weather should it develop.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and the Soybean Oil were lower for the week as the US Dollar was sharply higher. Soybeans moved sharply lower in the first part of the week and then traded sideways. Soybean Meal rallied and made new highs for the move before failing on Friday. The WASDE reports released Tuesday showed increased ending stocks for the current year and the coming crop year. USDA lowered demand for this year and left demand unchanged for the coming year and production unchanged for the current year and changed production for the coming year in line with the acreage changes from the June 30 reports. Yield estimates for the coming year were left unchanged. Traders heard about hot and dry forecasts for the western Midwest and Great Plains recently but many Midwest areas got rain in the last week or two and the Soybeans in these areas should be able to withstand some heat and dry weather. The hot and dry forecasts are coming just when pod set is expected to start so yields could be cut anyway.. Basis levels are still strong in the Midwest. The US cash market is still running low on Soybeans but there are still renewed Chinese lockdowns and China has been importing less as a result. There is less Chinese demand for Soy products due to the lockdowns there and China is starting to renew the lockdowns now as Covid cases have risen in number. Ideas are that purchased could increase as the lockdowns and port closures are finally eased by the government 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 have been buying for this year and already have booked a large amount of new crop Soybeans to cover future needs.
Weekly Chicago Soybeans Futures:
Weekly Chicago Soybean Meal Futures
Rice: Rice was a little higher last week and challenged nearest resistance areas on Friday. USDA made only slight modifications in its supply and demand tables so the reports were not a major event for this market. Demand was cut for all grades of Rice but this had been expected as demand has been less than hoped for this year and the higher US Dollar now should keep bad demand ideas around. Crop conditions are mostly good to excellent for now in Arkansas but the weather could turn hot and dry and hat could hurt overall production potential. Mississippi and Louisiana are called in good condition. Texas Rice is developing in what are called stressful conditions. Water availability from the lakes will be very limited this year and maybe next year. The speculators have been the best sellers lately even with perceived bullish fundamental news as many are worried about a world wide recession.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil closed lower last week on weaker crude oil markets and on expectations of building supplies inside of Malaysia and Indonesia. Refiners in Malaysia have pledged to lower the price of cooking oil for internal consumption in an effort to help control inflation. Indonesia is offering incentives to move the product into domestic and export channels. Export reports from the private sources are showing the weaker demand this month and this has been the trend for the last few months. 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 held better than the other vegetable oils markets. Ideas of poor demand have hit this market as well as the others and for the same reasons as funds were the best sellers in this market. The crops are going in the ground and the growing conditions are much improved. 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 sharply higher to limit up Friday but still lower for the week on fund selling tied to recession fears here and around the globe as well as news from Bloomberg that Chinese Cotton imports will be less this year due to the Covid lockdowns seen there. Cotton prices fell to new lows for the move last week. The Chinese had been reopening the economy and country lately as Covid faded, but some reports of a new variant found there could shut the country down again in the near term. Current weather forecasts call for hot and dry conditions for much of the Great Plains including west Texas Cotton area. There have been showers in the region lately to improve conditions and that kept the market pinned lower. There continues to be talk of a big recession here in the US and around the world. Traders worry that the continued Chinese lockdowns will hurt demand for imported Cotton for that country and that a weaker economy in the west will hurt demand from the rest of the world. There are forecasts for hot and dry weather this week in West Texas and the rest of the Great Plains. The Indian weather is cooler and wetter and conditions appear good. 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. The cities and ports are shut down again. USDA cut the harvested area but slightly increased yields in the latest WASDE reports. Export demand was also cut but so were ending stocks due to the larger cut in production. The average farm price was unchanged. World data showed increased ending stocks levels so consumption world wide could become a problem.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was lower last week and made new lows for the move on light volume fund selling tied to fears of a global recession and as USDA increased production potential. Production was estimated at 41 million boxes for Florida, up just 1% from the previous estimate but enough to keep selling interest alive. US production was down about 2% at 3.81 million tons, but the industry pays attention to the Florida estimate as that state produces almost all of the juice oranges feeding the processing industry. Production is still down from previous years gut has been creeping higher in recent USDA reports. Trends are mixed on the daily and weekly charts. The recent market weakness has been dramatic since the market made new contract highs earlier this month. The weather remains generally good for production around the world for the next crop. Brazil has some rain and conditions are rated good. 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 sharply lower last week and made new lows for the move on fund selling tied mostly to a very strong US Dollar. Trends are still down on the daily and weekly charts in New York in London. Futures remain rather cheap when compared to the cash market and certified stocks keep dropping. Demand for Coffee overall is thought to be less as the world economic situation changes for the worse but the strong cash market means that even less Coffee is on offer. There is less Coffee on offer from origin, with Brazil offering less and Central America and Vietnam offering less as well. The weather in Brazil is good for Coffee production and any harvest activities. Temperatures are above normal in Brazil and conditions are mostly dry.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed higher Friday and last week as the market looks for increased supplies from origin. Trends are still sideways to up in New York and in London. White Sugar supplies and production are short right now. India is reported to have a big crop of Sugarcane coming and as Brazil is harvesting its crop of Sugarcane and turning much of it into Ethanol but is still making some Sugar and some of that Sugar is making it into export channels. UNICA data released last week showed that the Sugar mix had increased and Ethanol as a percentage of the crush had dropped. Thailand is still offering and exporting. Reports from India indicated that conditions are generally good for Sugar production. Monsoon rains have been good in India this year.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York rebounded from lower levels on Friday to close back in the trading range and at the top of the range to set up a test of nearby resistance areas this week. London also closed higher last week and trends are now mixed. A sharply higher US Dollar sunk both markets earlier in the week as did ideas about good supplies for the market. The European grind increased by 2% this quarter. Reports of sun and dry weather along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. Ideas are still that good production is expected from West Africa for the year. 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.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322