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 a little higher on Friday on some follow through selling tied to news that Russia had had decided to participate in the Ukraine grain export agreement after all and on news that exports from Ukraine were still going on. Futures were higher last week. A stronger US Dollar and the reduced pace of export sales for the US were bearish. Russia said that Ukraine sent drones out to harm its Black Sea fleet. Ideas are that weak demand can continue due in part to the stronger US Dollar. The demand for US Wheat still needs to show up and right now there is no demand news to help support futures. The US central and southern Great Plains have been too hot and dry although there were some showers in the western Great Plains this week. Conditions are called good for development of Winter Wheat in the Midwest.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn and Oats closed slightly higher last week. The price action in the second half of last week has not been strong in response to news that Russia had decided to participate after all in the Ukraine grain export program put together by the UN. Russia says that Ukraine sent drones out to its ships in the Black Sea to attack Weak demand for US Corn remains a big problem for the market.. The Mississippi river is low due to the dry conditions seen in most of the central parts of the US and there are no forecasts for an improvement soon even with rain in the forecast for today. Barge traffic has been reduced. The cash market has been strong at the Gulf but weak in the Midwest river areas due to the low river levels. The demand side will need to be watched as Corn demand needs to hold to keep lower ending stocks estimates in play. There are increasing concerns about demand with the Chinese economic problems caused by the lockdowns creating the possibility of less demand as South America has much better crops this year to compete with the US for sales. Export demand in general has been slow so far this year and was slow in the weekly export sales report.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and the products were higher on Friday and Soybeans and Soybean Oil were higher for the week. Soybean Meal was lower. News was that the protests in Brazil over the new president are getting shut down and blockades are being cleared. Lula was the president before the last one and has now regained power. There have been protests that he won, mostly by truckers who had benefitted a lot from the policies of the former administration. Lula is also expected to be more environmentally conscious and that might mean less Soybeans down the road along with greater demand for Ethanol and other bio fuels. Spoybean Meal was lower as Brazil is preparing to export a lot of meal to China. It submitted a list of approved firms to China last week. Domestic demand should be increasing for Soybeans as the crush spreads got richer and provided crushers with a big profit margin for their crushing Ideas are that Brazil is off to a very good start. The Mississippi river is low due to the dry conditions seen in most of the central parts of the US and there are no forecasts for an improvement soon. Barge traffic has been reduced. The trade is worried about demand due to a lack of Chinese interest caused by the Covid lockdowns there and in part by the stronger US Dollar. Brazil is still offering its old crop Soybeans, and South America as a whole is expected to produce a very big crop later this year for harvest next Spring as the weather outlook is positive for crops. However, a third year of La Nina as predicted by meteorologists could cut the production potential. US production ideas remain strong after mostly good weather in August. There are still Chinese lockdowns and there are fears that China has been importing less as a result. However, Chinese data showed huge imports from all sources in September. President Xi has been elected to a third term in China and has stocked the ruling body with his associates so there are fears that nothing will change soon there.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was higher and closed near the highs of the weekly trading range. It has been a remarkable recovery from the recent lows as the market moved much higher in the first part of the week. The price recovery had been remarkable over the past week but some new selling might be found soon as futures and basis are now getting close to being profitable for producers to sell. Some selling was noted as shipping delays caused by the low river levels on the Mississippi and as the harvest pressure continued. Demand in general has been slow for Rice for both exports and domestic uses but export demand was improved last week. The weekly charts show that trends are up. The weekly export sales report was strong and featured big sales to the Dominican Republic.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil futures traded higher last week along with the price action in Chicago. Ideas are that supply and production will be strong, but demand ideas are now weakening and the market will continue to look to the private data for clues on demand and the direction of the futures market. Demand reports for the current month were stronger yesterday. Canola was higher last week along with the price action in Chicago Soybean Oil and a weaker Canadian Dollar. The Canola harvest is about over. Reports indicate that domestic demand has been strong due to favorable crush margins. The Canola growing conditions are much improved and production estimates are higher for the year.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton was sharply higher on Friday and up for the week on ideas of improving demand. There are reports of increased price fixing by mills and hopes that China is about to open again despite its zero tolerance Covid policies. Chinese demand is especially a problem as parts of Wuhan and Shanghai in China got locked down again last week. Trends are now mixed on the charts. Production in the US is very short. The trade is still worried about demand moving forward due to recession fears and Chinese lockdowns but is also worried about total US production potential. It is possible that the continued Chinese lockdowns will continue to hurt demand for imported Cotton for that country and that a weaker economy will hurt demand from the rest of the world.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was higher again Friday and made new contract highs. The market has been holding firm on supply side fundamentals. USDA estimated Florida production at 28 million boxes in its latest production reports and these are historically low estimates of production due in part to the hurricane and in part to the greening disease that has hurt production in recent years. The weather remains generally good for production around the world for the next crop but not for production areas in Florida that have been impacted in a big way by the storm. Brazil has some rain and conditions are rated good. Mostly dry conditions are in the forecast for the coming days. Florida damage is expected to be very big, with many trees lost as well as fruit lost.
Weekly FCOJ Futures
Coffee: New York and London closed higher on Friday and for the week. Ideas that the market remains short of Coffee for nearby needs are still around and are shown in the spreads. Ideas are that the market will have enough Coffee when the next harvest comes in a few months. The spreads in New York are bullish, implying that supplies are less than demand for right now and that prices should be higher. Ideas of a significant recovery in world production next year remains the main cause for any selling There are still reports of improving growing conditions and increasing availability of Coffee in Brazil. More showers and rains are in the forecast in Brazil Coffee areas for this week. The rest of South America and Central America are reported to be in good condition. Vietnam has scattered showers in Coffee areas.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed higher on Friday and for the week last week on ideas of tight current supplies, but as the truckers strike in Brazil was cleaned up. Federal police have been removing the roadblocks and letting transportation resume. More ideas that supplies of White Sugar would soon be increasing for the market could limit the upside for the London market. Brazil truckers are unhappy that Lula won the presidency again and are taking action to block transport inside of Brazil. In fact, the world Sugar market is expected to be in a big surplus production next year. Ideas of a world surplus in the coming year are hurting the prices in both markets, but supply remains tight for now. Brazil Sugar offers are likely to drop in volume with the return of Lula as president of Brazil He is much more environmentally focused than the previous president weas and is likely to return the ethanol and biofuels mandates to previously higher levels. Indian exporters are still waiting for a government announcement on its export policy before offering much to the market. India has had a very good production year and estimated Sugar production is now at 36.5 million tons with 9.0 million tons available for export. Brazil exported 3.75 million tons of Sugar in October, from 2.31 million tons last year.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed higher last week and London made new contract highs. Trends remain up in both markets. The grind reports were released in the last two weeks and showed strong demand. Good production is reported and traders are worried about the world economy moving forward and how that could affect demand. Supplies of Cocoa are as large as they will be now for the rest of the marketing year. Reports of scattered showers along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. 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