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 marketswerehigher on Friday on ideas that prices have fallen enough for current demand fundamentals. Prices are now so cheap that Russia is reportedly thinking about increasing export tariffs or halting exports for a time to rally prices. Reports say that Russian offers continue to hit the world market and world prices. Trends turned sideways to up on the daily charts. The problem remains demand as world supplies are not so large and US inventories are less. Ideas that big Russian offers and cheaper Russian prices would be a feature for a while in the world market was the driving force for the weaker prices, and price weakness could continue. Prices are now so cheap that Russia is reportedly thinking about increasing export tariffs or halting exports for a time to rally prices. Ideas are that both Australia and Russia are harvesting record to near record Wheat crops this year. The demand for US Wheat in international markets has been a disappointment all year and has been hindered by low prices and aggressive offers from Russia.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn closed higher last week on much improved export demand as noted in recent weekly export sales reports from, USDA and US Dollar weakness. Demand from China has greatly increased in the last two weeks. The USDA export sales report was a marketing year high and the third highest sales amount in the last 20 years. Oats were higher and trends remain up in this market. US prices are currently very competitive with those from South America as Brazil concentrates on Soybeans exports and not Corn and US demand could improve because of the price differentials. Prices from South America should now remain strong as countries there concentrate on Soybeans exports, so the US has a chance now to see export demand improve. The Brazil Summer crop and the Argentine crop is developing under stressful conditions. It has been wet so the Soybeans harvest has been delayed and the Safrinha Corn planting is becoming delayed as well. These delays continue. Brazil sources say that 20% of the Winter crop could be planted outside of the ideal window so yields could be hurt in the end. NOAA is forecasting that La Nina will develop this Summer and replace El Nino. US growing conditions are usually good when this happens. However, it is very wet now and some early planting has been delayed.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans the products were higher on Friday, but lower for the week as the Brazil harvest makes it way to the market. Reports from Brazil show that basis levels there are under pressure due to the large crop being harvested now. However, the basis might get higher soon as total South American production is probably about the same as last year. Brazil has a very good crop, but the additional Soybeans grown in Brazil will be wiped out by the losses in Argentina. Argentina has been forced to import from Brazil to keeps its crushing facilities operating. Forecasts from NOAA for very good growing conditions in the Midwest were also a factor, but there is too much rain in most growing areas right now. Soybeans export demand is flowing to Brazil now. Argentina is the world’s largest exporter of Soybeans products while the US and Brazil battle for supremacy in Soybeans exports. It remains hot but rains are reported in Argentina and crop conditions are getting stable. Production ideas there are stable and the Rosario exchange now estimates production near 27 million tons. The Buenos Aires Grain Exchange said production could be 25 million tons. Weather is becoming less important now as the harvest is already underway in central and northern Brazil and is spreading south.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was higher last week and trends are up on the charts. Speculative short covering was seen and ran into little selling interest. Demand has been good from domestic sources and offers seem hard to find right now. Export demand has been uneven and was very low last week. Demand has been an issue for the market all year. Mills are milling for the domestic market in Arkansas and are bidding for some Rice. Markets from Texas to Mississippi are called quiet. Demand in general has been slow to moderate for Rice for exports. Planting is active in Texas and southern Louisiana.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil closed lower last week on weakness in Chicago and on demand concerns There are ideas are that prices can remain elevated due to bad weather in Malaysia but demand remains weaker than hoped for from India and China. Indonesia has revoked some export permits to keep internal prices controlled and to support the bio fuels industry. The controls are expected to last through Ramadan. Peninsular Malaysia has had bad weather. Canola was a little lower last week and trends are down. There was a price recovery in the second half of the week to make weekly losses rather minimal. There are some ideas that Canola futures have fallen enough for now. Brazil is expected to dominate the oilseeds market for the next few months. Reports indicate that domestic demand has been strong due to favorable crush margins.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton was lower and closed at new lows for the move. Chart trends turned down again with the price action on Friday. Selling was caused in large part to the continuing banking criss in the world as Duetche Bank was reported to have financial problems on Friday. The move came despite a strong weekly export sales report and amid continued economic uncertainty. The weekly export sales report showed good demand, and demand ideas are improving. Demand has been ramping up for the last couple of months but fell off. Some ideas that demand could soon increase more as China could start to open its economy in the next couple of weeks. China has also started buying again from Australia after refusing imports from that country for political reasons.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was higher yesterday and trends turned up in the market again. Futures remain supported by very short Orange production estimates for Florida. Demand is thought to be backing away from FCOJ with prices as high as they are currently. Historically low estimates of production due in part to the hurricanes and in part to the greening disease that have hurt production, but conditions are significantly better now with scattered showers and moderate temperatures. The weather remains generally good for production around the world for the next crop including production areas in Florida that have been impacted in a big way by the two storms seen previously in the state. Brazil has some rain and conditions are rated good. Brazil continues to export to the EU and is increasing its exports to the US. Mexico is also exporting to the US.
Weekly FCOJ Futures
Coffee: New York closed higher Friday and at the top end of the recent trading range and London closed much higher as trends turned up on the daily charts. Futures were a little lower for the week in New York, but higher in London. The lack of offers from South America and Vietnam is still affecting prices. Differentials are now weakening in Brazil, Honduras, and Colombia as the recent rally has increased offers, but reports indicate that differentials might start to firm up again after futures prices sold off. Ideas of big production for Brazil continue due primarily to rains falling in Coffee production areas now. Vietnam is estimated to have very good production this year due to a good growing season. There are ideas that production potential for both countries has been overrated. The weather in Brazil is currently very good for production potential but worse conditions seen earlier in the growing cycle hurt the overall production prospects as did bad weather last year. Vietnam is getting less rain now to aid harvest progress but volumes offered have not increased.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed higher last week, and the trends are still trying to turn up in both markets on the daily charts. Supplies are getting tighter to support prices. Indian production is thought to be less than 33 million tons this year as mills are closing early there and Thailand mills are also closing earlier than expected so the crop there might be less. Brazil production is solid this year. Reports from private analysts suggest that Brazil can have a 13% increase in center-south production. Unica said that Brazil mills crushed 608,290 tons of Sugarcane in the first half of March and produced 15,570 tons of Sugar and 264.6 million liters of Ethanol.. European production is expected to be reduced again this year. Some analysts now say that Chinese production could be the lowest in six years due to bad growing conditions.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York closed higher again on Friday and at the tope end of the weekly trading range. Trends remain up for at least the short term. The Dollar has been moving lower again. Talk is that hot and dry conditions reported in Ivory Coast could curtail mid-crop production, and main crop production ideas are not strong. Ivory Coast arrivals are now 1.727 million tons. Down 5.4% from last year. Those ideas changed a little over the previous weekend due to heavy rains reported in Cocoa areas of the country. Ghana has reported a disease in its Cocoa to hurt production potential there. The rest of West Africa appears to be in good condition. Good production is reported for the main crop and traders are worried about the world economy moving forward and how that could affect demand. 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