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
Weekly Ag Markets Update – 04/03/2023
Wheat: Wheat markets were higher last week, with Kansas City and Minneapolis leading the way. USDA estimated planted area at 49.855 million acres with Spring Wheat planted area reduced from last year. The news pushed Minneapolis prices higher on Friday. The quarterly stocks estimate was above the average trade expectation at 946 million bushels. Russia announced it is increasing taxes on exports of Wheat. Cargill and Viterra said that they will shut export programs in Russia and might be bowing to Russian pressure to do so as the country is moving to take more control of the export program. Trends are mostly up on the daily charts. 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. 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 on Friday and for the week as traders reacted to the USDA reports. USDA estimated the quarterly stocks at the low end of trade estimates at 7/401 billion bushels. The prospective plantings were estimated at 91.996 million acres and at the high end of trade expectations. Bull spreads were a feature of the trade all week, but especially on Friday. The USDA export sales report came in at the low end of trade expectations. Oats were mixed 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 has improved because of the price differentials and the lack of a Brazil offer into the market. This trend should continue for the next few months if not longer. Prices from South America should now remain strong as countries there concentrate on Soybeans exports and not Corn. 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, but the harvest of Soybeans and the planting of Corn is now progressing well. 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 and for the week. USDA released its quarterly stocks and prospective plantings reports and both were considered bullish for futures. The quarterly stocks were 1.685 billion bushels and the prospective planted area was 87.505 million acres. Both were within the range of trade guesses but both were at the low end of guesses. The stocks report was considered more bullish and bull spreads were featured. The trends are up on the daily reports for Soybeans and Soybean Meal and mixed for Soybean Oil. Trends are still down on the weekly charts for Soybeans and Soybean Oil and are mixed for Soybean Meal. Reports from Brazil show that basis levels there are under pressure due to the large crop being harvested now. Private analysts say the harvest there was 70% complete a week ago so should be about 80% completer now. The basis might get higher later in the marketing period 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. Soybeans export demand is flowing to Brazil now. It remains hot but rains are reported in Argentina and crop conditions are getting stable. 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.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice was lower again on Friday and lower for the week after trading as high as 1800 May one more time. USDQ estimated Rice plantings near 2.6 million acres so a significant increase in production is possible this year. Plantins last year were near 2.2 million bushels. Trends are mixed to down on the May charts. The weekly export sales report showed weaker demand. Demand has been good from domestic sources and offers seem hard to find right now. Export demand has been uneven and was low last week. Export 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 remains active in Texas and southern Louisiana with field conditions called very good in Louisiana and too dry in parts of Texas.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil closed higher last week and remains in a sideways trend on the weekly charts 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 there. The controls are expected to last through Ramadan. Peninsular Malaysia has had bad weather. Canola was higher but held inside the trading range of the previous week. 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 on Friday in response to the planted area reports released by USDA. The trade expected planted area to be about 11.2 million acres this year and USD estimated the area at 11.4 million acres. Cotton closed higher for the week last week as demand returns to the market. The weekly export sales report was strong yesterday and featured buying from Vietnam and China. Ideas are that the world economic problems were fading into the background as the US stock market has rallied. Chart trends turned p. Chinese buying should stay strong as the country improves economically as it opens up from the covid lockdowns.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ was higher and closed near the highs of the week. Trends remain up in the market. 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. The Florida Dept of Citrus said that FCOJ inventories are down 38% from last year.
Weekly FCOJ Futures
Coffee: New York closed lower last week and London closed higher on ideas of little on offer from producers. Demand ideas remain strong for Robusta on price comparisons with Arabica and demand for Arabica has suffered. Producers in Vietnam are said to have low stocks left to sell. Trends remain down in New York but are sideways in London. The lack of offers from South America and Vietnam is still supporting prices and reports indicate that demand for Robusta from Vietnam is strong and increasing due to cost differentials with Arabica. Differentials are now weakening in Brazil, Honduras, and Colombia, but reports indicate that differentials might start to firm up again as production ideas are low for Colombia and Brazil. 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.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London both closed higher and at new highs for the move last week. Supplies are tight. 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. New crop Brazil production is solid this year but is still in the fields. Reports from private analysts suggest that Brazil can have a 13% increase in center-south production. Brazil producers are currently active in the futures market placing hedges on the production. 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 and London closed higher on Friday and were higher for the week. London was initially lower on Thursday and actually hit the first target down for the move before rebounding to close back in the trading range and with slight gains. New York held to the recent range and closed at the upper end of the range. New York appears ready to make a new leg up on the charts. Wire reports suggest that producer selling increased on the recent rally in these markets. Trends remain up for at least the short term. Talk is that hot and dry conditions reported in Ivory Coast could curtail main crop production, and main crop production ideas are not strong. Mid crop production ideas are strong due to rains recently reported in Cocoa areas of the country. Ghana has reported a disease in its Cocoa to hurt production potential there, but overall production expectations are high. The rest of West Africa appears to be in good condition. The weather is good in Southeast Asia. Ivory Coast exports are now 1.7857 million tons down 1.5% from last year.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322