Weekly Ag Markets Update – 04/24/2023

Wheat:  Wheat markets were lower on another week of bad export sales and on reports that Russia will meet with the UN on the Black Sea Corridor deal with Russia and Turkey and the UN.  Uncertainty about the Black Sea Corridor deal continued.  There remains buying tied to uncertainty about exports from the Black Sea and on bad growing conditions in the western Great Plains, where it remains very dry but where showers and potentially very beneficial precipitation are possible.  Russia has said that the current system cannot last and seems ready to kill the deal completely.  It has been talking to Turkey about the deal and plans to talk to the UN very soon.  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.  Both countries will have a lot of Wheat to export.

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 lower last week, with Corn finding selling pressure from a bad weekly export sales report but still finding support from little US producer selling interest.  The weather was wet and cool in the Midwest last week and producers were not selling Corn, but the market wants Corn now.  It is now wet and cold in the Midwest, but producers are still inclined to wait and might have trouble sourcing trucks to haul grain, anyway.  Most are thinking about getting into th4e fields and are not even worried about the 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.  Prices from South America should now remain strong as countries there concentrate on Soybeans exports and not Corn.  NOAA is forecasting that La Nina will develop this Summer and replace El Nino.  US growing conditions are usually good when this happens.

Weekly Corn Futures

 Weekly Oats Futures

 

Soybeans and Soybean Meal:  Soybeans and the products were lower last week reports that Brazil basis levels are so low that some American processors can import more cheaply than buying from US producers and shipping by rail..  The weekly export sales report showed bad sales.  Brazil has been selling a lot of Soybeans to China to feed its record Soybeans demand.  Brazil has a very good crop, but the additional Soybeans grown in Brazil will be partially wiped out by the losses in Argentina.  Argentina has been forced to import from Brazil to keeps its crushing facilities operating.  The US might sell to China for storage purposes as well and could pick up some new business from countries other than China as Brazil ports will be loaded with ships bound for China.  The US has also bought Soybeans in Brazil this year due to the extreme differences in prices.  Production ideas in Argentina are no higher than 25 million tons, about half a crop, and are mostly lower than this amount.  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 last week.  The main feature of trade was the collapse of May on Thursday in flat price action and on carry spreads after another very poor weekly export sales report.  The spread recovered a little on Friday.  Longs tried to move out of May and into other months but had a lot of trouble getting this done.  It has been a big week for the carry spreads in this market as traders start to prepare for May deliveries starting at the end of this month.  Trends are down on the May daily charts but other months show sideways trends at worst.  The USDA reports released a week ago are the reason for the buying seen in recent sessions.  Medium and short grain estimates were unchanged but ending stocks for long grain dropped by 6.0 million cwt as did the ending stocks estimates for all Rice.  The moves shocked the market and futures went higher.  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.

Weekly Chicago Rice Futures

 

Palm Oil and Vegetable Oils:  Palm Oil was a little higher in quiet trading before the start of the Eid holiday.  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.  In fact, exports so far this month are down about 25% from last month.  Indonesia has not been offering as it tries to build stocks for its own bio fuels industry but it is expected to start offering very soon.  Canola was a little higher last week on planting and fieldwork delays that are returning as the weather is cold and wet again.  Trends are sideways on the daily and weekly charts.  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 sharply lower last week on bad demand ideas as the weekly export sales report was very bad and as forecasts for rain are showing in forecasts for West Texas.  The rains will not solve drought problems but at least producers in the region can get started on fieldwork and hope for better yields this year.  The prospective plantings report highlighted reduced planting ideas from producers.  Ideas are that the world economic problems were fading into the background as the US stock market has rallied.  Chart trends are sideways.  Chinese buying should stay strong as the country improves economically as it opens up from the covid lockdowns.  Chinese CPI data was market positive this week.

Weekly US Cotton Futures

 

Frozen Concentrated Orange Juice and Citrus:  FCOJ closed a little higher last week and trends have turned sideways.  Futures remain supported by very short Oranges production estimates for Florida.  Demand is thought to be backing away from FCOJ with prices as high as they are currently. But the market has not taken any note and continues to charge higher.  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.

Weekly FCOJ Futures

 

Coffee:  New York and London closed higher last week, with London pushing the New York contract to higher levels.  Trends are sideways to down in New York and sideways in London on ideas of increasing offers from producers on the rally on Tuesday.  Weekly chart trends are up for both markets.  The Robusta market has been especially tight and has been pushing on the Arabica price, but Arabica supplies are growing tight in the market as well.  Producers in Vietnam are said to have low stocks left to sell and producers in Colombia and Brazil are also reported to be short Coffee to sell even with the uptick in offers earlier in the week.  The lack of offers from South America and Vietnam is still supporting prices and reports indicate that demand for Robusta from Vietnam is strong.

Weekly New York Arabica Coffee Futures

Weekly London Robusta Coffee Futures

 

Sugar:  New York closed higher and London closed lower last week with the market supported by tight supplies once again   Trends are still up on the weekly charts in both markets.  The production is not there to meet the demand in many countries, with only Brazil among the major producers looking to have a good crop.  Indian production is thought to be less this year as mills are closing early there and Pakistan also has reduced production.  Indian mills have produced 31.1 million tons of Sugar so far this marketing year, down 5.4% from last year.  Thailand mills are also closing earlier than expected so the crop there might be less.  Asian countries could face another year of short production as El Nino returns after years of La Nina.  New crop Brazil production is solid this year but is still in the fields.  Brazil old crop production has been better after mills ran out of cane to crush a year ago.  CONAB said that Brazil produced 510.1 million tons of Sugarcane, from 598.3 million in its previous estimate and 578.8 million tons the previous year.  Sugar production was 37 million tons from 36.4 million in its previous estimate and 34.9 million the previous year.  Ethanol production was 26.5 billion liters, from 26.6 billion in the previous estimate and 25.4 billion last year.   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 last week as the market needs Cocoa.  The lack of arrivals from West Africa to ports is still important and is supporting futures.  Trends remain up for at least the short term.  Talk is that hot and dry conditions reported earlier in Ivory Coast could curtail main crop production, and main crop production ideas are not strong.  Midcrop production ideas are strong due to rain mixed with some sun recently reported in Cocoa areas of the country.  It has turned drier in the last week and the drier weather is creating fears of a short crop again.  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

Weekly New York Cocoa Futures

Weekly London Cocoa Futures

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