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 mixed last week, with Chicago SRW and Minneapolis Spring Wheat markets higher and the KC HRW market slightly lower. There were reports that Polish Wheat was being imported by east coast millers due to price. It is cheaper to buy in Europe and ship the Wheat rather than buy in the US and pay the rail freight. Bad growing conditions and bad planting conditions for Spring Wheat supported futures. The weather is still in focus here and around the world. Scattered showers are being reported in southern areas. Planting of Spring Wheat has been delayed due to wet soils from melting snow and now from reports of dry weather in western production areas of both the US and Canada. It is raining now in many of these areas so conditions are improving. Dry conditions are a developing problem in Russia, and especially in the Spring Wheat areas there. 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, but this could soon change if the Spring Wheat production is not good. Ideas are that both Australia and Russia are harvesting record to near record Winter Wheat crops this year.
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 were higher last week. The weekly charts show that Corn futures have moved into a big gap left by the rol from May to July as the front month. Oats are in a sideways trend on the weekly charts. Daily chart patterns for both markets suggest higher prices are coming this week. Reports of strong planting progress and good, but dry initial development conditions were important and were a reason to rally as dry and hot weather is in the forecast for the coming week. There are fears that a drought could be developing in the Midwest, but dry weather at this time should not hurt crops Corn is still finding some support from little US producer selling interest. Most producers are in the fields. US prices are currently very competitive with those from South America as Brazil concentrates on Soybeans exports and not Corn, so the current export sales pace has been disappointing.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and Soybean Oil were higher last week and Soybean Meal closed lower. Planting weather remains very good with little if any precipitation in the forecast for the next week to 10 days. Planting will be complete by then and then the market will worry about hot and dry weather for the Midwest. It is expected to be hot and dry this week, but the Soybeans production can take those conditions for now. The US debt ceiling crisis was a negative factor in prices for much of the week, but part of the rally on Friday came from reports from Washington that negotiators were close to a deal. Brazil basis levels are still low and the US is being shut out of the market for most importers. Brazil is still selling a lot of Soybeans to China to feed its Soybeans demand, but Chinese customs is now making delivery of the beans very difficult by delaying entry into the country by about two weeks and the economic news might help keep Chinese imports less than expected. Brazil has a very good crop, but the additional Soybeans grown in Brazil will be partially wiped out by the losses in Argentina. The Argentine crop is now estimated at just 21 million tons. Argentina has been forced to import from Brazil to keeps its crushing facilities operating. The daily charts show that Soybeans and soybean Oil were trying to complete bottom formations at the end of last week
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice closed about unchanged last week after a sharp rally in July on Friday brought prices back from a lower trade New crop months were a little higher in sympathy with July as the weather is good for crop development. There was also some buying noted on hot and dry conditions developing in the Delta, but these conditions should benefit crops initially. Harm could come if a drought develops. It is expected to be hot and dry this week. Old crop offers still seem hard to find right now, but demand has been a problem all year. Export demand has been uneven. Mills are milling for the domestic market in Arkansas and are bidding for some Rice, but at l4east some mills say they now have enough bought to last until the harvest of the next crop. USDA showed that the next crop is developing fast and that conditions are very good in Rice country.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was higher on Friday but lower for the week as demand improved on a weaker Ringgit. Trends are sideways on the daily charts and down on the weekly charts. In Malaysia, April production was 7% less than March at 1.196 million tons. Exports were all down and ending stocks were estimated at 1.597 million tons, down over 10% from last month. Canola was higher on Friday and lower for the week. Trends are turning down on the daily charts and are down on the weekly charts. Reports indicate that domestic demand has been strong due to favorable crush margins, but export demand is questioned, especially since the release of the weaker than expected Chinese economic data last week. Scattered showers and rains have been reported so planting and initial growth conditions are good.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton rallied to close much higher on Friday, but still was lower for the week as traders continued to worry about a fallout from the failure of Congress to reach a new debt limit ceiling. Failure to agree on a new debt ceiling increase could push the US and world economies into recession and hurt Cotton demand, but there were signs that the situation could be resolved on Friday to provoke the rally. Also noted good and improving growing conditions and average planting progress for the US crop. Forecasts for showers are still showing in forecasts for West Texas to Oklahoma and Kansas and are expected to be beneficial. Ideas are that the world economic problems were fading into the background as the US stock market has held strong and as the Chinese economy gets better after all of the Covid lockdowns.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ closed higher last week and trends are up on the daily and weekly charts. Futures remain supported by very short Oranges production estimates for Florida. 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 closed lower and London closed higher on Friday, but both markets were lower for the week as the US Dollar rallied in the face of the US debt ceiling increase negotiations. It now appears that there will be a resolution that will not make the far left or the far right very happy. Short term trends are still turning down in New York amid good Brazilian weather outlooks. There are reports of good rains and dry weather mixed in for Arabica production in Brazil with high production expectations. The Arabica harvest has started and offers of Arabica from Brazil are expected to increase in the short term. There are still tight Robusta supplies for the market amid strong demand for Robusta, but the Brazil harvest is in the market now and is expected to take some of the demand. Producers in Vietnam and Indonesia are said to have almost nothing left to sell and producers in Colombia and Brazil are also reported to be short Coffee to sell. The market really needs big offers from Brazil to sustain any down side movement.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: Both New York and London closed higher on Friday, but lower for the week, and trends are down for the short term in New York. Trends are mixed in London. Unica estimated that Sugar production increased greatly in the first half of May to help the market think that supply shortages might come to an end for at least the time being soon. It said that the first half May crush was 44 million tons, up 28% from last year. Mills produced 2.5 million tons of Sugar, up 50% from last year, and 1.9 billion liters of ethanol, up 15% from last year. The market is still hurt by good growing and harvesting conditions in Brazil but supported by tight current supplies. 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 less this year as mills are closing early there and Pakistan also has reduced production. 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. European production is expected to be reduced again this year. Chinese production could be the lowest in six years due to bad growing conditions. The ISO said that a sharp reduction for its projection for a global sugar supply surplus in 2022/23 is 850,000 tons from the 4.15 million tons seen in its previous quarterly report in February. The cut was partly driven by downward revisions to production in India (32.8 million tons from 34.3 million) and Thailand (11.0 million tons from 12.3 million), though the ISO said the focus has now shifted to top exporter Brazil.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed lower last week as the market consolidates just below spike highs set in the last few weeks. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast continue, but certified stocks are increasing in New York. The lack of arrivals from West Africa to ports is still important and is supporting futures, but certified stocks have increased a lot this week in New York and deliveries have picked up as well. 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. Cocoa arrivals at ports in Ivory Coast had reached 2.030 million tons by May 21 since the start of the season on Oct. 1, down 5.7% from the same period last season.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
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