Weekly Ag Markets Update – 06/12/2023

Wheat:  Wheat markets were a little higher on speculative short covering.  The USDA production and WASDE reports showed little change from trade estimates and were not a reason to take a big position in the market one way or another.  There is a lot of talk that Russia continues to offer a lot of Wheat into the world market at very cheap prices to help keep demand for American Wheat very low, but the government there is setting a floor price at about $240.00 per ton in an effort to make more money.  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 reports some rain now in many of these areas so conditions are improving but might cause a few delays.  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 Russia are harvesting record to near record Winter Wheat crops this year, but Australian production ideas have been fading as El Nino hits the country.

Weekly Chicago Soft Red Winter Wheat Futures

Weekly Chicago Hard Red Winter Wheat Futures

Weekly Minneapolis Hard Red Spring Wheat Futures

 

Corn:  Corn was lower and Oats were higher last week as Corn traders discounted the weather and concentrated non demand news.  Demand for US Corn in the world market has been very low and USDA cut its current year export demand estimate on Friday by 50 million bushels in the latest WASDE updates.  No changes were made for new crop supply or demand, so the 50 million bushel cut to demand went to increased current and new crop ending stocks estimates.  Reports of dry initial development conditions were important. However, some forecasters are calling for a pattern shift to cooler and wetter conditions starting last weekend.  Corn is rolling leaves in southern Midwest areas but most of the Corn should be ok despite the warm and dry weather seen now.  Corn is still finding some support from little US producer selling interest.

Weekly Corn Futures

 Weekly Oats Futures

 

Soybeans and Soybean Meal:  Soybeans and Soybean Oil closed higher last week on reports of strong domestic demand and interior basis levels.  Growing conditions feature cool but very dry weather.  Some showers were expected in the Midwest over the weekend and would be welcomed where they fall.  Reports indicate that bio fuels demand for Soybean Oil is very strong and is pushing domestic demand for Soybeans.  USDA made no new crop changes in the WASDE reports on Friday as expected.  Old crop export demand was cut by 15 million bushels and this was added to ending stocks for the current and the next year.  USDA left South American production estimates unchanged.  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 and other countries.  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.

Weekly Chicago Soybeans Futures

Weekly Chicago Soybean Meal Futures

 

Rice:  Rice closed higher again last week, with July futures leading the way up as an apparent squeeze is under way for that month with deliveries coming at the end of the month.  New crop months have moved to much more moderate gains.  USDA made no real changes in its WASDE reports on Friday with ending stocks trimmed 1.0 million cwt for both old and new crop.  The weather is still good for crop development.  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 least some mills say they now have enough bought to last until the harvest of the next crop.

Weekly Chicago Rice Futures

 

Palm Oil and Vegetable Oils:  Palm Oil was higher on Friday and for the week.  Trends are sideways on the daily charts and down on the weekly charts.  MPOB will release its data for May today.  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.  Ideas are that demand is generally weak, with China struggling to open its economy and India looking to Sunoil for imports at the expense of other vegetable oils.  Canola was higher on Friday and for the week.  Trends are turning sideways 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 closed mixed again on Friday in what was called consolidation trading as the market looked for news to trade on.  It got a lot of news with the latest WASDE reports.  Production was increased via increased harvested area against reduced yields, but demand was increased as well.  Ending stocks were up a little bit at 3.50 million bales.  News from China that Covid has returned and that the economic data from there was sluggish for the month also hurt.  Good and improving growing conditions and average planting progress for the US crop was seen in USDA and NOAA data yesterday.  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 lower again last week, with July futures weakest due increasingly to the roll out of July positions by speculators and commercials.  Futures remain supported by very short Oranges production estimates for Florida.  The Florida estimate went up slightly in the USDA production reports yesterday, but still remains about 25% less than production estimates from last year.  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 much higher last week as traders were more concerned about a lack of fresh coffee available to the market right now.  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 increasing.  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 are also reported to be short Coffee to sell.  The market really needs big offers from Brazil to sustain any down side movement.  Southeast and south Asian producers could see another tough production year this year due to the effects of El Nino.  The weekly charts for Robusta show the potential for a double top to be forming.

Weekly New York Arabica Coffee Futures

Weekly London Robusta Coffee Futures

 

Sugar:   Both markets were higher last week on what appeared to be a big short covering rally by speculators.  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 and Pakistan also has reduced production.  Thailand also has a smaller crop.  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.

Weekly New York World Raw Sugar Futures

Weekly London White Sugar Futures

 

 

Cocoa:  Both markets closed higher and at new highs for the move last week.  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.

Weekly New York Cocoa Futures

Weekly London Cocoa Futures

Questions? Ask Jack Scoville today at 312-264-4322