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 higher last week as the war between Russia and Ukraine got hotter. Russia once again attacked and partially destroyed the export facilities in Odessa and said that any ships hauling Ukrainian grain would be considered instruments of war and able to be bombed. Ukraine said the same thing about grain ships bound for Russia. It is now certain that there will be no grain deal soon for exports through the Black Sea. Also, it is unlikely that any ship owner or ship insurer will take the chance on any passage of Ukrainian grain through the Black Sea, and maybe not for Russia, either. The world access to Wheat from at least one and perhaps both countries just got a lot more restricted. Turkey, an intermediary in the talks between the two sides, remains very hopeful of a settlement but so far neither side is giving much to the other if anything at all. Weather forecasts call for drier weather for the northern Great Plains and Canadian Prairies although it will not be real hot. Canada increased its Wheat planted area on Tuesday so production ideas from that country were higher but it is now suffering potential crop losses due to dry weather.
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 on Friday on weather forecasts that remain mostly dry for the Midwest for the next couple of weeks. Then cooler temperatures and rain are in the forecast on some of the computer models but others remain hot and dry. The lack of a clear picture into the next few weeks forced a lot of speculative selling and perhaps some commercial selling was well. The crops are reported to be in mostly good condition now but need rain constantly to maintain the condition due to the lack of soil moisture from three months of drought that ended at the end of June. Demand for US Corn in the world market has been very low and domestic demand has been weak due to reduced Cattle and other livestock production. The Brazil Corn harvest is underway and so export prices for Corn from Brazil are getting relatively cheap and Brazil is getting the business.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and the products were higher last week on weather forecasts that call for dry conditions for the Midwest for the future. These forecasts moderated late in the week and showed the potential for cooler and wetter conditions in a couple of weeks, so some selling was seen in the new crop months late in the week. Soybean Oil was higher on demand ideas. Most longer-range maps indicate the potential for dry weather. Temperatures are expected to be above normal this week. Ideas are that the top end of the yield potential is gone but severe damage has not been reported yet but is becoming possible in some areas. In fact, yield ideas are probably increasing in some areas due to the recent and forecast weather but dropping in others. Reports indicate that bio fuels demand for Soybean Oil is very strong despite the moves in Washington to keep bio fuels demand at more moderate levels and is pushing domestic demand for Soybeans. 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.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice closed lower last week on the continuation charts due to the roll from July to September contracts. However, the market was actually stronger last week, mostly on news that India will stop Rice exports for the foreseeable future. India will not allow Rice exports except for Basmati for now because of too much rain on some the crops and not enough for other areas. Northern areas are tok wet and southern areas are too dry. India is the largest exporter of Rice in the world so it was big news and one that implies that a sharp increase in world price is now possible. This has been an extremely volatile market lately. Growing conditions are very in southern growing areas and the overall new crop price strength has not been good so far. There are some reports of initial harvest going on in southern areas. The weather is still good for crop development. Export demand has been uneven and was poor in the weekly reports released last week.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was lower on Friday in consolidation trading, but higher for the week. The market remains in a trading range. The export data from private sources was reported to be positive by the wire services. Ideas are that current demand is generally weak, with China struggling to open its economy and India looking to Sun oil for imports at the expense of other vegetable oils. It was higher today on reports of stronger export demand from the private sources and on Chicago price action. Canola was higher again last week on dry Prairies growing conditions, but some selling appeared on Friday as some forecasts for some rains started to appear. Drier weather is generally forecast for the Prairies. Trends are up on the daily charts in sympathy with the weather.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton closed higher last week, partly in sympathy with the weather rally seen in the grains markets early in the week and on its own weather rally as very hot and dry weather returned to Texas and the Southwest. The heat has been extreme. A steady Dollar supported Cotton futures by helping with demand ideas of the trade. Ideas of weaker demand due to economic problems in Asia and improved production prospects here at home continue but hopes for improved Chinese economic data are around. There are still many concerns about demand from China and the rest of Asia due to the slow economic return of China in the world market and as China is trying not to buy from the US. There are also worries developing that the US could be moving into a mild recession after many months of superlative growth. Forecasts for showers are still showing in forecasts for West Texas to Oklahoma and Kansas and are expected to be beneficial. Showers are also forecast for the Delta and Southeast.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ closed higher again yesterday, and the trends are still up on the daily charts. It looks like a tropical storm is headed to Florida and there is buying on ideas that the storm could develop into a major hurricane and damage trees. Futures remain supported by very short Oranges production estimates for Florida but might have factored in the production losses into the current prices. 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 product 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 as the market looks for supplies from Brazil and Asia. The origins are not offering much, even Brazil with its harvest moving quickly along. There was news that Rice production in India was affected by too much rain and Coffee could be hit as well. The Brazil harvest is moving quickly along, but the lower prices and a much weaker US Dollar forced Brazil producers to store Coffee instead of selling as they hope for higher prices and a stronger Dollar later in the year. Ideas are that roaster demand is improving with more Coffee and cheaper prices seen in the market now. There are reports of dry weather for the harvest in Arabica production in Brazil with high production expectations. 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 much of the demand. Producers in 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 downside movement.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed higher last week as the market still feels short supplies. Brazil production increasing and as the weather in Southeast Asia is currently good for the next crop production prospects so relief could be coming soon. More Sugar is now available to the world market. India still has problems with current and future production potential. The current year export quota is already gone and the government has no plans to allow for additional exports at this time. Indian production is less this year and Pakistan also has reduced production and the monsoon has been uneven so far in both countries. India announced a higher base price for Sugar paid to farmers to help promote additional planted area.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed higher last week as ideas of tight supplies continue. The markets are both developing trading ranges now so the lack of Cocoa in the market might be part of the price structure for now. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue, 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 lower now with diseases reported in the trees due to too much rain.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322