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 closed lower last week on news that the FED will keep interest rates high into next year as the means to combat inflation. It was also lower on news that Russia is still offering through the Black Sea although it is asking for $270.00 per ton and the price is considered high for the buyers. Ukraine and the EU countries are offering as well and are getting new business. Demand has been poor for US Wheat as Russia production looks strong and exports from Russia have not abated and now Ukraine is exporting again. Ukraine has now shipped at least three loads of grain through the Black Sea after bombing a lot of Russian ships to allow for safe passage. The Ukrainians feel it is safe enough to ship that way as a number of Russian warships and some other installations are now unable to perform due to Ukrainian bombings. The news could impact any new demand for US Wheat. Weather forecasts call for drier weather for Australia and Argentina, with production losses now expected for both countries.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn closed slightly higher and Oats were much lower last week The Corn harvest is underway with yield reports showing good and bad results with no real trend evident. The yield reports once again show the value of using GMO seeds as stressful weather was seen in much of the Midwest over the Summer growing season. The market has also been supported as farmers report no real sales or harvest near them. Weather forecasts remain mostly dry but with moderate temperatures for the Midwest for the next week. The harvest is coming so moisture needs are less, and many producers report that Corn is shutting down early and that the harvest could start sooner than normal. 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 relatively cheap and Brazil is getting the business. That could change in the coming year is the growing conditions deteriorate in Brazil as is possible in an El Nino year.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and the products closed lower last week as the harvest starts to expand. Initial yield results show that production and yields are above and below APH data with no real trend showing just yet. The data shows that GMO seeds once again supported better production for many producers. Speculators were liquidating long positions. Ideas that yields are disappointing and reports from USDA of new sales of Soybeans provided the support. Weather forecasts call for dry conditions and near to below normal temperatures for the Midwest. Most longer-range maps indicate the potential for dry weather. Temperatures are expected to be near to above normal. Ideas are that the top end of the yield potential is gone and severe damage is becoming possible in some areas. Brazil basis levels are still low, and the US is being shut out of the market for most importers, but the US is price competitive now. Brazil is still selling a lot of Soybeans to China and other countries.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice closed lower last week as the harvest moved past the halfway point There was not much Rice news around. Yields are called average to below average in Texas and average so far in Arkansas as the harvest moves forward. The quality has been uneven with some crops affected by the extreme heat seen during the growing season. India will not allow Rice exports except for Basmati for now because not enough rain in some production areas. Northern areas are too wet and southern areas are too dry. It instituted a new 20% tax on White Rice exports.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was lower last week along with the price action in competing vegetable oils and on ideas of increasing supplies. Bullish traders still think that El Nino will cause big production problems down the road and are holding out hopes for rallies in the future.. Canola was lower on Chicago price action and as the harvest has become more active. Drier weather is generally forecast for the Prairies and the crop has been stressed, but some rain is falling now to maintain crop condition. Speculators were selling as the trends are turning down again.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton closed a little lower last week in range trading. The Fed said it would keep interest rates high to fight inflation and most physical commodities got hurt with the news last week. Support came from ideas of reduced US and world production potential. Weak demand is still a problem and export demand was trimmed in the supply and demand reports. Ideas are around that Chinese economic data implies less US cotton demand for the coming year but demand from other buyers has been good. There is more talk of a contraction that could develop in China and Cotton demand could be hurt if people have less money to spend on clothes. Ideas of weaker demand due to economic problems in Asia continue and Chinese economic data continues to show weakness. 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. However, there are also production concerns about Australian and Indian Cotton as both countries are likely to suffer the effects of El Nino starting this Fall.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ closed higher last week. The market has been dynamic as traders are wary about selling futures due to the hurricane season that could bring a storm to damage crops in Florida again. Hurricane Lee was the latest storm, but the track has kept it away from the southeast US. Another storm is forming in the Atlantic now to bring more risk to the start. Reports of short supplies in Florida and Brazil are around. Futures are also being supported in forecasts for an above average hurricane season that could bring a storm to damage the trees once again. 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.
Weekly FCOJ Futures
Coffee: New York and London closed lower last week with both markets collapsing as roasters left the market and speculators sold based off the FED comments that interest rates would stay high into next year. Demand for lower quality Arabicas has improved due to the recent price strength in Robusta and as Roasters left the market. Speculators were the best sellers o news that the FED intends to hold interest rates at high levels well into next year. The lack of offers from Asia, mostly from Vietnam but also Indonesia remains a main feature of the market. Offers from Brazil and other countries in Latin America should be increasing but prices are considered a little cheap to create much selling interest from producers and the differentials offered have been very high. The Brazil harvest moving quickly and this fact has pressured prices. Vietnam is not offering much Coffee into the world market as domestic cash prices are very high. Conab in Brazil said that Coffee production is now estimated at 54.4 million bags, from 54.7 million in My and 50.9 million last year. Arabica production is estimated at 38.2 million bags and 16.2 million bags of Robusta. It estimated Arabica production at 32,7 million bags of Arabica and 16.8 million bags of Robusta in May. Sources in Brazil said that the harvest is now about complete and that the crop is about 52% sold.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York closed higher last week as the market continues to see stressful conditions in Asian production areas. London closed lower but held to the recent trading range Chart trends are mixed. The Asian dryness the main feature. Traders are worried about the lack of Sugar exports from India. The Indian monsoon is expected to withdraw early this year and leave Sugarcane high and dry. Many growing areas have been dry, anyway. There are also worries about the Thai and Indian production potential for this year of El Nino. Reports of offers from Brazil are still around but other origins are still not offering, and demand is still strong. Brazil reports very good harvest conditions but the weather in Southeast Asia is currently dry. Indian production is less this year and Pakistan also has reduced production and the monsoon has been uneven so far in both countries. Thailand production is also down a lot this year and many Asian countries are worried about El Nino impacting future production.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed lower last week despite ideas of tight supplies. The charts suggest that a correction has started an it is possible that futures and cash prices have gotten a little too high for the demand side of the market despite production losses seen during the growing season. The supply and demand situation remains bullish. Reports of diseases in West Africa that are hurting production continue. The diseases are from too much rain falling at this time. 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 that could also affect the main crop production.
Weekly New York Cocoa Futures
Weekly London Cocoa Futures
Questions? Ask Jack Scoville today at 312-264-4322