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 higher on news that Russia was once again bombing Ukraine ports on the Black Sea and Danube River. Ukraine is now trying to load ships and exporting through the Black Sea and some ships have in fact been loaded at those ports. This makes a lot more Wheat available to the world at cheaper prices as Ukraine will not have to send Wheat via the EU land route at a much greater expense. Russia is still exporting and offering Wheat into the world market at $270.00 per ton and is getting quite a bit of business. Ukraine and the EU countries are offering as well and are getting new business due to the higher Russian prices. Demand has been poor for US Wheat as Russia production looks strong and exports from Russia have not abated and Ukraine is still exporting, although mostly over land through the EU at higher costs. Ukraine has lately shipped at least three loads of grain through the Black Sea after bombing a lot of Russian ships to allow for safe passage. 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 higher and might finally be breaking out of the extended sideways range it has been in for months. Oats were lower in range trading. The Corn harvest is underway with yield reports showing good and bad results with no real trend evident. Farmers report no real sales of Corn as they wait for higher prices. 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 both products closed lower last week and trends remain down on the daily and weekly charts. Weaker Crude Oil futures affected Soybean Oil and Soybean Meal was weaker on big production ideas as crushers crush for the oil these days due to higher petroleum futures. Initial yield results for the new crop show that production and yields are above and below APH data with no real trend showing just yet. The data has been called disappointing to traders as production appears to be less than expected so far this crop year. Weather forecasts call for dry conditions and below normal temperatures for the Midwest for the first half of the week. 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 and reports indicate that the availability of Brazil Soybeans might be ramping down.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice closed lower again on follow through selling and recession fears about the US economy and the world economy. Ideas are that production will be less in this and coming reports. 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.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was lower last week on weakness in other vegetable oils and petroleum markets. Traders still think that El Nino will cause big production problems down the road and are holding out hopes for rallies in the future, but supplies appear to be very strong for now. Canola was lower in narrow range trading. Drier weather is generally forecast for the Prairies and the crops have been stressed, but some rain is falling now to maintain crop condition. Harvest is active and speculators were selling.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton closed about unchanged last week as demand fears met supply expectations as the stock market made new lows for 2023 and is now negative for the calendar year. Ideas are that the US could be headed into a recession and cause demand to be soft. Ideas of weaker demand due to economic problems in Asia continue and Chinese economic data continues to show weakness, but prices are supported by ideas of tight supplies here in the US and around the world. 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. USDA will issue new production and supply and demand reports this week that are expected to show less production of US Cotton. 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 sharply higher last week and started a new leg up from the recent trading range. 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. Futures have stalled out in the last week as the hurricanes are missing Florida and are instead landing farther north up the coast. 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. Florida Citrus Mutual said that inventories of FCOJ are now 44.5% less than last year.
Weekly FCOJ Futures
Coffee: New York and London closed lower last week, with most of the weakness in London on reports of improved the offers from Brazil and very good rains in Vietnam. Trends are still mixed on the New York daily charts but are down in London. It has been hot and dry in Brazil and the weather is starting to support the prices in New York. Light rains are now b3ing reported in central and southern growing areas. Demand for Robusta and lower quality Arabicas has improved. The lack of offers from Asia, mostly from Vietnam but also Indonesia remains a main feature of the market, but the offers are starting to improve with the Vietnam harvest progressing and the US Dollar moving higher. 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. These are moderating as the new harvest comes to the market.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed higher again Friday and trends started to turn up again on the daily charts. There are still forecasts for rain in Brazil after a spell of very hot and dry conditions, but the market continues to see stressful conditions in Asian production areas. The Brail rains is underway now, but showers have been light and scattered. The Asian dryness is still the main feature. Many growing areas in India have been dry, and exports have indicated that production has suffered. The government there now says it will have more than enough production for the domestic demand but will limit exports to help control inflation. There are also worries about the Thai and Indian production potential due to El Nino. Offers from Brazil are still active but other origins are still not offering, and demand is still strong.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed higher last week on what appeared to be speculative buying. The main crop harvest comes into focus and as farmers in West Africa report good pod development. The supply and demand situation remains bullish. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue, 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