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 last week and trends are turning up in Chicago SRW but remain sideways in HRW and HRS. It appeared to be a speculative short covering rally. Two weeks ago, USDA cut back on world ending stocks due to weather problems in major Wheat growing areas of the world. The war in Ukraine continues with Russia still bombing Ukrainian ports near the Black Sea and Danube River, but there was no real news from the front over the last few days. Ukraine is now trying to load ships and exporting through the Black Sea and some ships have in fact been loaded at those ports. Russia is still exporting and offering Wheat into the world market. 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, but exports are expected to increase for the rest of the marketing year. 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 last week on what appeared to be speculative short covering. Trends are up in the market now. Oats closed near unchanged on late week buying. The US Corn harvest is continuing with good weather and 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 early this week, then a chance of showers. 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. Demand is increasing now. The Brazil Corn harvest is over 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. It is already hot and dry in central and northern Brazil and in Argentina. Southern Brazil is too wet.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and Soybean Meal were higher last week, but Soybean Oil was lower. New buying was noted as Brazil remains hot and dry in northern areas and too wet in southern areas. Argentina is also dry. Initial yield results for the US 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. Midwest weather forecasts call for dry conditions and above normal temperatures for the Midwest for the first part of the week, then showers and cooler temperatures are expected. 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. The US sales to China have ramped up in the last month.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice closed a little lower last week on ideas of quiet demand as the weekly export sales report was not strong. The market shows a short term trading range on the charts. The harvest is almost over and less Rice is on offer from producers. The USDA reports showed little to get excited about either up or down in price. 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 of bad weather in some production areas. They have imposed export taxes o 20% on sales to keep the Rice in the country.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was higher today on stronger demand indications from India and China and the AmSpec data from Friday. AmSpec showed that exports were almost 886,000 tons so far this month, up 7.8% from last month. Crude oil prices were higher. Some say the market still needs to see less production coming. 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 closed lower yesterday and trends are turning down in this market. Futures appear to have failed at strong resistance levels on the daily charts yesterday. 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 has been active and speculators were selling.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton closed lower last week and trends remain down on the daily charts. Demand remains weak for this market with another poor week of export sales reported by USDA. 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, 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. There are 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, and the trends on the daily charts are up again as the market seems to consolidate just below the highs set in the last week or so. 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. Nelsen said that retail prices are as high as they have ever been at $9.18/gallon. Demand is the lowest since 2001 at 24.08 million gallons for the four weeks ending on October 7.
Weekly FCOJ Futures
Coffee: New York and London closed higher last week on what appeared to be speculative and commercial buying tied to short covering. Trends are up in both markets. Light rains are now b3ing reported in central and southern growing areas of Brazil and conditions are called good. Demand for Robusta and lower quality Arabicas remains strong. 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 lower last week and the trends are mixed for both markets on the daily charts. Little has changed with the fundamentals. There are still forecasts for and reports of rain in Brazil after a spell of very hot and dry conditions and this has delayed loading of ships. 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 indi84ted 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. Mexico is hot and dry and there are increasing concerns about production there.
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London closed higher last week, and the trends are still up in both markets. The EU grind data was stronger than expected and was down 0.9% from last year. Ivory Coast exports are down 10% so far this year. Arrivals at ports are 8.5% less than last year. 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