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 a little lower last week, but rebounded after making new lows for the move. The advent of very cold weather into the central US promoted ideas of limited Winterkill for Winter Wheat markets and very dry conditions in the northern Great Plains and Canadian Prairies until now are keeping production ideas for next year in check. There was snow cover to protect many of the crops so little if any damage is expected. The big weakness in Soybeans caused weakness in Wheat as did a dismal export sales pace to date for US Wheat. Black Sea offers are still plentiful and Russian prices appear to be about 264.00 per tons FOB with Ukrainian prices about the same. However, Ukraine said that it is having trouble with shipping as much of the Wheat is shipped through the Red Sea due to the Houthi bombing of ships there. EU countries are offering as well and are getting new business. Demand has been poor for US Wheat as Russia production looks strong.
Weekly Chicago Soft Red Winter Wheat Futures
Weekly Chicago Hard Red Winter Wheat Futures
Weekly Minneapolis Hard Red Spring Wheat Futures
Corn: Corn closed a little lower last week in consolidation trading as ideas of too much production for the demand in the US continue. The charts show that Corn did not confirm a move to lower prices in the second half of last week and rebounded to close in the trading range. Oats were higher on the cold and dry weather seen in northern areas and Canada. Trends are sideways on the daily and weekly charts in this market. The market anticipates increased selling from US producers, but many have sold enough, and elevators and processors are reported to be full. There are also forecasts for a lot of very cold air for the Midwest to keep farmers inside and not opening the bins. Producers are also looking for higher prices now as crops are in the bin for the Winter. Ideas of weak demand are keeping prices low. The market feels that there is more than enough Corn for any demand.
Weekly Corn Futures
Weekly Oats Futures
Soybeans and Soybean Meal: Soybeans and Soybean Meal were higher last week on what appeared to be speculative short covering, but Soybean Oil was lower. The precipitation keeps falling in Brazil is expected to continue through this week. Soybean Meal remains weak on increasing confidence that Argentina will return as a major exporter and as US crushers are crushing for oil and have a lot of extra meal available. Support also came from reports of reduced Brazil production. The trade remains concerned about the weather forecasts for South America but is holding to ideas of production over 150 million tons. Our source suggests that production in Brazil could be much less due to the extreme weather seen already. Wire reports indicate that Chinese hog herds have been cut significantly and much less Soybean Meal demand is expected from that sector. Soybeans imports requirements could be 20% less as a result.
Weekly Chicago Soybeans Futures
Weekly Chicago Soybean Meal Futures
Rice: Rice closed a little higher last week. The charts show that futures remain in a trading range, but are trying to break out of that range to the upside. The weekly export sales report showed improved demand from Latin America and Japan. Demand reports have been weaker lately and have featured traditional buyers in Latin America and Asia. It was cold in the southern US last week and cash movement has been at a minimum. The market acts firm despite the USDA long grain reports that implied bigger supplies and higher ending stocks as world data showed cuts to ending stocks levels.
Weekly Chicago Rice Futures
Palm Oil and Vegetable Oils: Palm Oil was higher last week ideas of better demand. China has been a noted buyer recently. MPOB estimated production at 1.550 million tons, down 13.3% from November. Demand was also down, but ending stocks were estimated at 2.291 million tons, down 4.6%. Trends are turning up on the daily charts and on the weekly charts as futures are once again testing important resistance areas on the weekly charts. Canola was higher in consolidation trading. Current forecasts call for generally improved growing conditions in Brazil this week. The Canola crop is harvested, and it is in bins, so it will take some price movement to get new farm sales. Trends are mixed on the daily and weekly charts in this market.
Weekly Malaysian Palm Oil Futures
Weekly Chicago Soybean Oil Futures
Weekly Canola Futures
Cotton: Cotton closed higher last week and exploded higher on Friday on the back of a very strong weekly export sales report. USDA said that export sales were 470,000 bales last week and that China bought 227,700 bales. Reports indicate that the US cash market has been moderately active with some producer selling and mill fixing noted. The US economic data has been positive, but the Chinese economic data has not been real positive and demand concerns are still 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 but recent demand from China is starting to put those concerns on the back burner.
Weekly US Cotton Futures
Frozen Concentrated Orange Juice and Citrus: FCOJ closed higher again last week on sharply higher to limit up trading on Friday. The daily charts suggest that the market is trying to find a low at this time. The overall downside moves imply that supply is finally getting bigger than demand and imply that consumer demand has dropped significantly in recent weeks. Prices have been moving lower on the increased production potential for Florida and the IUS and also in Brazil. There are no weather concerns to speak of for Florida or for Brazil right now. The weather has improved in Brazil with some moderation in temperatures and increased rainfall in the forecast for this week. Brazil got more than expected rains over the weekend. Reports of short supplies in Florida and Brazil are around but will start to disappear as the weather improves and the new crop gets harvested. Historically low estimates of production in Florida 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 higher last week with London leading the way. Robusta offers remain difficult to find but appeared to increase last week or else demand moved away from Robusta to lower quality Arabica. However, the lack of offer of Robusta remains the main bullish force behind the market action. Brazil weather continues to improve for best Coffee production. Rains continued to fall in parts of Brazil Coffee areas and Vietnamese and Brazilian producers remain reluctant sellers. Brazil production areas are seeing some very beneficial rainfall this current week, but not all areas as parts of Sao Paulo and Parana and southern Minas Gerais remain too hot and dry. Arabica and Robusta areas were affected by drought, but the current forecasts call for a lot of help in affected areas. Brazil weather remains uneven but is improving for the best crop production. Reports indicate that logistical problems remain to delay shipments from Brazil.
Weekly New York Arabica Coffee Futures
Weekly London Robusta Coffee Futures
Sugar: New York and London closed higher last week and trends turned up again on the weekly charts. Reports indicate that logistical problems continue to plague Sugar shipments from Brazil. Brazil weather forecasts call for dryness in the south and continued scattered showers in central and northern areas this week but showers in all areas starting this weekend. The market continues to see stressful conditions in Asian production areas but has noted that India has changed its Ethanol policy to make more Sugar available to the market. There are worries about the Thai and Indian production potential due to El Nino and talk that India could turn into an importer next year. Offers from Brazil are still active but other origins. are still not offering or at least not offering in large amounts except for Ukraine, and demand is still strong. Brazil ports are very congested with shipments of Corn and Soybeans, so shipment of Sugar has been slower
Weekly New York World Raw Sugar Futures
Weekly London White Sugar Futures
Cocoa: New York and London were higher last week. The weekly charts show that both markets broke out to the upside in a big way. New York gapped higher on the weekly charts last week. The availability of Cocoa from West Africa remains restricted and projections for another production deficit against demand for the coming year are increasing. The harvest seems to be coming and demand could be a problem with the current very high prices. Traders are worried about another short production year and these feelings have been enhanced by El Nino that could threaten West Africa crops with hot and dry weather later this year. The main crop harvest is starting in parts of West Africa so the losses will become minor for now. Scattered to isolated showers are reported in the region now and the harvest is coming. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue,
Weekly New York Cocoa Futures
Weekly London Cocoa FuturesQuestions? Ask Jack Scoville today at 312-264-4322