Coffee Markets Retreat Amid Speculation, Weather Challenges Persist

Wheat: The markets were lower last week on lower quotes for export Wheat from Russia and on much lower offer prices from Argentina. Tensions remined high between Ukraine, the US, and Russia. There was no news about the conflict seen in recent days to move markets. The threat of war expanded with the US allowing longer range missiles to be used and as Russia is deploying North Korean soldiers alongside its own in battles.

The growing conditions in the US are very good. Reports of very beneficial rains for the Great Plains and Midwest and reports of weaker offers in Russia and Argentina were negative for prices. The rains are falling and will allow Wheat farmers in the US to plant the Winter crops under good conditions.

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 as the US harvest wraps up and as demand remains strong. Mr. Trump announced new tariffs on Mexico that could total 25% and this news led in part to the decline. Mexico is the largest buyer of US Corn in the world. The export demand in recent weeks has been very strong and it seems like some of the buying is in anticipation of the new presidential regime starting here in January.

President Trump has promised new tariffs on goods and services and some buyers may be making purchases now to avoid the potential for the tariff at a later date. There were no sales announcements in the daily reports from USDA last week. Oats were lower as Canada is also looking at 25% tariffs imposed on exports to the US. The majority of the Oats consumed in the US comes from Canada.

Weekly Corn Futures

Weekly Oats Futures

Soybeans and Soybean Meal: Soybeans were a little higher last week on short covering and despite ideas of big south American production potential of Soybeans and Trump plans to curb the use of bio fuels order to promote more use of petroleum. The products closed a little lower. Trump has proposed to bring tariffs to China that could raise the price of used cooking oil to levels unprofitable for US makers of bio fuels. A major competitor to Soy Oil for bio fuels would be removed.

The tariffs that Trump plans to impose could be another detriment to sales of all products. Brazil looks to produce much more than a year ago and some estimates range as high as 175 million tons for the country. Brazilian farmers are planting what is expected to be a very big crop in central and northern areas of the country. Warm and dry weather in the Midwest recently has hurt US production ideas due to ideas of small and very dry beans in the pods.

Farmers have focused on Soybeans harvest but now are almost done and are almost done with Corn as well. The harvest should be wrapped up this week. Soybeans ae often harvested at moisture levels below 10% this year. Central and northern Brazil rains will continue as it looks like the rainy season is now underway. Soils are in much better shape in southern Brazil and Argentina.

Weekly Chicago Soybeans Futures

Weekly Chicago Soybean Meal Futures

Rice: Rice closed a little higher last week in recovery trading, and the trends are still mixed on the charts, but are trying to turn up. Lower Asian prices are still reported. Brazil prices remain strong and well above US prices. The harvest is over now and the crops are being stored. Increased producer selling interest is likely at this time as futures have rallied above 15.00/cwt.

Weekly Chicago Rice Futures

Palm Oil and Vegetable Oils: Palm Oil was higher last week in response to ideas of weaker production and on stronger Soybean Oil prices in Chicago. Demand from China has not been good. Ideas of weaker production caused by too much rain and reports of good demand provided support.

The private surveyors have indicated that exports have been weaker so far this month. Canola was lower. The harvest is winding down in Canada and the crops are locked away in the bin. Producers will try to wait for higher prices before selling much.

Weekly Malaysian Palm Oil Futures:

Weekly Chicago Soybean Oil Futures

Weekly Canola Futures

Cotton: Cotton was a little higher last week and the trends are still turning up in this market. Selling came from news that Trump will impose some big tariffs on China, but the tariffs posted were not as high as he had threatened before during the campaign. Support came from a very strong weekly export sales report as some buyers look to cover positions before the tariffs that President Trump is expected to impose.

China has big problems with its domestic economy with consumer buying interest not strong and many people not working. There are still reports of weaker demand potential against an outlook for improved but still rather low US production in the coming year.

Weekly US Cotton Futures

Frozen Concentrated Orange Juice and Citrus: FCOJ closed higher last week and filled a large chart gap on the weekly charts left by the roll from November to January as the top step month. The market remains well supported in the longer term based on forecasts for tight supplies in Florida.

The reduced production appears to be mostly at the expense of the greening disease and some extreme weather seen in the last couple of years. There are no weather concerns to speak of for Brazil right now.

Weekly FCOJ Futures

Coffee: New York and London coffee markets closed lower on Friday after making new multi year highs once again early in the session. It looks like speculative profit taking hit the markets. Reports of reduced coffee offers from Brazil and Vietnam on weather induced short crops continue and there are also reports of too much rain in parts of Central America damaging coffee crops there.

There are reports from Brazil that coffee producers have already sold a lot of Coffee and are holding back on selling more even with good demand. The coffee chart trends are still up in both markets. The coffee harvest in Vietnam is active, but selling has been slow. Rain remains in the forecast for Brazil crop areas. There are now reports for good rains in Brazil as the rainy season is now under way after very dry conditions.

Weekly New York Arabica Coffee Futures

Weekly London Robusta Coffee Futures

Sugar: New York and London closed lower last week and New York made new lows for the movr. The current Brazil rains have kept the harvest and crushing pace down but could provide a boost to produc-tion for next year. Trends are mixed to down in both markets on the daily charts but mixed on the weekly charts. Indian and Thai mills are expecting strong crops of cane.

It is also wet in Brazil, and this has affected harvest progress. Supplies available to the market could be less in the next six months. Total Brazil production has been affected by drought seen earlier in the year and the fires that de-stroyed crops in some areas.

Weekly New York World Raw Sugar Futures

Weekly London White Sugar Futures

Cocoa: Both markets closed higher and at new highs for the move. Chart trends are up in both markets on the daily and weekly charts. Producers in Ghana and in Ivory Coast have been fighting against too much rain that has made it hard to harvest and deliver crops. It has been very wet in West Africa lately and this is bringing concerns that pod disease could develop.

Production in West Africa could be stronger this year on the overall improved weather in Ivory Coast and Ghana. The Ivory Coast govern-ment has now reduced contract offers by about 40% on worries about less production due to too much rain. Ivory Coast port arrivals now total 643,000 tons, from 481,000 tons last year.

Weekly New York Cocoa Futures

Weekly London Cocoa Futures

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