Winter Wheat markets were higher at the close last week as the Winter Wheat harvest started to get complete. Wheat has traded in a choppy fashion all week as the market tries to decide which way Wheat prices are going here and overseas. Spring Wheat was developing under good growing conditions but futures prices closed higher. Yield reports from the central and southern Great Plains have been variable, but generally a little better than expected. Soft Red Winter yields are high. The Winter Wheat markets are in up trends on the weekly charts. Spring Wheat markets show mixed trends as good conditions are also reported in much of Canada. It is still dry in France and Russia and now Spring Wheat areas of Russia are being affected. Russian Winter Wheat yields have improved over time as harvesters move into areas that had better growing conditions. Australia remains in good condition and is getting beneficial rains in the east. The west is too dry. About half of the Argentine Wheat belt is too dry.
Corn was lower. It is still a weather market. Rains fell in many of the drier areas of the Midwest again last week and greatly benefitted the crops. It has turned cooler and is considered good for kernel fill. Trends are down in Corn. Meats processors are back and are operating at close to capacity. Meats wholesale and retail prices are stable. Recent reverses by some states on opening orders are hurting demand ideas for ethanol, but ethanol demand has been increasing. US prices are high in the world market so export sales of Corn are expected to be less.
Soybeans and Soybean Meal
Soybeans were a little higher on better Chinese demand. USDA noted that China had bought over 1.9 million tons of new crop Soybeans in its weekly sales report on Thursday. China has become a much more active buyer of Soybeans here in the US and has promised to ramp up purchases in order to comply with commitments it made under the Phase One trade deal. Its commitments have been thrown into doubt by the continued political tensions between the two countries. China has remained a very active buyer in South America even as it has increased Soybeans buying here in the US, so the overall amount taken from the US might not match the hopes of the trade. Brazil prices are higher for the rest of the world as it starts to run out of Soybeans to export, so China and the rest of the world will look to the US for additional supplies. The US weather is considered good for growing Soybeans with cooler temperatures and beneficial rains.
Rice was lower as harvest is active near the Gulf Coast. New crop prospects appear solid for increased production in the coming year. The area is larger and the growing conditions are mostly good. The combination of good export buying in general and the buying inside the US due to the Coronavirus has made the market short old crop Rice. There are ideas that the mills are well covered into new crop, but little Rice is available from producers. The crops that got planted are in very good condition in the south and near the Gulf Coast and are called in good condition in Mississippi, Arkansas, and Missouri. Texas and southern Louisiana field yield reports are strong.
Palm Oil and Vegetable Oils
Palm Oil closed lower on profit taking after news of renewed demand interest from India and China and on reports of less production from Malaysia and Indonesia. Flooding and a lack of workers for the plantations have been the reasons to see less production. Higher world petroleum prices helped with ideas of increased bio fuels demand. Palm Oil has been hoping for better demand from importers as world economies slowly open after being closed by the Coronavirus epidemic. Indonesia continues to focus its Palm Oil on internal demand for bio fuels. Soybean Oil and Canola were higher. Soybean Oil found support on increased demand ideas. Canola closed higher despite good growing conditions in Canada. Crop conditions are mostly good and farmers have been selling old crop supplies. The weather has been warmer the past couple of weeks and most areas have seen rain.
Cotton closed higher on improved demand and as bad growing conditions continued in West Texas. Export demand for US Cotton has been poor for the last few weeks but was improved last week. The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks. However, economic improvement in the US was thrown into doubt as Coronavirus cases surged higher in states that had reopened. The retail demand has been slow to develop as many consumers got hurt economically due to stay at home orders during the height of the pandemic and have little disposable funds to spend on clothes. Demand will slowly improve but the industry should have plenty of supplies to work with in the short term. The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth. However, it has been very hot and dry in West Texas and crops there are suffering.
Frozen Concentrated Orange Juice and Citrus
FCOJ was lower. The market remains in a trading range but short term trends are starting to turn down. The fundamentals remain mostly positive for prices. Florida production is now estimated at 67 million boxes, unchanged from last month. New crop production could be hurt by an extended flowering season for the early varieties. California and US production was increased. Support is coming from the continued effects from the Coronavirus that are keeping people at home and drinking Orange Juice. Demand from grocery stores has remained strong in response to the increased consumer demand. Inventories in cold storage remain solid so there will be FCOJ to meet the demand, but inventories are creeping lower. There is increasing concern about the food service demand not improving even with the partial opening of the states. The weather in Florida is currently good for the crops. The tree condition is called good. Brazil has been dry and irrigation has been used. The harvest is active in Brazil.
Futures were higher and were led higher by New York as it caught up to the recent strength in London. Chart trends have turned up for at least the short term. There are renewed concerns about the weather in Vietnam. It was dry during flowering time and is dry again. Production ideas are lower. Demand overall remains down with the US still locking down due to the Coronavirus resurgence in some states. The demand from coffee shops and other food service operations is still at very low levels. Consumers are still drinking Coffee at home and the return of the Coronavirus outbreak will keep things that way. Europe is emerging from lockdowns. The Brazil harvest is active but shipping and collection have become very difficult due to the widespread outbreak of the Coronavirus there. Even so, the pickers are showing up for work and ports are operating normally. Ideas are that production will be very strong this year as it is the on year for the trees. The strong production ideas are coming despite hot and dry weather seen in the country at flowering time.
New York and London closed higher and made new highs for the move. Ideas are that there is plenty of Sugar for the world market, but getting the Sugar moved is becoming more difficult with the widespread Coronavirus outbreak in both Brazil and India. Brazil mills have shifted part of the crush to Sugar production due to less ethanol demand. India is thought to have a very big crop of Sugarcane this year but getting it into Sugar and into export position has become extremely difficult due to Coronavirus lockdowns. Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season. There are reduced flows from rivers from China to hinder irrigation of the crops.
New York closed higher and London closed higher. The weaker US Dollar has allowed New York to rally. The West Africa harvest is over to promote higher prices. There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US. Europe is still trying to open its markets again but the Coronavirus is still around and consumers are reluctant to buy. Harvest is now over for the main crop in West Africa and the results are very good. The reports from West Africa imply that a big harvest in the region. Arrivals are on a pace about the same as last year. Ideas are that Southeast Asia also has good crops.
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