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Speculative selling lowered the cotton futures

Cotton futures were lower for the week on what appeared to be speculative selling. The chart trends are down on the daily charts. The US Dollar was stronger and hurt demand ideas. The weekly export sales report showed solid Cotton demand. The demand for US Cotton in the export market has been strong even with the Coronavirus



Wheat: Winter Wheat markets were lower on fund and other speculators selling tied in part to the stronger US Dollar. Minneapolis closed a little higher on Friday but lower for the week.  It has been a demanding market and the export demand has not been good.  The weekly charts still show downtrends in HRW and SRW. Minneapolis trends are turning down.  Demand has been disappointing so far as traders had expected better exports due to problems in Russia and parts of Europe earlier in the year.  Ideas are that rain and snow that is falling in the Great Plains will help injured Winter Wheat. Temperatures dropped below 0F in many areas and that is cold enough to kill an unprotected crop. The actual damage will take some time to see under warmer temperatures and it might take until harvest to see the full effects of the recent extreme cold. 

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 in part in response to massive Chinese buying. The country bought about 4.0 million tons of US Corn last week.  Reports of Asian Swine Fever in China hurt speculative Corn buying and brought buying into hogs. Chinese demand had been strong until recently and it looks like they need the Corn either way.  Prices inside China for Corn remain extremely high. It is still raining in central and parts of northern Brazil, but farmers were still able to harvest some of the Soybeans area and plant some of the Winter Corn around the precipitation. The Winter Corn crop is on a very slow pace to be planted and progress is well behind normal. Argentina has seen a general rain in the last week and Corn in Argentina has stabilized after losing yield to dry conditions and crop stress.  Southern Brazil is also in a better place on crop conditions.  The main crop harvest has started in parts of Brazil, but progress will be slow due to the late planting dates due to dry conditions earlier in the year.  The second crop of Corn planting is also being delayed and yield estimates for South American Corn have been reduced.

Weekly Corn Futures:                                                                       

 Weekly Oats Futures

Soybeans and Soybean Meal: Soybeans closed near unchanged for the week and Soybean Meal closed higher in recovery trading.  Weekly chart trends are still sideways for Soybeans and are still down in Soybean Meal. Selling came on ideas that the ongoing Brazil harvest will kill current demand for US Soybeans. Demand was worse last week in the weekly export data but the US has now sold 99% of its target amount of Soybeans for the marketing year and really has very few Soybeans left to sell.  The Brazil harvest had been delayed due to late planting dates early due to dry weather and now too much rain that has caused harvest delays and some quality problems in the north as well. Harvest activities have increased but the harvest remains very slow overall. China has been buying for this year and next year here but now mostly in South America. US internal demand has also been strong as seen in the crush data. 

Weekly Chicago Soybeans Futures:

Weekly Chicago Soybean Meal Futures

Rice: Rice was mixed to higher on Friday and higher for the week. There seemed to be commercial buying going against some fund and other speculators selling. Export demand has been good and the market got another good weekly export sales report last week. The cash market has not felt any increased export demand lately and mill operations are reported to be on the slow side. Texas is about out of Rice, but there is Rice available in the other states, especially Arkansas. Asian and Mercosur markets were steady to firm last week.  The new crop Rice is getting planted in Texas now.

Weekly Chicago Rice Futures

Palm Oil and Vegetable Oils: Palm Oil closed lower last week and gave back its uptrend. Ideas of tight supplies are still around but supplies should start to seasonally increase. The production of Palm Oil is down in both Malaysia and Indonesia as plantations in both countries are having trouble getting workers into the fields. Wet weather has caused even more delays. The weather is improved and trees seasonally increase production about now.  Export demand has been less for the last couple of months. Soybean Oil and Canola was lower on what appeared to be speculative profit-taking.  Worries about South American production are supporting both markets but both are looking for new triggers to promote more buying.

Weekly Malaysian Palm Oil Futures:

Weekly Chicago Soybean Oil Futures

Weekly Canola Futures:

Cotton: Futures were lower for the week on what appeared to be speculative selling. The chart trends are down on the daily charts. The US Dollar was stronger and hurt demand ideas. The weekly export sales report showed solid Cotton demand. The demand for US Cotton in the export market has been strong even with the Coronavirus and the strong demand could continue as USDA also cut Brazil production due to reduced planted area this year. The US stock market has been generally firm to help support ideas of a better economy here and potentially increased demand for Cotton products. 

Weekly US Cotton Futures

Frozen Concentrated Orange Juice and Citrus: FCOJ closed near unchanged for the week. The tone of the market is mixed on the daily charts but the weekly charts are still showing a completed bottom formation.  Moderate temperatures are expected for Florida this week. The weather in Florida is good with a few showers to promote good tree health and fruit formation.  Showers are falling in Brazil now and crop conditions are called good even with drier than normal soils.  Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production.  It is dry in northern and western Mexican growing areas.   

Weekly FCOJ Futures

Coffee: Futures were lower in both markets on what appeared to be fund and other speculator selling based on the stronger US Dollar. The daily and weekly charts appear ready to turn its trends down after the price action last week. London is still more of a sideways pattern but looks ready to fail.  Cash market buyers are not buying that much Coffee these days. Vietnam producers have not sold since the Tet holiday but are expected to start selling soon. There are reports of good weather in Vietnam for the harvest.  Indonesia has had good weather but has little coffee to sell now. Brazil was dry for flowering and initial fruit development. Rains have been falling that should be very beneficial.  Central America is also drier for harvesting but production might have been reduced due to very wet conditions during the growing season. Good growing conditions are reported in Colombia and Peru.  Africa is also noting good growing conditions. 

Weekly New York Arabica Coffee Futures

Weekly London Robusta Coffee Futures

Sugar: New York and London closed lower on a weaker Brazilian Real and good Brazilian growing conditions.  The US Dollar turned higher and helped create some selling from the funds and other speculators.  The chart trends are mostly down on the daily and the weekly charts.  The market appears to be searching for a new source of demand to complement the traditional buying.  Reports indicate that industrial users of Sugar have been the most active consumers.  Rains were reported again in Brazil.  It has been raining in south-central Brazil and the production of cane is looking solid for the next harvest.  Production has been hurt due to dry weather earlier in the year.  India is producing less Sugar and more Ethanol. 

Weekly New York World Raw Sugar Futures

Weekly London White Sugar Futures

Cocoa: New York and London both closed higher and chart patterns now look down. The main crop harvest has started in Nigeria and will soon spread to Ivory Coast and Ghana. Demand should improve as the Covid vaccinations get administered and as at least some governments around the world invest in fiscal stimulus on their economies. Production appears to be good this year and the supply surplus is growing. 

Weekly New York Cocoa Futures

Weekly London Cocoa Futures

(Featured image by Erbs55 via Pixabay)

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Jack Scoville is a futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. In addition to writing daily market commentaries in both English and Spanish, he offers brokerage services to an international clientele of agricultural producers, processors, exporters, and other professional traders. He is regularly quoted by major wire services including Dow Jones, AP, and Reuters. His comments are sourced by newspapers around the world and on various radio and television programs.