By Joe Hoppe
A roundup of key agricultural commodity markets for the week June 17-21 by Dow Jones Newswires in Barcelona.
GRAINS & OILSEEDS:
The macroeconomic mood continues its bearish streak, after French political concerns and the weak euro pushed the U.S. dollar higher against key commodity currencies like the Brazilian real, Australian dollar and Canadian dollar.
French stocks and bonds are falling as campaigning kicks off for France's snap parliamentary election, with populist parties on the right and left looking to form alliances. This sent the euro sharply lower and the dollar higher as investors fled to save havens, bearish for agriculture futures.
U.S. extended weather forecasts show a warmer high-pressure ridge moving across the Corn Belt, with heavy storm systems moving through the northwestern section of the belt and the eastern section remaining drier. Extended forecasts show more moderate temperatures into late June, which weighed on new crop corn and soybean futures on Friday, Peak Trading Research analysts said in a note.
Historically, seasonal prices are strongly bearish for grain and oilseed markets from June 8 onwards, and now is usually a very profitable time to short sell grain futures, Peak Trading Research said.
Friday's Commitment of Traders report indicated hedge funds bought a small amount of corn and sugar and sold oilseeds, cotton and hogs. Overall net outflows were small, as fundamentals and macroeconomic signals have been mixed.
Chicago wheat futures are down 2.8% at $5.96 a bushel on Monday, while corn is down 0.7% at $4.47 a bushel. Soybean prices are 1.8% lower at $11.59 a bushel.
SOFT COMMODITIES:
Cocoa prices rose slightly over the last week, consolidating over the $9,000 a ton mark. The crop has been making up ground since its all-time high of $11,722 a metric ton on April 19 was followed by a price crash, sparked by a steep rise in margins, though it gave up gains on Monday.
Following the swift exit of traders, the lack of liquidity in the cocoa market has left it susceptible to bouts of short-run volatility, said BMI Research, a unit of Fitch Solutions. The crop has more-than-doubled in price since the start of the year on supply-side challenges in West Africa, where 70% of global cocoa is produced, hitting a 50-day high on June 12.
El Nino-induced production fears in Vietnam continue to prop up the Robusta coffee market, while traders will also remain sensitive to rainfall and other weather conditions in Brazil in the short term, BMI Research said.
Cocoa is down 5.3% at $9,184 a ton, while sugar is 2.3% lower at 19.1 U.S. cents a pound on Monday. Coffee is up 0.6% at $2.26 a pound.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
June 17, 2024 11:55 ET (15:55 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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