AGS WEEK AHEAD: Mixed Outlook as Dollar Stays Strong, U.S. Weather Looks Good

A roundup of key agricultural commodity markets for the week of July 1-July 5 by Dow Jones Newswires in Barcelona.

By Joe Hoppe

GRAINS & OILSEEDS:

The macroeconomic environment is mixed, with few strong signals.

The dollar is strong against key commodity currencies like the Chinese yuan and the Brazilian real, a bearish sign for agricultural futures.

U.S. weather forecasts look good, with an active rain pattern rolling across the U.S. corn belt this week. Excessive moisture across the north-west corn belt is still a concern, and forecasts skew hotter going into July, but so far weather has been favorable, Peak Trading Research analysts say in a note.

Elsewhere, weather in the Black Sea has turned hot and dry again after a period of poor weather, improving wheat harvest prospects, and U.S. exports are improving.

Analysts at the research firm expect July to be a broadly bearish month for grain and oilseed markets, with traders keeping a close eye on the U.S. nonfarm payrolls data due Friday after the July 4 holiday.

Chicago wheat futures were 2.05% higher at $5.85 a bushel on Monday, while corn was down 0.6% at $4.18 a bushel. Soybeans prices rose 0.2% to $11.06 a bushel.

SOFT COMMODITIES:

Cocoa continues to be highly volatile. The price has fallen more than 8% on week, as deteriorating market liquidity and heavy short-selling exacerbated price moves following favorable weather in major producer Ghana, Rabobank analysts say.

Price changes in the rest of the soft commodities complex have been much more muted.

Friday's commitment of traders report showed the main change among soft commodities was a big reduction in the short selling of sugar by hedge funds, along with continued buying of coffee and slightly less short selling of cotton, Saxo Bank's head of commodity strategy Ole Hansen says in a note.

Cocoa traded 5.6% lower at $7,295 a metric ton, while coffee fell 0.9% to $2.25 a pound. Sugar was broadly flat at $0.20 a pound.

Write to Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

July 01, 2024 11:58 ET (15:58 GMT)

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