By Joe Hoppe
A roundup of key agricultural commodity markets for the week starting Oct. 28 by Dow Jones Newswires in Barcelona.
GRAINS & OILSEEDS: The macro mood is mixed, as the market settles into wait-and-see mode ahead of an extremely close U.S. presidential election and several crucial economic data releases.
The U.S. dollar is stronger, weighing on key commodity currencies like the Brazilian real and hampering U.S. soybean competitiveness during a peak export window, Peak Trading Research analysts said in a note.
Most macroeconomic indices are trading sideways ahead of the presidential election. This week will see Personal Consumption Expenditure data released on Thursday, the Federal Reserve's preferred inflation metric, and Nonfarm Payroll data on Friday. Softer inflation and fewer new jobs would drive the U.S. dollar lower and boost U.S. export competitiveness.
Elsewhere a record-fast U.S. harvest is wrapping up with the soybean harvest effectively finished and corn close behind. Farmer selling has slowed waiting for prices to catch up while cash markets are firmer, Peak Trading said.
In South America, Brazil weather forecasts show more widespread rains again this week, which will help restore ground moisture and accelerate planting.
October is usually the most bullish time of year for agricultural futures, but prices are lower on-month. This reflects dry Brazil weather and Chinese fiscal stimulus pulling seasonally bullish attitudes forward to September, Peak Trading said.
Chicago wheat futures are down 1.2% at $5.62 a bushel on Monday, while corn is down 1% on $4.11 a bushel. Soybean prices are down 0.9% at $9.89 a bushel.
SOFT COMMODITIES: Agricultural softs have broadly fallen over the past week, though prices still remain elevated on adverse conditions in key markets, like the U.S. for cotton and Brazil for coffee and sugar, according to market watchers.
Cocoa prices are up 65% year to date but are down 17% on the month, while coffee is up more than 33% year to date and is down 6.5% on the month.
In the near term, the European Commission's decision to potentially postpone the application of the EU Deforestation Regulation, subject to approval from the European Parliament and Council, could see related soft commodities, such as cocoa and coffee, facing headwinds, according to BMI, a unit of Fitch Solutions.
If confirmed, the decision would give producing countries more time to adjust supply-chain processes and comply with the regulation, reducing the risk of supply crunches.
Sugar has gained over the last week, as drought in Brazil reduced milling volumes in the final stages of the current season and could prompt a slow start to the season ahead, BMI said.
On Monday, cocoa is down 0.3% on $6,897 a metric ton, while coffee is up 1.4% at $2.52 a pound. Sugar is down 0.7% at 22 cents a pound.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
October 28, 2024 13:29 ET (17:29 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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