By Joe Hoppe
A roundup of key agricultural commodity markets for the week starting Nov. 18 by Dow Jones Newswires in Barcelona.
GRAINS & OILSEEDS: The mood is bearish for agricultural commodity markets as the dollar climbed in the wake of the U.S. election and markets enter a risk-off mode.
The stronger dollar after Trump's victory is weighing on dollar-backed commodities and agricultural currencies like the Brazilian real and the Chinese yuan. Traders will spend now until Trump's January inauguration looking for cabinet picks and confirmations, as well as policy specifics, including on tariffs, taxes, labor and fiscal issues.
The markets also entered a risk-off mood toward the end of last week, with investors still betting on so-called "Trump Trades" including long bets on the dollar. This risk-off mood was exacerbated by hawkish comments from the Federal Reserve on the prospect of monetary policy easing.
U.S. export demand has been mixed as a scramble by traders racing to lock in cargos ahead of Trump's expected tariffs began to show signs of decelerating, Peak Trading analysts said in a note. Corn and soybean export sales dropped sharply last week, and there were no new flash sales reported as of Friday.
Meanwhile, South American weather looks ideal for crops, with planting wrapping up in Brazil. The country will get more widespread rains this week. Meanwhile Argentina is drier, but should see rains return over the weekend, Peak Trading wrote.
Seasonal prices tend to be bearish in November, particularly for the grain and sugar markets, before turning bullish in December due to the festive period.
Chicago wheat futures are up 2.3% at $5.49 a bushel on Monday, while corn is up 0.8% at $4.28 a bushel. Soybean prices are broadly flat on $9.98 a bushel.
SOFT COMMODITIES: Agricultural softs have given a broadly strong performance over the past week, with cocoa, coffee and sugar recording gains. Prices remain elevated on adverse conditions in key markets, according to market watchers.
Cocoa prices have recently been volatile, swinging between daily gains and losses, but are still up more than 15% on week and nearly 97% on year. Both coffee and cocoa have posted cumulative gains since the U.S. election, as production concerns and tight supplies have more than offset a strong greenback, BMI analysts say in a note.
Unfavorable weather conditions have driven much of the supply crunch, with below-average rainfall and above average temperatures in powerhouse producer region West Africa driving much of the bullish action, BMI adds.
On Monday, cocoa is down 1% at $8,229 a metric ton, while coffee is down 0.8% at $2.81 a pound. Sugar is up 2.3% at 22 cents a pound.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
November 18, 2024 12:29 ET (17:29 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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