By Joe Hoppe
A roundup of key agricultural commodity markets for the week starting Nov. 25 by Dow Jones Newswires in Barcelona.
GRAINS & OILSEEDS: The mood is mixed for agricultural commodity markets as the dollar stays strong in the wake of the U.S. election.
The stronger dollar after Trump's victory is putting pressure on dollar-backed commodities and agricultural currencies like the Brazilian real and the Chinese yuan, weighing on investor sentiment.
Markets also remained in a relatively risk-off mood, with investors still betting on so-called "Trump Trades" including long bets on the dollar. This was exacerbated by hawkish comments from the Federal Reserve on the prospect of monetary policy easing.
U.S. corn export demand is strong, a bright spot for the wider grain complex, Peak Trading analysts said in a note. Last week's export sales statistics were above expectations for corn, wheat and soybeans, with a few flash sales reported. That said, there are some continued cooling signs and Chinese buying appears more speculative than forced, Peak Trading said.
Black Sea wheat prices have also remained weak despite intensifying geopolitical concerns, with both Russian and Ukrainian wheat offers dropping over the past week.
Meanwhile, South American weather looks favorable. Brazil will see widespread rains over both the north and south through the end of the month, while Argentina is maintaining a pattern ideal for planting, Peak Trading wrote.
Seasonal prices tend to be mixed toward the end of November, particularly for the grain and sugar markets, before turning bullish in December due to the festive period.
Chicago wheat futures are down 2.1% at $5.53 a bushel on Monday, while corn is down 0.4% at $4.34 a bushel. Soybean prices are up 0.2% on $9.86 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 8.5% on week and more-than-double on year. Cocoa prices are continuing to benefit from supply concerns and relatively robust demand, with further risks tilted to the upside in the next two-three months, Citi analysts said in a note.
Both the main crop and mid-crop for cocoa are poor in major producers Ghana and Ivory Coast. While production is ramping up globally, there are concerns around the near-term availability of supplies amid historically low inventories, and prices could spike further, Citi added.
On Monday, cocoa is down 0.5% at $9,036 a metric ton, while coffee is up 1.4% at $3.07 a pound. Sugar is down 1% at 21 cents a pound.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
November 25, 2024 12:25 ET (17:25 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments