By Joe Hoppe
A roundup of key agricultural commodity markets for the week starting Dec. 9 by Dow Jones Newswires in Barcelona.
GRAINS & OILSEEDS: The mood is mixed for agricultural commodity markets ahead of key U.S. economic data.
Markets will be focused on U.S. economic data this week, particularly Wednesday's Consumer Price Index data. If it comes in firmer than expected, a December interest rate cut could be taken off the table by the U.S. Federal Reserve and the dollar will strengthen. This would put pressure on dollar-backed commodities and agricultural currencies like the Brazilian real and the Chinese yuan, weighing on investor sentiment.
U.S. corn export demand is overall strong, standing at 1.7 million metric tons in the week ended Dec. 6 and primarily driven by Mexican buyers, Peak Trading analysts said in a note. Soybean export sales stood at 2.3 million metric tons last week with continued Chinese buying, Peak Trading said. The spot demand numbers are strong, but are unlikely to last beyond February as Brazil's harvest begins and given concerns around the possibility of new tariffs under the Trump administration.
Meanwhile, South American weather looks favorable. Northern Brazil expects welcome dry conditions early in the week, followed by rains, while southern Brazil is set to dry out from heavy rains over the weekend, Peak Trading wrote. Argentina will see some scattered storms across core production areas with moderate temperatures. The South American production window begins in mid-December.
Seasonal prices tend to be mixed in early December, particularly for the grain and sugar markets, before turning bullish mid-month due to the festive period and investors searching for inflation hedges for the new calendar year.
Chicago wheat futures are up 0.7% at $5.61 a bushel on Monday, while corn is up 0.2% at $4.41 a bushel. Soybean prices are down 0.7% at $9.87 a bushel.
SOFT COMMODITIES: Agricultural softs have broadly risen in the week-to-date. Prices remain elevated on adverse conditions in key markets, according to market watchers.
Coffee prices have risen on supply-side concerns given late rains and high temperatures in major producing countries. The market remains highly responsive to any weather-related developments in Brazil, and supply concerns are likely to continue to support prices throughout the first half of 2025, analysts at BMI said in a note.
Cocoa prices have recently been volatile, swinging between daily gains and losses, but are still up 7.2% on week and more-than-double on year. Arabica coffee recorded a 47-year high in late November on Brazilian production concerns. Coffee sits up 12% on-week and up more than 87% on-year.
On Monday, cocoa is up 2.2% at $10,066 a metric ton, while coffee is up 0.6% at $3.32 a pound. Sugar is down 1.8% at 21 cents a pound.
Write to Joe Hoppe at joseph.hoppe@wsj.com
(END) Dow Jones Newswires
December 09, 2024 12:17 ET (17:17 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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