Agricultural Commodity Markets - Weekly Roundup
By Giulia Petroni
Here is a summary of the agricultural commodity markets for the week of January 15-19, brought to you by Dow Jones Newswires in Barcelona.
Grains & Oilseeds
This week, investors are closely watching global grain markets, with a focus on weather forecasts in South America, conflicts in the Black Sea and Red Sea regions, and the state of the global economy.
Analysts note that grain and oilseed markets have reacted to bearish reports released by the U.S. Department of Agriculture on Friday. The final crop year production numbers have had a largely negative impact, especially considering the better South American weather and soft demand, according to Peak Trading Research.
Fortunately, weather conditions in South America have improved over the past month, setting a positive tone for Brazil's upcoming harvest window. Investors are eagerly awaiting early harvest yield reports in the coming weeks.
However, corn and soy prices have declined due to rising U.S. production estimates surpassing demand growth, says Rabobank's analyst Michael Magdovitz. He also mentions that U.S. farmers are unhappy with low prices, which could lead to reduced acreage in corn and wheat by 2024. Despite this, funds remain heavily short positioned as they anticipate growing or sufficient stockpiles.
As of Tuesday, Chicago wheat futures are 0.2% higher at $5.97 a bushel, corn is down 0.5% at $4.45 a bushel, and soybeans are up 0.7% at $12.33 a bushel.
Soft Commodities
Analysts suggest that soft commodity markets continue to be influenced by supply concerns.
Sugar prices remain approximately 15% lower than early December due to robust Brazilian export volumes and India's decision to direct ethanol producers to stop using sugar cane syrup in an effort to stabilize price inflation, as reported by BMI research.
On the other hand, cocoa prices are being supported by weather-related supply concerns in West Africa.
As of Tuesday, coffee is up 2.6% at $1.85 a pound, cocoa is up 0.9% at $4,360 a metric ton, and sugar is 2.7% higher at $0.22 a pound.
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