By Joe Hoppe


A roundup of key agricultural commodity markets for the week May 28-May 31 by Dow Jones Newswires in Barcelona.


GRAINS & OILSEEDS:


The macroeconomic mood is mixed as crucial commodity currencies weaken.

The U.S. dollar is strong compared to commodity currencies, depressing U.S. export prospects. In particular, the Brazilian real--the world's foremost agriculture exporter currency--and the Chinese yuan, the foremost importer currency, are both experiencing weakness.

The release of Friday of the Personal Consumption Expenditures index, the Federal Reserve's preferred inflation index, will move the dollar if it significantly subverts expectations either way. Investors and the Fed will want to see inflation trend lower, which would drag down the dollar and push agriculture futures markets higher.

U.S. had some storm systems roll through the plains and corn belt over the weekend. Weather forecasts show less activity starting from the middle of the week, extending into June, so farmers will wrap up the spring planting season with near-zero issues and good ground moisture.

Black Sea weather was dry again last week, and extended forecasts point to hot, dry weather continuing into June. Black Sea forecasts will be the main driver for the grains market this week, Peak Trading analysts said in a note.

Seasonal prices historically start to turn more bearish around now, particularly for the wheat and vegetable oil markets as the market crosses the June 1 seasonal high for the agriculture complex. The seasonal high for corn and soybeans follows a week later, on June 8.

Friday's commitment of traders report indicated hedge funds bought soybeans and bean oil, driven by the global weather concerns, slow U.S. planting and firmer cash markets, among other factors. Hedge funds also sold corn, hogs, cotton and sugar.

Chicago wheat futures are up 1.15% at $7.05 a bushel on Monday, while corn is up 0.4% at $4.665 a bushel. Soybeans prices are 0.4% lower at $12.435 a bushel.


SOFT COMMODITIES:


Cocoa prices have plummeted since hitting an all-time high of $11,722 a metric ton on April 19, sparked by a steep rise in margins. Following the swift exit of traders, the lack of liquidity in the cocoa market has left it susceptible to bouts of short-run volatility, BMI said.

Cocoa is down 23% on month, and while weather conditions in West Africa have been improving, the nosedive in prices can't be explained by fundamentals alone, Rabobank analysts said in a note. It is still around 93% higher since the start of the year on supply-side challenges in West Africa, where 70% of global cocoa is produced.

Coffee speculators have also spent the last month shrinking their net long positions in Robusta and Arabica, amid improving weather conditions, exports and growth in certified stocks of the crop, Rabobank says.

Elsewhere, in the sugar market, prices continue a downward trend, based on two consecutive seasons of strong harvest in Brazil. The market will now turn its attention to Asian weather, with elevated temperatures in Thailand, and further market direction expected from the return of the monsoon to India.

Cocoa is down 1.5% at $8,168 a ton, while sugar is 1% higher at 18.6 U.S. cents a pound on Tuesday. Coffee is up 1.15% at $2.21 a pound.


Write to Joe Hoppe at joseph.hoppe@wsj.com


(END) Dow Jones Newswires

05-28-24 0552ET