Food prices saw their fastest increase in 18 months in September, with the prices of all commodity groups rising, led by sugar, the Food and Agriculture Organization of the United Nations said.
The FAO’s food price index, which tracks global prices for a basket of staple foods, averaged 124.4 points in September, up 3.0% from August and 2.1% higher on year. The index increased at the fastest on-month rate since March 2022. In August, food prices stood at 120.7 points.Sugar prices rose 10.4% in September, driven by falling Brazilian crop prospects on prolonged dry weather and fires in August, and worries that India’s decision to lift ethanol production restrictions on sugarcane could hit export availabilities.
Cereal prices rose 3% on higher wheat and corn export prices. International wheat price increases largely reflect concerns of excessively wet conditions in Canada and the European Union, albeit partially offset by competitively priced supplies from the Black Sea region. Corn price increases rose as water levels were low on key transportation routes along the Madeira River in Brazil and the Mississippi River in the U.S. Rice, conversely, fell 0.7% on quiet trading.
Dairy prices rose 3.8% in September, reflecting higher prices for whole milk powder, skim milk powder, butter and cheese. Meat prices rose 0.4% on month, mainly on higher poultry meat prices as import demand remains strong for Brazilian products. Bovine and pig meat prices stayed stable, while ovine meat prices declined slightly on-month.
Vegetable-oil prices rose 4.6% with the price of palm, soy, sunflower and rapeseed oils jumping on lower-than-expected production in major South East Asian producing countries, and a rebound in soybean oil prices on lower-than-expected crushings in the U.S.
WHEAT
General Comments: All three markets closed lower yesterday on reports of profit taking from speculators even as the dry weather outlook continues for Russia. The export sales report showed moderate sales. At least two Wheat producing regions have declared a state of emergency for Wheat producers due to a lack of rain. World prices were higher amid weather problems here in the US and around the globe. Ideas are that the Great Plains are too hot and dry for best Wheat development are still around as the Winter crop gets planted. It is also hot and dry in western Canada. Cash markets in Russia were higher as production estimates remain lower and two regions have now declared a farming emergency due to the hot and dry weather. Ideas of good crops just harvested in the US and Canada went against reports of dry weather in eastern Europe and Russia and too wet weather in France and Germany along with Spring Wheat areas of Russia are still heard and the weather there affecting world production estimates.
RICE
General Comments: Rice closed higher despite news of lower Asian prices after India opened up exports for non Basmati White Rice. A hurricane came late in the week in the southern US and hit rice areas in the northern Delta with a lot of wind and rain. Another is forming in the Atlantic but it is appears likely to miss the US. Yet another system is trying to form in the Gulf of Mexico that could present a threat to whatever remains unharvested in the Delta and Mid South. There was concern to damage to unharvested crops in the region. The US weather has been an issue much of the growing season with too much rain early in the year. Some areas are now too hot and dry, especially in Texas, and Texas yields are down as the harvest is now over in the state.
Overnight News:
Chart Analysis: Trends are mixed. Support is at 1503, 1489, and 1479 November and resistance is at 1540, 1557, and 1562 November.
CORN AND OATS
General Comments: Corn and Oats closed lower on apparent profit taking. The weekly export sales report was strong. It remains dry in the Midwest, and there are now forecasts for dry conditions and cooler temperatures in the Midwest. Ideas are that the production data will be the biggest seen all year due to the dry August and September in most of the Midwest. Producers plan to hold new crop supplies in hopes for higher prices. Ideas of very strong yields are still heard and harvest is under way. Yield reports heard so far show strong production potential for the national crop. Increased US demand comes from the fact that Corn prices are already the cheapest in the world. Current forecasts call for drier weather for the Midwest for the week or longer to hurt kernel fill and ear weights.
Overnight News: Unknown destinations bought 198,000 tons of US Corn.
Chart Analysis: Trends in Corn are up. Support is at 418, 415, and 409 December, and resistance is at 434, 441, and 458 September. Trends in Oats are up. Support is at 378, 374, and 357 December, and resistance is at 395, 404, and 410 December
SOYBEANS
General Comments: Soybeans and Soybean Meal were lower yesterday as China was closed for the week due to a holiday and the port strike in the US interrupting shipments from the East Coast and Gulf Coast. The weekly export sales report was strong. Soybean Oil closed higher. Warm and dry weather in the Midwest recently has hurt production ideas due to ideas of small beans in the pods although there have been spotty showers more recently. Dry weather has returned this week and will last into next week. Ideas are that the production reports are the biggest that will be seen this year. There is concern about the dry weather seen in the Midwest could hurt pod fill. Ideas are that the beans could be smaller in the pods, but this will not be seen in this report that will include mainly pod counts. Bean sizes will be measured in subsequent months. Central and northern Brazil has also been dry and reports indicate that soil moisture levels are at 30 year lows. Soils are in much better shape in southern Brazil and Argentina. There are some forecasts for showers to return to central and northern areas in a couple of weeks. Reports indicate that China is buying a lot in the US but the country has been on holiday this week so no new demand is expected. China will be back to work next week.
Overnight News: China bought 116,000 tons of US Soybeans.
Analysis: Trends in Soybeans are mixed to up. Support is at 1031, 1018, and 1002 November, and resistance is at 1052, 1070, and 1082 November. Trends in Soybean Meal are mixed. Support is at 332.00, 329.00, and 322.00 December, and resistance is at 339.00, 351.00, and 355.00 December. Trends in Soybean Oil are mixed. Support is at 4310, 4190, and 4140 December, with resistance at 4520, 4560, and 4670 December.
PALM OIL AND CANOLA
General Comments: Palm Oil was higher today along wizth the rally in Soybean Oil. The production could be reduced by flooding that can keep workers from the fields. Demand has held together despite India increasing import taxes on Palm Oil. Canola was higher yesterday in part on a weaker Canadian Dollar against the US Dollar. The weather has been hot and dry in Canada and it looks like Canola production has been impacted. The weather has called for dry conditions in the Prairies and yields are expected to be the same or less. Demand concern remain at the forefront with less demand expected from China with that country now in a trade war with Canada.
Overnight News:
Chart Analysis: Trends in Canola are mixed to up. Support is at 606.00, 596.00, and 588.00 November, with resistance at 638.00, 648.00, and 664.00 November. Trends in Palm Oil are mixed. Support is at 4040, 3990, and 3950 December, with resistance at 4260, 4320, and 4380 December.More By This Author:Softs Report – Thursday, Oct. 3Grains Report – Wednesday, Oct. 2Softs Report – Tuesday, Oct. 1
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