A roundup of key agricultural commodity markets for the week of August 30-September 2 by Dow Jones Newswires in London.


GRAINS & OILSEEDS

Grains and oilseeds markets are continuing to see diverging forces this week, with rhetoric from the Federal Reserve adding pressure to commodity markets, while poor weather and a new Ukrainian offensive provides support to prices.

Wheat prices moved to a seven-week high on Tuesday after Ukraine looked to launch a counter offensive in the country's south adding to fears about wheat supply. This comes on top of poor weather in Europe and the U.S. for corn growing with estimates continuing to drop.

The U.K.'s Agriculture and Horticulture Development Board noted that Ukraine's "winter wheat sowing for harvest 2023 is expected to fall by at least 20% on the year (from harvest 2022), to around 3.8 million hectares."

However, the Federal Reserve's efforts to tackle inflation is a major risk to commodities and other risk assets, according to Dave Whitcomb at Peak Trading Research. "Powell's hawkishness is a red flag heading into September," he said in a note.

The report on food prices from the United Nation's Food and Agriculture Organization is due later this week - a set of figures that have been closely watched since the outbreak of the war.

Chicago-wheat futures are 0.8% lower to $8.36 a bushel on Tuesday. Corn was down 1% to $6.77 a bushel.


SOFT COMMODITIES

A stronger Brazilian real is the main bright spot for soft commodities with Peak Trading Research noting a strong correlation between it and agriculture markets. Traditionally it has aided Brazilian sugar and coffee farmers.

That said, the macro picture remains generally weak with Whitcomb noting robusta coffee positions could be liquidated by hedge funds if conditions worsen. "White Sugar, Soybean Meal, and Robusta Coffee are the most expensive and overbought agriculture futures markets and most vulnerable to long liquidation if the macro mood deteriorates further."

Prices for coffee in New York were flat at $2.37 a pound on Tuesday, raw sugar was down 0.7% to $0.18 a pound while cocoa was up 0.1% to $2,413 a metric ton


Write to Yusuf Khan at yusuf.khan@wsj.com


(END) Dow Jones Newswires

08-30-22 1038ET