Jack Scoville is an often quoted market analyst in the grain and soft commodities sectors. You will find his commentary throughout the Reuters, Wall Street Journal, Dow Jones, Bloomberg, and Barron's publications. Contact Mr. Scoville at (312) 264-4322
Brazil Plunges Back Into Political Crisis as Markets Brace (5)
Temer denies having authorized any obstruction of justice
The allegations are the latest development of Carwash probe
By Samy Adghirni, Mario Sergio Lima and Rachel Gamarski
(Bloomberg) — Brazil was plunged back into a political crisis reminiscent of last year’s impeachment saga following reports that President Michel Temerwas embroiled in an alleged cover-up scheme involving the jailed former speaker of the lower house of Congress.
One of the country’s largest newspapers reported on Wednesday evening that a secret recording exists of Temer approving a payment to Eduardo Cunha, the mastermind behind last year’s impeachment of former president Dilma Rousseff. The tape was submitted to the Supreme Court by two senior executives from meat-packing giant JBS SA as part of a plea bargain deal, according to O Globo newspaper, in which information is offered in exchange for reduced sentences. The paper provided neither a transcript nor a recording.
General Comments: Cotton was lower in July and higher in the new crop months. The charts imply that the current up move is over. It looks like more Cotton has become available to the market as the rally has brought Cotton into the cash market and also into certified stocks. The market anticipates continued good demand for the current crop, but the push to the highs might have hurt demand in the short term. Futures are finding support from mills who sold basis levels but never covered these positions in futures. They are being squeezed now, but wire reports suggest that they are finding ways to get covered. Planting conditions remain mixed due to recent cold and wet weather. Warmer temperatures and more wet weather is expected this week. The overall planting pace was good last week, but the annual planting pace is still behind the five year average. Certified stocks have moved sharply higher in the last month as an indication of increased farm selling and somewhat reduced overall demand.
Overnight News: The Delta and Southeast should get more rain this weekend. Temperatures should will average near to above normal. Texas will see mostly dry weather. Temperatures will be above normal. The USDA average price is now 77.37 ct/lb. ICE certified stocks are now 387,267 bales, from 384,6842 bales yesterday. ICE said that 0 contracts were tendered for delivery for May and that total deliveries for the month are now 735 contracts. USDA said that net Upland Cotton export sales were 120,700 bales this year and 165,100 bales next year. Net Pima sales were 6,500 bales this year and 5,400 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 7970, 7940, and 7900 July, with resistance of 8130, 8220, and 8250 July.
General Comments: FCOJ closed lower and price action remains weak. The daily chart are starting to show a down trend again as futures moved to new lows for the move. The crop is still small, but weak domestic demand is helping keep prices under pressure, as are the expectations of increased imports of FCOJ from Brazil. Domestic production remains very low due to the greening disease and drought. Trees now are showing small fruit. Irrigation is being heavily used to prevent loss as the state is in drought and there are no forecasts for rain for the next week. The Valencia harvest is moving to processors and into the fresh market and is starting to wind down. Brazil crops remain in mostly good condition.
Overnight News: Florida should see mostly dry weather and near to above normal temperatures, Brazil should get mostly dry conditions and near normal temperatures. ICE said that 0 contracts were tendered for May delivery today and that total deliveries for the month are now 26 contracts.
Chart Trends: Trends in FCOJ are down with objectives of 135.00 July. Support is at 139.00, 136.00, and 133.00 May, with resistance at 145.00, 148.00, and 150.00 May.
General Comments: New York and London closed higher. The US Dollar was weaker once again against other currencies including the Real and the weaker Dollar was able to Support futures yesterday. The price action yesterday might have been a reversal. Ideas of better world production were seen once again as many look for stronger crops with coming harvests, and demand ideas remain very soft as most roasters are still not buying much in world cash markets. However, many traders expect little overall increase in world production at this time as the growing conditions in many areas have not been that good. The big shorts in New York are the commercials who apparently are finally closing short positions at least in part as they close positions on Coffee bought at higher prices. They are noted as buying futures at this time, and producers are said to be selling in deferred months. It feels as if some news is needed or increased offers in the cash market are needed to push prices lower. Differentials are stable.
Overnight News: Certified stocks are higher today and are about 1.443 million bags. The ICO composite price is now 126.46 ct/lb. Brazil will get light showers early this week and showers and storms this weekend. Dry weather returns next week Temperatures should average near to above normal. Colombia should get scattered to isolated showers. Central America and southern Mexico should get mostly dry conditions. Temperatures should average near to above normal. ICE said that 0 notices were posted for delivery against May contracts and that total deliveries for the month are 666 contracts.
Chart Trends: Trends in New York are mixed. Support is at 130.00, 128.00, and 125.00 July, and resistance is at 135.00, 138.00 and 140.00 July. Trends in London are mixed. Support is at 1970, 1950, and 1940 July, and resistance is at 2010, 2040, and 2070 July.
• 18-May-2017 08:00:00 AM – BRAZIL’S 2017 COFFEE CROP SEEN AT 45.6 MLN 60-KG BAGS VS RANGE 43.65-47.51 MLN BAGS SEEN IN JAN – CONAB
• 18-May-2017 08:00:00 AM – BRAZIL’S 2017 ARABICA COFFEE CROP SEEN AT 35.4 MLN BAGS VS RANGE 35-37.88 MLN BAGS SEEN IN JAN – CONAB
• 18-May-2017 08:00:00 AM – BRAZIL’S 2017 ROBUSTA COFFEE CROP SEEN AT 10.1 MLN BAGS VS RANGE 8.64-9.63 MLN BAGS SEEN IN JAN – CONAB
• 18-May-2017 08:00:00 AM – BRAZIL’S 2017 TOTAL COFFEE CROP SEEN 11.3 PCT BELOW 2016 AS YIELDS FALL IN OFF-YEAR OF COFFEE’S CYCLE
Brazil’s 2017 coffee crop seen falling 11 pct from 2016 – Conab – Reuters News
18-May-2017 08:14:42 AM
SAO PAULO, May 18 (Reuters) – Brazil’s 2017 total coffee crop is expected to fall 11.3 percent from the production seen in 2016 as agricultural yields fall in most producing regions in the off-year of coffee’s biannual cycle, food supply and statistics agency Conab said on Thursday.
Brazil’s 2017 coffee crop is seen at 45.6 million 60-kg bags versus a range forecast in January between 43.65 million and 47.51 million bags, said Conab.
General Comments: New York and London both closed higher in response to the weaker US Dollar. New York broke out of its recent trading range and could be mounting at least a short term rally. London trends are starting to turn up as well. Ideas are that world Sugar production will be higher as long as Brazil keeps the current percentages of Sugar and Ethanol production. However, the delivery of cane to Brazil mills has been down so far this year. It is very early in the season, and ideas are that the arrivals will improve with time. Ideas are also that India and Thailand will have bigger crops this year after the failed monsoon cut Sugarcane production in both countries last year. The Indian weather Service expects a 96% normal monsoon this year and the government and producers hope for production to recover in a big way in the next production cycle. Brazil could also have better crops this year as rains have been good in Center South areas. It remains much drier than normal in the Northeast, but there has been some rain. Southeast Asia has good growing conditions. Demand remains a question as Raw Sugar futures are leading White Sugar futures higher so far this week.
Overnight News: Brazil will get a few showers this week and big rains this weekend. Temperatures should average near to below normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1675 and 1750 July. Support is at 1600, 1550, and 1530 July, and resistance is at 1630, 1650, and 1700 July. Trends in London are mixed to up with objectives of 457.00 and 474.00 August. Support is at 454.00, 447.00, and 439.00 August, and resistance is at 463.00, 465.00, and 468.00 August.
General Comments: Cocoa futures closed higher and is attempting to complete short term bull flag formation. It needs to make new weekly highs in both New York and London to créate additional buying interest and send prices higher again.. Both New York and London have been reacting to problems with the Army in Ivory Coast, but those concerns are fading and the Cocoa is flowing again. The recovery has come as the West African main crop harvest has ended and the mid crop harvest has started. That makes less supply available to the market, although supplies should still be big enough for any demand at this time. The recovery in demand has been weak so far, but demand is expected to continue to grow in the next few months. Traders look for demand to improve as lower prices filter down to the retail level, but chocolate prices have been holding strong at stores. The fundamentals remain mostly bearish, but are now part of the price. Production is improved this year and demand has not improved as much as hoped, according to the recent EU grind data.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see scattered showers in all areas. Temperatures should average near normal. Brazil will get mostly dry conditions or light showers and near to above normal temperatures. ICE certified stocks are higher today at 5.752 million bags. ICE said that 0 contracts of Cocoa were delivered against May futures, and that total deliveries for the month are 591 contracts.
Chart Trends: Trends in New York are up with objectives of 2150 July. Support is at 1980, 1960, and 1940 July, with resistance at 2070, 2100, and 2130 July. Trends in London are up with objectives of 1710 Juy. Support is at 1540, 1520, and 1490 July, with resistance at 1630, 1650, and 1670 July.
Questions? Ask Jack Scoville today at 312-264-4322
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