About The Author

Jack Scoville

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

COTTON
General Comments: Cotton was lower in reaction to the USDA reports. USDA showed increased demand for the current crop and the next crop, but the trade had wanted to see some very big demand and was not satisfied with the increases shown. The weekly export sales report showed strong demand once again this week. USDA also showed that production might not increase much if at all because of the dry weather in Texas. There are ideas that the US is now running short of high quality Cotton to deliver to the exchange and to overseas buyers. Demand remains strong in export markets as the weekly export sales report showed moderate to strong volumes last week. Chart trends are mixed on daily charts and up on weekly charts. New crop planting is now about the same as the five-year average. The weather in the western Great Plains is showing some improvement as some areas have finally seen some precipitation. However, the precipitation was minimal and not of much benefit to farmers. Forecasts call for mostly dry weather for the next couple of weeks, and producers in the western Great Plains are likely to wait for better rains before planting more Cotton. In contrast, farmers in the Delta and Southeast have seen too much rain and have had delays as soils dry out. The overall planting pace is likely to remain slow.
Overnight News: The Delta and the Southeast will get drier weather through the weekend. Temperatures should be mostly below normal. Texas will see mostly dry conditions until showers return on Sunday. Temperatures will be above normal. The USDA average price is now 80.33 ct/lb. ICE said that certified stocks are now 73,464 bales, from 74,260 bales yesterday. ICE said that there were 0 contracts tendered for delivery today and that total deliveries are now 199 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 8400, 8330, and 8290 July, with resistance of 8600, 8700, and 8750 July.

DJ USDA Supply/Demand: U.S. Cotton – May 10
U.S. Cotton Supply and Use
========================================================================
Item 2017/2018 2018/2019
Apr May 10 Apr May 10
=========================================================================
Area
Million acres
Planted 12.61 12.61 (NA) 13.47 *
Harvested 11.35 11.10 (NA) 11.13 *
Pounds
Yield per harv. acre 889 905 (NA) 841 *
Million 480 pound bales
Beginning stocks 2.75 2.75 (NA) 4.70
Production 21.03 20.92 (NA) 19.50
Imports 0.01 0.01 (NA) 0.01
Supply, total 23.79 23.68 (NA) 24.21
Domestic use 3.35 3.35 (NA) 3.40
Exports 15.00 15.50 (NA) 15.50
Use, total 18.35 18.85 (NA) 18.90
Unaccounted 0.14 0.13 (NA) 0.11
Ending stocks 5.30 4.70 (NA) 5.20
Avg. farm price 67.00-69.00 67.00-69.00 (NA) 55.00-75.00
=========================================================================

DJ USDA Supply/Demand: World Cotton – May 10

World Cotton Supply and Use
(Million 480-pound bales)
=============================================================================
beginning domestic exports ending
stocks prod imports use loss stocks
=============================================================================
2018/19 (Projected)
World
Apr (NA) (NA) (NA) (NA) (NA) (NA) (NA)
May 88.21 121.19 41.12 125.44 41.12 0.22 83.75
United States
Apr (NA) (NA) (NA) (NA) (NA) (NA) (NA)
May 4.70 19.50 0.01 3.40 15.50 0.11 5.20
Total foreign
Apr (NA) (NA) (NA) (NA) (NA) (NA) (NA)
May 83.51 101.69 41.12 122.04 25.62 0.11 78.55
Major exporters
Apr (NA) (NA) (NA) (NA) (NA) (NA) (NA)
May 30.50 55.24 2.14 34.20 21.69 0.02 31.97
Major importers
Apr (NA) (NA) (NA) (NA) (NA) (NA) (NA)
May 51.08 43.40 36.52 83.78 2.69 0.09 44.45
=============================================================================

DJ USDA Supply/Demand: World Cotton – 2
World Cotton Supply and Use (continued)
(Million 480-pound bales)
=============================================================================
beginning domestic exports ending
stocks prod imports use loss stocks
=============================================================================
2017/18 (Estimated)
World 86.92 122.43 39.23 120.74 39.38 0.25 88.21
United States 2.75 20.92 0.01 3.35 15.50 0.13 4.70
Total Foreign 84.17 101.51 39.22 117.39 23.88 0.12 83.51
Major exporters 25.75 55.57 2.41 32.75 20.46 0.02 30.50
Major importers 56.78 42.94 34.36 80.60 2.30 0.10 51.08
2016/17
World 95.00 106.66 37.56 114.76 37.38 0.16 86.92
United States 3.80 17.17 0.01 3.25 14.92 0.06 2.75
Total Foreign 91.20 89.49 37.55 111.51 22.46 0.10 84.17
Major exporters 22.66 50.69 3.63 31.98 19.25 0.01 25.75
Major importers 66.83 35.86 31.78 75.57 2.04 0.09 56.78

=============================================================================

DJ USDA Cotton Ginnings-May 10
Cotton Ginnings: Running Bales Ginned (Excluding Linters)
by Type, State, and United States, Crop Years 2014-2017
================================================================================
Type and
State 2014 2015 2016 2017
=================================================================================
Upland
US 15,330,750 12,112,750 16,160,450 19,764,300
Amer-Pima
US 544,900 416,200 549,550 677,050
All Cotton
US 15,875,650 12,528,950 16,710,000 20,441,350
=============================================================================
Cotton Ginnings: Running Bales Produced and Equivalent 480-Pound
Bales Ginned, by Type, State, and United States, Crop Years 2016-17
=============================================================================
Equivalent 480-Pound
Type Running Bales Produced Bales Ginned
and —————————————————————
State 2016 2017 2016 2017
=============================================================================
Upland
US 16,160,450 19,764,300 16,572,350 20,177,750
Amer-Pima
US 549,550 677,050 568,050 698,900
All Cotton
US 16,710,000 20,441,350 17,140,400 20,876,650

DJ USDA Crop Production: Final U.S. All Cotton – May 10

Cotton: Yield and Production by Type, State,
and United States, 2016-17
====================================================================
Area
Type Planted Harvested Yield
And ============================================================
State 2016 2017 2016 2017 2016 2017
====================================================================
========== 1,000 Acres ======= ===== Pounds ====
Upland
U.S. 9,878.0 12,360.0 9,320.0 10,850.0 855 895
Amer Pima
U.S. 194.5 252.5 187.8 250.4 1,454 1,341
All
U.S. 10,072.5 12,612.5 9,507.8 11,100.4 867 905
=====================================================================

DJ USDA Crop Production: Final U.S. All Cotton – 2
Cotton: Production and Bales Ginned by Type,
State, and United States, 2016-17
============================================================================
Production in Lint- Bales Ginned in
Type 480-lb Net Weight seed 480-lb Net Weight
and Bales 1/ Ratio 2/ Bales 3/
State ================================================================
2016 2017 2016 2017 2016 2017
============================================================================
—- 1,000 Bales — ——– Bales ——–
Upland
U.S. 16,601.0 20,223.0 (NA) (NA) 16,572,350 20,177,750
American-Pima
U.S. 568.9 699.5 (NA) (NA) 568,050 698,900
All
U.S. 17,169.9 20,922.5 (NA) (NA) 17,140,400 20,876,650
============================================================================
(NA) Not available.
1/ Production ginned and to be ginned.
2/ Estimates available only for the 6 States shown.
3/ Equivalent 480-pound net weight bales ginned, not adjusted for cross-state
movement.

Cottonseed: Production and Farm Disposition
by State and United States, 2016-17
==========================================================================
Farm Disposition
———————————– Seed for
Production Sales to Planting 2/
Oil Mills Other 1/
State ==============================================================
2016 2017 2016 2017 2016 2017 2016 2017
==========================================================================
1,000 Tons
U.S. 5,369.0 6,422.0 2,921.0 3,059.0 2,448.0 3,363.0 70.7 76.6
==========================================================================
– Represents zero.
1/ Includes planting seed, feed, exports, inter-farm sales, shrinkage,
losses, and other uses.
2/ Included in “other” farm disposition. Seed for planting is produced
in crop year shown, but used in the following year.

FCOJ
General Comments: FCOJ was higher on reduced production prospects in Brazil along with the reduced US production. It looks like FCOJ is in a weather market as dry conditions are reported in Florida and in production areas of Brazil. Hot temperatures have also been reported in Brazil. The harvest is starting to wind down in some areas of Florida. Some showers are possible late this weekend. The market is still dealing with a short crop against weak demand. The harvest is progressing well and fruit is being delivered to processors. Producers are now into the Valencia crop. Florida producers are seeing marble sized fruit. Conditions are reported as generally good, although most producers would like more rain. Irrigation is being used. Brazil also could use more rain as Sao Paulo has been hot and dry. Generally good conditions are reported in Europe and northern Africa.
Overnight News: Florida should get showers and storms his weekend. Temperatures will average near to below normal. Brazil should get mostly dry weather and near to above normal temperatures. The best precipitation should be this weekend. There have been no deliveries so far in New York against May contracts.
Chart Trends: Trends in FCOJ are up with objectives of 171.00 and 177.00 July. Support is at 165.00, 162.00, and 157.00 July, with resistance at 170.00, 173.00, and 176.00 July.

DJ Orange Juice Rises on Tight Brazilian Forecast — Market Talk
1521 ET – Dry, hot weather in October in Brazil is weighing on this year’s orange crop. Brazil’s Fundecitrus releases its forecast for the 2018/2019 season at 288 million boxes, a 28% drop, a record decline for any given year given last year’s robust crop. The firm estimates that 17% will drop from trees before it is ripe given the dry weather and increased prevalence of an incurable disease called citrus greening. That disease has already decimated Florida’s orange crop which is at its lowest level since the 1940s.

COFFEE
General Comments Futures in New York and London were higher yesterday in rather quiet trading. IBGE once again estimate the Brazil crop near 55 million bags and that news might have supported the market.. News that the Brazilian harvest could start in the next few weeks brought ideas of bigger supplies and less need to chase higher prices for now. Funds and other speculators were net sellers, but traded on both sides of the market. Industry was a net buyer in New York. Origin is still offering in Central America and is still finding weak differentials. The demand has been active, but not willing to chase prices higher. New York traders are talking about good weather currently being reported in Brazil and expect another bumper crop. Robusta remains the stronger market as Vietnamese producers and merchants are not willing to sell at current prices and are willing to wait for a rally. Supplies of Coffee in Europe have been dropping. Wire reports suggest that conditions for the crop are good as the rainy season gets underway. Vietnamese cash prices were steady again last week.
Overnight News: Certified stocks are marginally lower today and are about 1.994 million bags. The ICO composite price is now 112.65 ct/lb. Brazil will get drier conditions until showers appear on Sunday. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get isolated showers or dry conditions. Vietnam will get showers. ICE said that there were 0 deliveries today in New York and that total deliveries for the month are 240 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 115.00 and 111.00 July. Support is at 117.00, 115.00, and 112.00 July, and resistance is at 121.00, 124.00 and 126.00 July. Trends in London are mixed. Support is at 1720, 1700, and 1670 July, and resistance is at 1780, 1810, and 1840 July.

DJ Brazil Exported 2.2 Million Bags of Coffee in April — Cecafe
SAO PAULO–Brazilian coffee exports were unchanged in April from a year earlier as an increase in exports of the robusta variety offset a decline for ground, roasted and instant coffee, according to exporters group Cecafe.
The South American country exported 2.2 million 132-pound bags of coffee last month, the same amount as in the April 2017, Cecafe said Wednesday.
Exports of the arabica variety of coffee fell 0.5% to 1.9 million bags, while exports of robusta beans doubled to 53,472 bags.
Exports of roasted, ground and instant coffee fell 7.1% in April to 258,054 bags, Cecafe said.

SUGAR
General Comments: Futures were slightly lower in range trading. The fundamentals still suggest that lower prices are still coming as analysts remain focused on big world production. USDA showed today that US production is likely to be enough for internal demand and that imports above the quota might not be needed.. There is still big supplies available to the market. Plenty of Sugar will most likely be around, and many analysts support that idea by calling for big production surpluses for this and next year. Reports in the first part of last week that the Brazil season was off to a big start caused the last round of selling interest, and ideas that the market was oversold has caused the recent recovery. India is back to export Sugar this year after being a net importer for the last couple of years. Thailand has produced a record crop and is selling. Brazil still has plenty of Sugar to sell, and even the EU has had over production in the past year. Middle East and North African buyers are reported to be buying normal or less than normal amounts of Sugar in the world market right now.
Overnight News: Brazil will get dry weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1070 and 1010 July. Support is at 1100, 1080, and 1050 July, and resistance is at 1160, 1190, and 1200 July. Trends in London are mixed. Support is at 318.00, 316.00, and 311.00 August, and resistance is at 332.00, 336.00, and 340.00 August.

DJ USDA Supply/Demand: U.S. Sugar – May 10
U.S. Sugar Supply and Use
==============================================================================
Item 2017/2018 2018/2019
Apr May 10 Apr May 10
==============================================================================
1,000 short tons, raw value
Beginning stocks 1,876 1,876 NA 1,901
Production 9,140 9,252 NA 8,981
Beet sugar 5,139 5,221 NA 5,036
Cane sugar 4,001 4,031 NA 3,945
Florida 1,973 1,998 NA 2,085
Hawaii 0 0 NA 0
Louisiana 1,859 1,859 NA 1,680
Texas 170 175 NA 180
Imports 3,472 3,422 NA 3,365
TRQ 1,788 1,788 NA 1,355
Other program 400 350 NA 350
Other 1,284 1,284 NA 1,660
Mexico 1,269 1,269 NA 1,645
Total supply 14,489 14,551 NA 14,247
Exports 150 170 NA 50
Deliveries 12,480 12,480 NA 12,655
Food 12,325 12,325 NA 12,500
Other 155 155 NA 155
Miscellaneous 0 0 NA 0
Total use 12,630 12,650 NA 12,705
Ending stocks 1,859 1,901 NA 1,542
Stocks to use ratio 14.7 15.0 NA 12.1
==============================================================================

DJ Brazil Center-South Sugar Crush Up 55.3%, Production Up 34.8%
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the second half of April compared with a year earlier, according to industry group Unica.
Center-south mills crushed 37.7 million metric tons of cane in the period, an increase of 55.3% from the same period a year earlier. They produced 1.5 million tons of sugar, up 34.8%, and made 1.7 billion liters of ethanol, up 84.7%.
The production mix for the second half of last month was 35.8% sugar to 64.2% ethanol. A year earlier, the mix was 43.1% sugar and 56.9% ethanol.
Brazil is the world’s biggest sugar producer and exporter, and the center-south grows about 90% of the country’s cane.
In the season from April 1 through May 1, mills in the region crushed 59.8 million tons of cane, up 42.7% from the same period a year earlier. Sugar production rose 21.6% to 2.2 million tons, and ethanol output rose 67.7% to 2.7 billion liters.
The production mix for the season through May 1 was 34.3% sugar to 65.7% ethanol. A year earlier, the mix was 41.6% sugar and 58.4% ethanol.

DJ India Production, Exports Will Add to Global Sugar Surplus — Market Talk
0309 GMT – Global sugar prices could come under more pressure as India’s production in the year to Sep. 30 2019 is set to rise and domestic subsidies are likely to encourage an uptick in its exports. The US Department of Agriculture says India’s production is expected to increase 4.2% to 33.8 million tons in 2018/19 and notes that exports in the same period are expected to reach 6 million metric tons, up from exports of 2 million tons in the current year. ICE front month sugar is trading at 11.56 cents per pound.(lucy.craymer@wsj.com)

COCOA
General Comments Futures were mixed. Trends in New York are sideways for now, but it still looks like the market could be making a top. London could be forming a top now as well. Ideas that world production has been largely sold remain part of the rally. Showers and more seasonal temperatures have been seen in the last few weeks to improve overall production conditions in West Africa. The mid crop harvest is starting, and wire reports indicate that some initial mid crop harvest is underway in all countries. Yield estimates imply that variable yields can be expected. The harvest should begin soon in Ivory Coast and Ghana. Certified stocks are increasing in the US as US futures have been so much stronger than London futures.
Overnight News: Scattered showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get cry conditions and near to above normal temperatures. ICE certified stocks are lower today at 5.315 million bags. ICE said that 0 delivery notices were posted against May contracts and that total deliveries for the month are now 185 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2730, 2700, and 2690 July, with resistance at 2800, 2860, and 2900 July. Trends in London are mixed. Support is at 1890, 1850, and 1810 July, with resistance at 1970, 2000, and 2030 July.

DJ No Break Between Mid, Main Cocoa Harvest in Southwest Nigeria -Traders
By Obafemi Oredein
IBADAN, Nigeria–There will be no break between the harvest of the midcrop and the 2018-19 season’s main crop cocoa in southwestern Nigeria, officials and farmers said Wednesday.
“The current midcrop harvest will run into the harvest of the main crop this year,” said Adio Akinyele, a farmer in Ibadan, capital of southwest Oyo state. “The usual break will not occur due to good rainfall that is boosting the development of next season’s main cocoa.”
Harvesting of the midcrop began in the southwest cocoa region in March. It normally ends in July or August, while the harvest of the main crop usually starts in September or October and ends in January or February, Mr. Akinyele said.
“New leaves, flowers and cherelles–tiny cocoa pods–are now on cocoa trees in preparation for the 2018-19 main crop cocoa,” said Mr. Akinyele.
Sayina Riman, president of the Cocoa Association of Nigeria said the country’s main crop will start at least one month ahead of schedule due to the current boon of wet weather in the country’s south, where all the country’s cocoa is cultivated.
He added that the main crop harvest usually starts in September but “if the rain keeps up, we will see early main crop harvest in July or August.”

Questions? Ask Jack Scoville today at 312-264-4322