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
UPDATE 4-U.S. says to slap tariffs on extra $200 bln of Chinese imports – Reuters
10-Jul-2018 08:22:49 PM
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Adds products on list, China Daily reaction
By Eric Beech
WASHINGTON, July 10 (Reuters) – The Trump administration raised the stakes in its trade war with China on Tuesday, saying it would slap 10 percent tariffs on an extra $200 billion worth of Chinese imports.
U.S. officials released a list of thousands of Chinese imports the administration wants to hit with the tariffs, including hundreds of food products as well as tobacco, chemicals, coal, steel and aluminum.
It also includes consumer goods ranging from car tires, , furniture, wood products, handbags and suitcases, to dog and cat food, baseball gloves, carpets, doors, bicycles, skis, golf bags, toilet paper and beauty products.
General Comments: Cotton was higher again yesterday as the weather forecasts keep calling for hot and dry conditions in the Southern and western Great Plains. US crop conditions are fading, but demand prospects are not as good as they were a couple of months ago because of the tariff war with China. Planted area was increased despite bad weather in West Texas, so production ideas are higher. Wire reports indicate that tariffs against US Cotton have forced buyers in China to look to India. Forward sales have increased and prices there have held firm. The US would have been the primary source, now India and other countries are doing the selling. Crop conditions are improved as the Southeast has been a little drier. Texas now is hot and dry again. The weather is improving in India and China as monsoon rains are reported in India and as China has turned drier. The monsoon has started in southern and central India and rains are now moving into northwest India and Pakistan
Overnight News: The Delta and the Southeast will get showers mostly near coastal areas today. Most areas will see light to moderate showers by the end of the week. Temperatures should be above normal. Texas will see mostly dry conditions. Temperatures will be above too much above normal. The USDA average price is now 83.93 ct/lb. ICE said that certified stocks are now 32,987 bales, from 33,604 bales yesterday. ICE said that 14 delivery notices were posted against July contracts today and that total deliveries are now 715 contracts.
Chart Trends: Trends in Cotton are mixed to up with objectives of 9000 and 9450 December. Support is at 8500, 8420, and 8340 December, with resistance of 8710, 8840, and 9000 December.
Wire: Bloomberg News (BN) Date: Jul 9 2018 12:45:00
Cotton Production, Inventory Survey Before USDA WASDE Report
By Dominic Carey
(Bloomberg) — The following table shows results of a Bloomberg News survey
of as many as eight analysts for the USDA’s World Agricultural Supply and Demand
report on the 2018-19 cotton crop, which is scheduled for release at noon in
Washington on July 12. Figures are in millions of bales.
2018-19:| Avg | Low | High | June
US Production | 19.60| 18.60| 20.10| 19.50
US Exports | 15.41| 15.00| 16.00| 15.50
US End Stocks | 4.78| 4.10| 5.50| 4.70
World Production | 120.01| 118.50| 121.00| 120.40
World Consumption | 125.24| 124.50| 126.00| 125.35
World End Stocks | 82.79| 81.50| 84.00| 83.02
| | | End
Estimates: | Production | Exports |Stocks | Production | Consumption |Stocks
Doane | 19.30| 15.50| 4.10| 119.50| 126.00| 81.50
Love | | | | | |
Consulting | 19.70| 15.00| 5.50| 121.00| 125.70| 83.50
Price Futures| | | | | |
Group | 20.10| 15.20| 5.20|n/a |n/a |n/a
Rabobank | 19.90| 16.00| 4.50| 119.60| 124.90| 82.50
Rose | | | | | |
Consulting | 18.60| 15.00| 4.40| 118.50| 124.50| 82.21
Texas A&M; | | | | | |
Robinson | 19.57| 15.50| 4.80| 120.00| 125.35| 82.62
Varner Bros. | 20.00| 15.50| 5.20| 121.00| 125.00| 84.00
Wedbush | | | | | |
Securities | 19.60| 15.60| 4.50| 120.50| 125.25| 83.20
SOURCE: Bloomberg News
To contact the reporter on this story:
Dominic Carey in Washington at firstname.lastname@example.org
To contact the editors responsible for this story:
Alex Tanzi at email@example.com
Copyright (c) 2018, Bloomberg, L. P.
################################ END OF STORY 1 ##############################
General Comments: FCOJ was lower yesterday as the tropical waves started to turn away from Florida. There is nothing in the Atlantic to cause any concern for crops right now. Florida weather remains good and demand prospects remain poor, especially with the potential for lost Business with the EU. The tariff wars between the US and the EU are hurting export demand ideas. The EU imports a lot of FCOJ and these exports will most likely be hurt due to retaliation that will be made by Europe that included increased tariffs on US FCOJ. The growing conditions in Florida should remain good as the rainy season appears to be underway. Florida producers are seeing good-sized fruit, and work in groves maintenance is active. Irrigation is being used. Brazil could use more rain as Sao Paulo has been hot and mostly dry. The harvest there is active.
Overnight News: Florida should get scattered showers each day. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to above normal temperatures. ICE said that 0 delivery notices were posted against July contracts this morning and that total deliveries are now 114 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 176.00 September. Support is at 165.00, 163.00, and 160.00 September, with resistance at 170.00, 171.00, and 172.00 September.
General Comments Futures were a little lower in New York and a little higher in London. London was the stronger market on concerns about the potential Vietnamese production. It has been dry there and the cherries could be hurt. Either way, there is not much Robusta on offer in the world markets right now even though supplies in storage in Europe are very high. Brazil weather remains good for harvesting and as production is thought to be very big. The harvest is now about half over. IBGE showed increased production potential in its estimates yesterday. London is still in a trading range on ideas of good world availability of Robusta, but producers there have been reluctant to offer. It has been dry in Vietnam, and there is little on offer from that origin as producers want to see how big the next crop will be and try to wait for higher prices. Robusta offers from Vietnam are still down and traders say internal supplies are tight due to a smaller than expected harvest last year. It remains mostly dry in Arabica areas of Brazil, and there is no rain in the forecast for the next week. Origin is still offering in Central America and is still finding weak differentials.
Overnight News: Certified stocks are unchanged today and are about 2.045 million bags. The ICO composite price is now 109.46 ct/lb. Brazil will get mostly dry conditions. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get showers. ICE said that 2 delivery notices were posted in New York and that total deliveries for the month are now 1,259 contracts.
Chart Trends: Trends in New York are mixed. Support is at 112.00, 109.00, and 107.00 September, and resistance is at 115.00, 118.00 and 119.00 September. Trends in London are mixed. Support is at 1660, 1640, and 1610 September, and resistance is at 1710, 1730, and 1750 September.
IBGE Increases Brazil Coffee Crop Estimate by 0.4%
CoffeeNetwork (New York) – Brazil’s Institute of Geography and Statistics (IBGE) has forecast production for Brazil’s 2018-2019 crop at a record 57.3 million bags of 60 kg, an increase of 0.4% from their previous estimate of 57.1 million bags. The average yield increased by 1.4% due to beneficial climatic conditions.
Arabica production is pegged at 43.2 million bags, down 0.5% from their previous estimate of 43.4 million bags, but also still representing a record crop.
Conilon production is now forecast at 14.1 million bags, up 3.2% from the previous estimate of 13.7 million bags. The average yield for the crop increased 5% from the previous estimate.
Espírito Santo, the largest Brazilian producer of conillon (64.9% of the total to be harvested in the country), increased its production estimate by 5.0% in relation to the previous month, now pegged at 9.2 million bags. The average yield of 2,119 kg / ha increased by 7.8%. In relation to 2017, the production estimate is 24.5% higher, with the average yield 24.3% higher.
General Comments: Futures were a little higher in New York and in quiet trading. An attempt to push prices lower failed, but there was no real interest seen in buying the market for a move to the upside. Ideas of big world production are keeping the speculators from buying. Traders note dry conditions in Brazil, the EU, and Russia, but also note very good conditions in Thailand and India. Brazil producers are also worried about Cane production even with the rapid early harvest. However, there is still a lot of Sugar in the world and the futures price action implies that there is enough movement right now to keep the market well supplied. The dry weather in much of Europe and in southern Russia near the Black Sea has hurt Sugar beets production potential in these areas. India is exporting Sugar again and has a large surplus to move. China has reached a deal to buy at least part of the Indian surplus, so hopes are that India will not offer as much into the world market. However, a potential source of big demand might also be lost. Conditions have improved in the last couple of weeks as monsoon rains have arrived. Thailand has produced a record crop and is selling.
Overnight News: Brazil will get dry weather. Temperatures should be near to below normal this week and near to above normal this weekend.
Chart Trends: Trends in New York are mixed to down with objectives of 1090 October. Support is at 1120, 1090, and 1060 October, and resistance is at 1180, 1200, and 1250 October. Trends in London are mixed. Support is at 326.00, 323.00, and 317.00 October, and resistance is at 336.00, 340.00, and 346.00 October.
DJ Brazil Center-South Sugar Crush Down 5.1% at 45.3M Tons in 2 H June – Unica
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the second half of June compared with a year earlier, according to industry group Unica.
Center-south mills crushed 45.3 million metric tons of cane in the period, a decrease of 5.1% from the same period a year earlier. They produced 2.3 million tons of sugar, down 23.7%, and made 2.4 billion liters of ethanol, an increase of 30.4%.
The production mix for the second half of last month was 37.7% sugar to 62.3% ethanol. A year earlier, the mix was 50.5% sugar and 49.5% ethanol.
Brazil is the world’s biggest sugar producer and exporter, and the center-south grows about 90% of the country’s cane. Low sugar prices on world markets have pushed Brazilian producers to favor production of ethanol, which most cars in the country can run on in pure form or mixed into gasoline.
In the season from April 1 through July 1, mills in the region crushed 222.6 million tons of cane, up 11.6% from the same period a year earlier. Sugar production fell 12.1% to 9.7 million tons, and ethanol output rose 45% to 11.1 billion liters.
The production mix for the season through July 1 was 35.6% sugar to 64.4% ethanol. A year earlier, the mix was 47.4% sugar and 52.6% ethanol.
General Comments futures were higher in both markets yesterday. Trends are trying to turn up in both markets, but the selling has been too strong at resistance levels so far. Bullish traders will be poised to try to punch through resistance in the next couple of days and should have enough strength from the chart patters to get the job done. The outlook for strong production in the coming year has been enough to keep the prices in a short-term range. Ideas that current weather conditions are good for crops in West Africa continue to circulate. There have been reports of good rains throughout the region and big yields are possible. There are still some concerns about demand as consumers are looking for healthier products to consume in many cases and as the world economy is still an issue. Showers and more seasonal temperatures have been seen in the last few weeks to improve overall production conditions in West Africa. Conditions also appear good in East Africa and Asia.
Overnight News: Scattered showers are expected in West Africa, but most main areas will be dry. Temperatures will average near to above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 4.850 million bags. ICE said that 6 notices were posted against July contracts and that total deliveries for the month are now 132 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 2680 and 2900 September. Support is at 2400, 2380, and 2340 September, with resistance at 2540, 2560, and 2590 September. Trends in London are mixed. Support is at 1770, 1740, and 1710 September, with resistance at 1850, 1900, and 1920 September.