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
ADM InvestorServices @TradeADMIS 9m9 minutes ago
#StockIndexFutures advanced after US lawmakers reached a tentative deal to avert another partial govt #shutdown. In addition, there was support US & China expressed optimism about ongoing #tradetalks.
General Comments: Cotton was lower and trends are down on the daily charts. Funds were the best sellers and were selling based mostly on the stronger US Dollar. The USDA reports on Friday gave no reason to look for big rallies at this time, but the reports were not really that bearish. The weekly export sales reports have started to show improved demand for US Cotton, but new demand from China would be great for the market. China and the US are meeting again this week in hopes of finding a trade agreement. There had been talk of less production from exporter countries like India, but USDA did not reflect these losses in its tables last week. Indian and Pakistani sources will continue to insist that production is less than projected by USDA.
Overnight News: The Delta and Southeast should get precipitation on Thursday and Friday and above normal temperatures. Texas will have mostly dry weather. Temperatures will be mostly above normal. The USDA average price is now 65.98 ct/lb. ICE said that certified stocks are now 127,358 bales, from 127,446 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 6050 March. Support is at 7000, 6970, and 6940 March, with resistance of 7070, 7170, and 7220 March.
DJ On-Call Cotton – Feb 11
As of Feb 11. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
*-denotes changes from the previous week are based on revised data from
Call Previous Change Call Previous Change
Mar 19 23,225 25,754 -2,529 16,729 16,235 494
May 19 21,072 20,933 139 2,366 2,334 32
Jul 19 30,378 30,314 64 2,607 2,605 2
Dec 19 16,737 16,743 -6 18,321 19,860 -1,539
Mar 20 6,326 6,326 0 253 227 26
May 20 2,583 2,583 0 10 0 10
Jul 20 3,017 3,017 0 0 0 0
Dec 20 1,709 1,268 441 3,681 3,681 0
Total 105,047 106,938 -1,891 43,967 44,942 -975
Mar 19 124,355 126,870 -2,515
May 19 40,456 39,088 1,368
Jul 19 26,658 20,434 6,224
Oct 19 10 8 2
Dec 19 33,402 31,922 1,480
Mar 20 2,373 1,851 522
May 20 272 232 40
Jul 20 119 117 2
Dec 20 1,048 1,046 2
Total 228,693 221,568 7,125
General Comments: FCOJ was lower on selling in all ag markets from the funds and as the weather in Florida stays good. Trends are still sideways on the weekly charts. Longer range forecasts show that there is little chance for a freeze to develop this month, and then it will be getting to be too late for a freeze to be seen in the state of Florida. The Oranges harvest is active in Florida as the weather is warm and mostly dry. The fruit is abundant, but arrivals to packing houses and processors are reported behind last year. Florida producers are seeing small-sized to good-sized fruit, and work in groves maintenance is active. Irrigation is being used in all areas. Packing houses are open to process fruit for the fresh market, and all processors are open in the state to take packing house eliminations and fresh fruit. Mostly good conditions are reported in Brazil, and some beneficial rains should be seen this week.
Overnight News: Florida should get mostly dry weather. Temperatures will average above normal. Brazil should get mostly dry weather and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 117.00, 114.00, and 111.00 March, with resistance at 123.00, 124.00, and 126.00 March.
General Comments: Futures were lower again on currency concerns and prices are now in down trends. The funds were the best sellers and sold on news of big Brazilian exports and the sharply higher US Dollar. The Brazil harvest is getting close to done now. Ideas are that the current production of 62 or 63 or more million bags can become about 52 million bags next year. Coffee areas in Brazil could be affected by the current drought that could hurt production even more. Many areas are dry now, but showers are in the forecast for this week. Vietnam is active in its harvest. Selling will likely increase this week as the Lunar New Year holiday is now over. Production in Vietnam is estimated less than 30 million bags due to uneven weather during the growing season. Prices in Vietnam are quoted weaker this week with the Tet holiday now over..
Overnight News: Certified stocks are higher today and are about 2.480 million bags. The ICO composite price is now 100.73 ct/lb. Brazil will get showers today and tomorrow and again this weekend. Temperatures should be above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers or dry conditions. Vietnam will get mostly dry weather.
Chart Trends: Trends in New York are . Support is at 102.00, 100.00, and 99.00 March, and resistance is at 107.00, 110.00 and 112.00 March. Trends in London are mixed to up with objectives of 1600, 1650, and 1670 March. Support is at 1530, 1510, and 1500 March, and resistance is at 1570, 1590, and 1610 March.
DJ Brazil Coffee Exports Surge in January
By Jeffrey T. Lewis
SÃO PAULO–Brazilian coffee exports jumped in January from a year earlier, helped by a big harvest in 2018 that boosted supply and by a rebound in sales abroad of the robusta variety of beans, according to exporters group Cecafe.
The South American country exported 3.3 million 132-pound bags of coffee last month, an increase of 20.8% from the same month a year earlier, Cecafe said Monday.
Sales abroad of the arabica variety of coffee rose 15.5% to 2.9 million bags, while exports of robusta beans rose to 138,537 bags in January, from 12,760 the same month a year earlier.
Brazil is the world’s biggest producer and exporter of coffee, and in 2018 the country’s farmers grew a record 61.7 million bags of the aromatic beans, according to national crop agency Conab.
The agency is forecasting a crop of as much as 54.5 million bags in 2019, which would be the second-biggest harvest in the country’s history. Brazil has a two-year coffee production cycle, in which the crop is bigger in even-numbered years, then smaller in odd-numbered years as the plants “rest.”
Exports of roasted, ground and instant coffee rose 26.7% in January to 238,061 bags, Cecafe said.
General Comments: Both markets moved lower yesterday as the US Dollar moved sharply higher. Trends are now down in both markets/ Funds were the best sellers and sold in almost all agricultural markets. The weekly charts in both markets show mixed trends and the market appears to be searching for a direction at this time. Petroleum futures were also weaker, but this did not seem to support ethanol or Sugar prices. Brazil has been using the majority of its Sugarcane harvest to produce ethanol this year instead of Sugar. Dry conditions continue in northern Brazil and there are frequent rains in Rio Grande do Sul. These weather trends are starting to change as the rains move north into drier areas. Very good conditions are reported in Thailand, but the next production could be less as farmers might switch to other crops due to low prices for Sugarcane.
Overnight News: Brazil will get showers today and tomorrow and again this weekend. Temperatures should be above normal.
Chart Trends: Trends in New York are down with objectives of 1220 and 1170 May. Support is at 1250, 1230, and 1200 May, and resistance is at 1280, 1290, and 1300 May. Trends in London are down with objectives of 335.00 May. Support is at 338.00, 333.00, and 329.00 May, and resistance is at 346.00, 349.00, and 352.00 March.
DJ Brazil Center-South Sugar Crush Up 34% in 2H of January –Unica
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the second half of January compared with a year earlier as the production season nears its end, according to industry group Unica.
The mills crushed 563,000 metric tons of cane in the period, up 34% from a year ago. They produced 5,000 tons of sugar, up 41%, and made 84 million liters of ethanol, an increase of nearly 25%.
The production mix for the second half of last month was 9% sugar to 91% ethanol. A year earlier, the mix was 8.4% sugar and 91.6% ethanol.
Brazil is the world’s biggest sugar producer and exporter, and the center-south region grows about 90% of the country’s cane. Most sugar mills in the region can produce either sugar or ethanol, depending on prices in the market and demand.
In the past year, low sugar prices favored the production of ethanol, as did relatively high gasoline prices at Brazilian filling stations. Most Brazilian cars can run on either gasoline or ethanol, and the country’s drivers will switch from one to the other depending on which is the better value.
In the season from April 1 through Feb. 1, mills in the region crushed 563.3 million tons of cane, down 3.5% from the same period a year earlier. Sugar production fell 26% to 26.4 million tons, and ethanol output rose almost 20% to 30.3 billion liters.
The production mix for the season through Feb. 1 was 35.4% sugar to 64.6% ethanol. A year earlier, the mix was 46.9% sugar and 53.1% ethanol.
General Comments: Futures closed higher yesterday and was one of the few markets to move against the strong up trend in the US Dollar. Funds were quiet in these markets. Nigeria reported Harmattan winds and said its midcrop production might be at risk. Conditions in the rest of West Africa appear to be in good shape. The outlook for strong production in the coming year is still around, and ports are said to have plenty of Cocoa on offer. The main crop harvest is active in West Africa, and Ivory Coast arrivals are strong. Some early week showers and cooler temperatures were beneficial, it is warmer now and mostly dry. Conditions appear good in East Africa and Asia. Demand is said to be improving as offers from the new harvest start to increase. Ivory Coast Cocoa arrivals are now estimated at 1.425 million tons, from about 1.298 million last year.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average above normal. Malaysia and Indonesia should see showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near to above normal temperatures. ICE certified stocks are higher today at 3.793 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2190, 2160, and 2150 March, with resistance at 2250, 2280, and 2300 March. Trends in London are mixed. Support is at 1670, 1650, and 1600 March, with resistance at 1720, 1730, and 1740 March.