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
General Comments: Cotton was higher on another strong export sales report from USDA. Speculators appeared to be the best buyers, but some mill buying was also possible. The daily charts show that trends are mixed. There is still talk that the US can continue to have strong sales with other major exporters starting to run low on supplies. US sales suffered in the first part of the marketing year in world markets, but have started to improve as other sellers run out of supplies. There are expectations that Cotton planted area can increase this season as farmers could be attracted to Cotton instead of grains such as Corn or Rice due to relative pricing. Anecdotal reports imply that industry is preparing for more production as new facilities such as gins are being opened. Cotton production is poised to make a comeback in the Delta and Southeast, and the wet weather implies less Corn planted and more Cotton or Soybeans planted. China said it imported 152,242 tons of Cotton in March, up 41.8% from the previous year. Calendar year to date imports are now 661,191 tons, up 92.4% from last year.
Overnight News: The Delta and Southeast should get mostly dry weather. Temperatures should be mostly near to above normal. Texas will have mostly dry weather, then showers on Tuesday. Temperatures will average near normal. The USDA average price is now 72.86 ct/lb. ICE said that certified stocks are now 64,241 bales, from 62,657 bales yesterday. ICE said that 3 notices were posted against contracts for May delivery and that total deliveries for the month are now 196 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 7790, 7700, and 7650 July, with resistance of 7880, 7920, and 7960 July.
DJ On-Call Cotton – Apr 25
As of Apr 18. 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
May 19 4,537 13,445 -8,908 2,471 5,423 -2,952
Jul 19 37,630 33,992 3,638 6,048 5,548 500
Oct 19 0 0 0 0 0 0
Dec 19 32,841 31,314 1,527 32,137 30,442 1,695
Mar 20 14,117 13,341 776 1,982 1,754 228
May 20 5,826 5,543 283 162 162 0
Jul 20 8,025 5,721 2,304 1,098 146 952
Dec 20 5,384 5,961 -577 8,721 7,694 1,027
Mar 21 1,268 916 352 309 309 0
May 21 9 9 0 0 0 0
Jul 21 4 4 0 0 0 0
Total 109,641 110,246 -605 52,928 51,478 1,450
May 19 6,345 22,627 -16,282
Jul 19 99,498 94,479 5,019
Oct 19 47 50 -3
Dec 19 90,056 85,153 4,903
Mar 20 10,517 10,015 502
May 20 829 729 100
Jul 20 1,883 727 1,156
Dec 20 3,956 2,878 1,078
Mar 21 7 7 0
May 21 0 0 0
Jul 21 0 0 0
Total 213,138 216,665 -3,527
General Comments: FCOJ was a little higher after holding recent lows. Trends are down on the daily and weekly charts as the market looks at a big oranges crop and little demand for FCOJ. Inventories inside the state are significantly higher than a year ago. The Oranges harvest remains active in Florida as the new crop begins to develop. Producers are concentrating on harvesting Valencia and harvest progress should be strong. Fruit for the next crop is developing and ideas are that the next crop is off to a very good start. Production is very uniform so far this year and development throughout the state is about equal. Some fruit drop is being reported, but this is normal as the trees move to the next crop and drop the old fruit. Irrigation is being used frequently to help protect crop condition. Mostly good conditions are reported in Brazil.
Overnight News: Florida should get mostly dry weather, but showers are possible today. Temperatures will average mostly above normal. Brazil should get scattered showers late this week and below normal temperatures.
Chart Trends: Trends in FCOJ are down with objectives of 97.00 May. Support is at 100.00, 97.00, and 94.00 May, with resistance at 107.00, 111.00, and 115.00 May.
General Comments: Futures were a little higher in New York in reaction to strength in the Brazilian Real. London was little changed. The trade is still worried about big supplies and low demand. Roasters were scale down buyers on the extended down move and now have more than ample supplies in-house or on the way. Prices are generally below to well below the cost of production for world producers, and prices are getting to that point for producers in Brazil and Vietnam. Ideas are that the next Brazilian crop might still be big as the weather has been good for the trees so far. Mostly dry conditions are in the forecast for this week. Vietnam is active in its harvest and the export pace has been good so far this year.
Overnight News: ICE certified stocks are lower today at 2.468 million bags. UCE said that 0 notices were posted against May contracts and that total deliveries for the month are now 1,666 contracts. The ICO daily average price is now 93.35 ct/lb. Brazil will get mostly dry conditions with near normal temperatures. Some showers are possible this weekend. Near to above normal temperatures are expected next week. Vietnam will see mostly dry conditions.
Chart Trends: Trends in New York are mixed. Support is at 89.00, 86.00, and 83.00 July, and resistance is at 95.00, 97.00 and 99.00 July. Trends in London are mixed to down with no objectives. Support is at 1370, 1340, and 1310 July, and resistance is at 1420, 1440, and 1460 July.
General Comments: Futures were lower in both New York and London as the Brazilian Real started to turn higher against the US Dollar. London tried to move higher on ideas of less White Sugar production in Europe this year but failed to hold the rally. Chart patterns are sideways in New York and sideways in London. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support big production ideas. The Brazil crush fell again this year and was 625 million tons of Sugarcane. Brazil has been using a larger part of its Sugarcane harvest to produce ethanol this year instead of Sugar, but Thailand has shown increased production this year. Very good conditions are reported in Thailand. Less Sugar is expected from Thailand next year due to low prices and farmers moving to other crops. Less Sugar production is also expected in Europe this year due to low prices..
Overnight News: Brazil will get mostly dry weather, but showers are possible this weekend. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1250, 1240, and 1230 July, and resistance is at 1300, 1330, and 1360 July. Trends in London are mixed. Support is at 334.00, 333.00, and 332.00 August, and resistance is at 345.00, 349.00, and 355.00 August.
DJ Brazil Center-South Sugar Crush Gets Off to a Slow Start as Rains Delay Harvest
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the first half of April compared with a year earlier as rain in the area at the start of the month slowed harvesting, according to industry group Unica.
Center-south mills crushed 13.9 million metric tons of cane in the period, a decrease of 38% from the same period a year earlier. They produced 340,000 tons of sugar, down 52.3%, and made 737 million liters of ethanol, a decline of 26.2%.
The production mix for the first half of this month was 23.55% sugar to 76.45% ethanol. A year earlier, the mix was 31.35% sugar and 68.65% ethanol.
Brazil is the world’s biggest sugar producer and exporter, and the center-south grows about 90% of the country’s cane. The harvesting and processing season in the region officially begins April 1.
The rain that hit parts of the center-south at the start of April slowed harvesting and caused some sugar mills to delay their start of operations, Unica said. Only 150 mills were operating by April 15, instead of the 176 the group had expected to be running by then.
General Comments: Futures closed higher in both New York and London yesterday, and ideas are that the market might have found at least a short-term bottom. The main crop harvest should be about over and mid crop harvest is still a month or more away. Ivory Coast arrivals are strong as are exports. The weekly arrivals pace is about 10% higher than a year ago and is holding this level. Arrivals were reported strong in the rest of West Africa as well. Ivory Coast said arrivals are now 1.803 million tons and Ghana arrivals are now 698,553 tons. Both numbers are well above a year ago. Demand appears strong and the market is seeing stronger grind data from the quarterly grind is released in the EU, North America, and Asia. Growing conditions are generally good in West Africa. Some early week showers and cooler temperatures were beneficial, and most in West Africa expect a very good mid crop harvest. Conditions appear good in East Africa and Asia, but East Africa has been a little dry as has Malaysia.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near to 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 4.370 million bags. ICE said that 0 notices were posted against May contracts and that total deliveries for the month are now 330 contracts.
Chart Trends: Trends in New York are down with no objectives. Support is at 2230, 2190, and 2170 July, with resistance at 2320, 2350, and 2370 July. Trends in London are down with objectives of 1680 and 1620 July. Support is at 1710, 1690, and 1660 July, with resistance at 1760, 1770, and 1790 July.