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

DJ U.S. Export Sales: Weekly Sales Totals – May 9
For the week ended May 2, in thousand metric tons, except cotton in
thousand running bales. Net changes in commitments are gross sales,
less cancellations, buy-backs and other downward adjustments. Total
commitments are total export shipments plus total sales.
The marketing year for wheat and barley began Jun 1, cotton and
and rice Aug 1, corn, soybeans and sorghum Sep 1, and soy meal and
soy oil Oct 1. Source: USDA
wk’s net chg total
in commitments undlvd sales
this yr next yr this yr last yr this yr next yr
wheat 90.6 412.3 25552.2 23538.5 4237.4 2557.5
hrw 34.4 176.0 9289.1 9250.1 1954.3 899.8
srw -1.4 35.5 3381.3 2520.2 651.3 486.8
hrs 29.3 71.4 6981.0 6089.0 836.6 551.1
white 3.9 86.4 5393.8 5274.9 736.0 462.7
durum 24.4 43.0 507.0 404.4 59.1 157.0
corn 287.6 6.9 46344.8 51631.4 10327.8 2249.2
soybeans -149.1 295.6 44988.2 55124.6 12118.4 1115.4
soymeal 150.8 45.7 10327.1 10151.7 2885.3 313.8
soyoil 16.4 0.0 686.1 844.2 172.1 4.2
upland cotton 235.8 56.5 14013.8 16037.5 5155.7 3083.5
pima cotton 2.1 5.7 701.2 588.8 248.8 46.1
sorghum 54.9 0.0 1565.4 5299.9 647.3 0.0
barley 0.0 0.0 61.3 40.0 22.0 31.6
rice 46.5 0.0 2861.2 2606.3 651.7 24.4

DJ Brazil Raises Estimate for 2018-2019 Soybean Crop to 114.3M Tons
By Jeffrey T. Lewis
SAO PAULO–Brazilian crop agency Conab raised its estimates for soybean and corn production for the 2018-2019 growing season after good weather later in recent months boosted productivity in many areas.
Brazilian farmers produced 114.3 million metric tons of soybeans in the 2018-2019 harvest, which is practically finished, Conab said Thursday. In April, the agency estimated a crop of 113.8 million tons, and in the 2017-2018 season Brazil produced 119.3 million tons of soybeans.
The decline from the previous season was due to unusually hot and dry weather in some states, especially Parana and Mato Grosso do Sul, at the start of the growing season, which reduced productivity in areas hit by the bad weather. But farmers who planted later, and who work in areas unaffected by the heat, had higher than normal productivity, according to Flavio Franca Jr., an analyst at Datagro.
“At first things looked bad, than the situation improved and then it got a lot better,” he said. “The soybeans planted in the last third of the season are in very good shape.”
The trade conflict between the U.S., the world’s biggest soybean grower, and China, the world’s biggest consumer, has helped prices for the crop in Brazil. With the recent increase in trade tensions between those two countries, Brazil should benefit, Mr. Franca said.
“Our whole crop will be consumed, either by the Chinese, or here in Brazil,” he said. “We started the year with very low stocks because of all the exports, and our crop is smaller this year, so there won’t be a surplus.”
The good weather toward the end of the season also is favoring corn production, Conab said. Brazilian farmers take advantage of the country’s mild winters to plant two crops per year, often soybeans in the summer then corn in the winter.
Conab raised its forecast for corn production to 95.2 million metric tons from 94 million tons in April. In the 2017-2018 season, Brazil grew 80.7 million tons of corn.

DJ Global Food Prices Hit 10-Month High in April -UN Food Agency
By Joe Wallace
LONDON–Global food prices hit a 10-month high in April, the United Nations’ food agency said Thursday in its monthly report.
The Food and Agriculture Organization’s food-price index rose 1.5% from a month earlier to reach its highest level since June 2018. However, prices remained 2.3% below where they stood in April last year, the FAO said.
Prices for most foodstuffs firmed, except for cereals. The sub-index for dairy posted the largest gain, rising 5.2% in April from March.
“International price quotations for butter, whole milk powder and cheese rose, as global import demand continued to be robust in anticipation of a further tightening in export availabilities from Oceania with dry weather conditions reinforcing the seasonal milk production drop,” the FAO said.
Meat prices also jumped as a result of a surge in demand for imported pork in Asia, where the Chinese pig herd–the largest in the world–has been ravaged by an outbreak of African swine fever. The meat-price index was up 3% compared with March, the FAO said.
Sugar prices rose 0.8% from a month earlier, driven by higher crude oil prices, which encouraged Brazilian producers to process sugar cane into ethanol for local sale.
Meanwhile vegetable-oil prices were up 0.9% compared with March, reflecting rising international demand for palm oil and domestic U.S. demand for soy oil to be used in the bio-fuel and food sectors.
However, cereal prices dropped 2.8% in April from March, the fourth straight month in which they have fallen. The FAO said this reflected booming supplies and weakening trade, in particular for wheat.

DJ Meat Trade to Surge as Virus Devastates Chinese Pig Herd, Says UN Food Agency
By Joe Wallace
The virus ravaging China’s pig herd will lead to a surge in the global meat trade and ripple through commodities such as poultry and whey powder, the UN’s food agency said Thursday in its twice-yearly market outlook.
African swine fever, which has a fatality rate of 100% in pigs and wild boar but is not harmful to humans, has swept through China since authorities confirmed the first outbreak in August last year. More than a million pigs have been culled in an effort to contain the virus, according to China’s Ministry of Agriculture and Rural Affairs, and the disease has spread to countries such as Vietnam and Cambodia.
World meat production will slip this year as a result of the culling, the Food and Agriculture Organization of the UN forecast, while Chinese imports will leap by up to 20%. That will help push global trade in meat and meat products up by 4.8% compared with 2018.
Around half the world’s pig population lives in China, and any shortfall has a magnified impact on pork prices because Chinese demand for the meat tends to hold up when it gets more expensive. The price of lean hogs has spiked more than 45% on the Chicago Mercantile Exchange this year.
Still, the pork shortfall has pushed up Chinese demand for other meats, the FAO said. That’s one reason why it expects global poultry trade to rise 3.7% to 13.8 million tons this year.
“At the end of the day it will affect all protein markets,” said Josef Schmidhuber, deputy director for trade and markets at the FAO. “China is just too big for a dent in its herd not to affect the world market.”
At the same time, the illness will hit Chinese demand of soybean, whey powder and other items used to feed pigs, the FAO forecast.
Prices for other agricultural commodities could also be hurt by a combination of favorable weather and weakening growth in the world economy.
Wheat production is on course to hit a record 767 million tons in the 2019/20 season, the FAO said, up 5% from 2018/19. Cereal production is forecast to rebound 2.7%, reaching a record 2,722 million tons, while strong harvests in Argentina and Brazil are expected to drive output of coarse grains such as corn and barley up 2.4%.
Warm and dry weather could threaten milk production, while sugar production is set to dip but outstrip consumption, and growth in fish demand is on course to slip amid trade tensions, the FAO said.
International food prices hit a 10-month high in April, led by a jump in the cost of dairy and meat produce and partially offset by a fall in serial prices, the FAO said in a separate report Thursday. The agency’s food-price index rose 1.5% from March, reaching its highest level since June 2018, but remained 2.3% lower than April last year.

DJ Fall Armyworm to Impact Chinese Crop Production — Market Talk
0142 GMT – The spread of the Fall Armyworm–a crop-eating pest–in China may result in lower production and crop quality, says the USDA. The disease has no natural predators, and chemicals are needed to control the pest. The agency notes the Armyworm, first detected in January currently impacts about 21 million acres of grain production in a half-dozen provinces. Experts report there is a high probability it will spread across all of China’s grain-production area the next year. (lucy.craymer@wsj.com)

DJ U.S. March Coffee, Cocoa Imports-May 9
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones.
—-Mar 2019—- —-Feb 2019—-
-coffee- kilograms pounds kilograms pounds
coffee, unroasted 130,473,137 287,693,267 116,810,017 257,566,087
coffee, roasted 8,273,472 18,243,006 6,738,401 14,858,174
coffee, soluble
instant 3,768,829 8,310,268 3,736,164 8,238,242
-Cocoa-
cocoa beans 42,333,732 93,345,879 62,594,442 138,020,745
sweetened bars/block
10 lbs or over 2,421,287 5,338,938 2,640,241 5,821,731
for retail candy 0 0 0 0
cocoa butter 10,092,892 22,254,827 7,923,080 17,470,391
cocoa paste,
not defatted 4,129,246 9,104,987 2,628,753 5,796,400
cocoa paste
defatted 5,133,076 11,318,433 4,849,512 10,693,174
cocoa powder,
unsweetened 9,013,308 19,874,344 8,090,618 17,839,813
cocoa powder,
sweetened 110,968 244,684 141,291 311,547
confectioners
coating 3,372,693 7,436,788 3,288,298 7,250,697
candy containing
chocolate 8,719,261 19,225,971 10,522,202 23,201,455

COTTON
General Comments: Cotton was lower again on what appeared to be fund selling. Most of the losses were in the nearby months and new crop prices were mixed. Futures remain weak in response to the threat from President Trump to increase tariffs from 10% to 25% in response to the slow pace of negotiations and reports that China was hoping to renegotiate some parts of the agreement. The US wants to hold things as they are and force new laws in China to help on the enforcement of any deal. USDA showed that planting progress was good in its weekly crop updates this week. 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. 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. Prices and producer attitudes imply that more Cotton could be planted.
Overnight News: The Delta and Southeast should get scattered showers and storms through the week. Temperatures should be mostly above normal today and tomorrow, then below normal. Texas will have showers and storms through the week, then mostly dry weather. Temperatures will average above normal today and tomorrow, then below normal. The USDA average price is now 66.77 ct/lb. ICE said that certified stocks are now 87,251 bales, from 81,588 bales yesterday. ICE said that 87 notices were posted against contracts for May delivery and that total deliveries for the month are now 406 contracts.
Chart Trends: Trends in Cotton are down with objectives of 7130 July. Support is at 7180, 7120, and 7060 July, with resistance of 7300, 7370, and 7470 July.

DJ U.S. March Cotton Exports-May 9
In kilograms and in running 480-pound bales. Source. U.S. Department
Commerce.
(*)NOTE: Year ago figures reflect data reported at that time.
Data includes Exports and Re-Exports.
——- In Kilograms ——-
Mar 19 Feb 19 Jan 19 Mar 18(*)
Upland, under 1 inch 29,595,798 18,247,137 14,511,360 28,917,556
1 to 1 1/8 inch 133,680,644 94,958,960 102,469,785 166,100,972
upland 1 1/8 and over 286,568,070 199,117,394 140,268,013 299,191,902
Amer Pima, over 1 1/8 inc 9,659,747 10,838,794 9,402,435 12,801,458
All cotton 459,504,259 323,162,285 266,651,593 507,011,888
——- In Running 480-Pound Bales ——-
Mar 19 Feb 19 Jan 19 Mar 18(*)
Upland, under 1 inch 135,932 83,808 66,650 132,817
1 to 1 1/8 inch 613,990 436,143 470,640 762,896
upland 1 1/8 and over 1,316,196 914,539 644,246 1,374,177
Amer Pima, over 1 1/8 inc 44,367 49,782 43,185 58,797
All cotton 2,110,486 1,484,272 1,224,721 2,328,687

FCOJ
General Comments: FCOJ was higher in recovery trading. The move yesterday came from oversold conditions as no one was willing to add to short positions in a big way. Trends are still 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 as Florida Department of Agriculture showed a 24% increase in state inventories in its weekly report. The increase is coming from less demand and higher imports along with the increased domestic production. 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. Fruit is marble to quarter sized at this time. 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. Temperatures will average near to above normal. Brazil should get scattered showers late this week and below normal temperatures. ICE said that 0 notices were posted for delivery against May contracts today and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are down with objectives of 88.00 and 83.00 July. Support is at 89.00, 86.00, and 83.00 July, with resistance at 95.00, 98.00, and 101.00 July.

DJ Florida FCOJ Movement and Pack – May 8
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING:
4/27/2019 Corresponding
Current Week Last
Week Season
4/27/2019 4/28/2018 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 296.73 225.53 31.6%
Retail/Institutional 6.11 7.31 -16.4%
Total 302.84 232.84 30.1%
Pack
Bulk 5.39 3.19 69.1%
Retail/Institutional 1.34 1.01 32.6%
Total Pack 6.74 4.20 60.3%
Reprocessed -3.38 -2.55 32.6%
Pack from Fruit 3.36 1.65 102.9%
Receipts & Losses
Net Gain or Loss 0.04 -0.16 -77.9%
Imports – Foreign 7.15 16.02 -55.4%
Domestic Receipts 0.38 3.13 -88.0%
Receipts of Florida Product
from Non-Reporting Entit 0.00 0.00 NC
Chilled OJ used in FCOJ 0.00 0.01 -100.0%
Reprocessed FCTJ 0.00 0.00 NC
Total Carry Over, Receipt & Pack
Bulk 306.30 245.16 24.9%
Retail/Institutional 7.46 8.32 -10.4%
Total 313.76 253.48 23.8%
MOVEMENT
Bulk
Domestic 3.85 3.33 15.5%
Exports 0.18 0.30 -39.7%
Total (Bulk) 4.03 3.63 10.9%
Retail/Institutional
Domestic 1.23 1.11 10.8%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.23 1.11 10.8%
Total Movement 5.26 4.74 10.9%
ENDING INVENTORY
Bulk 302.27 241.52 25.2%
Retail/Institutional 6.23 7.22 -13.7%
Ending Inventory 308.50 248.74 24.0%
Total Same
Total Season Period Last
To Date Season
27-Apr-19 28-Apr-18 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 237.21 185.02 28.2%
Retail/Institutional 5.92 7.20 -17.8%
Total 243.13 192.21 26.5%
Pack
Bulk 107.07 78.16 37.0%
Retail/Institutional 36.25 38.17 -5.0%
Total Pack 143.32 116.33 23.2%
Reprocessed -75.46 -80.17 -5.9%
Pack from Fruit 67.86 36.15 87.7%
Receipts & Losses
Net Gain or Loss -0.62 0.63 -1.0%
Imports – Foreign 182.85 186.65 -2.0%
Domestic Receipts 4.63 7.36 -37.0%
Receipts of Florida Produ 0.04 0.39 -90.9%
from Non-Reporting Entit 3.28 1.00 227.8%
Chilled OJ used in FCOJ 0.34 0.47 -27.4%
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 459.34 379.50 21.0%
Retail/Institutional 42.17 45.37 -7.1%
Total 501.50 424.87 18.0%
MOVEMENT
Bulk 143.39 128.54 11.6%
Domestic 13.68 9.44 44.9%
Exports 157.07 137.98 13.8%
Total (Bulk)
Retail/Institutional
Domestic 35.94 38.15 -5.8%
Exports 0.00 0.00 NC
Total (Retail/Inst) 35.94 38.15 -5.8%
Total Movement 193.01 176.13 9.6%
ENDING INVENTORY
Bulk 302.27 241.52 25.2%
Retail/Institutional 6.23 7.22 -13.7%
Ending Inventory 308.50 248.74 24.0%

COFFEE
General Comments: Futures were a little higher yesterday in both markets in consolidation trading. Some speculators are saying that the market is getting close to its final low. Trends are still down in both markets as the unrelenting down trend continues. The trade is still worried about big supplies, especially from Brazil and low demand. Brazil is dominating the market, and other exporters are having a lot of trouble finding buyers. Roasters were scale down buyers on the extended down move and now have more than ample supplies in-house or on the way. Brazil had a big production year for the current crop, but the next crop should be less as it is the off-year for production. Ideas are that the next 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. Growing conditions are good in Brazil, but it is a little dry in Central America and Vietnam. Shower activity is increasing in Vietnam.
Overnight News: ICE certified stocks are little changed today at 2.438 million bags. ICE said that 0 notices were posted against May contracts and that total deliveries for the month are now 1,718 contracts. The ICO daily average price is now 89.40 ct/lb. Brazil will get mostly dry conditions or light showers with near normal temperatures. Near to above normal temperatures are expected next week. Vietnam will see mostly dry conditions.
Chart Trends: Trends in New York are down with objectives of 88.00 and 81.00 July. Support is at 86.00, 83.00, and 80.00 July, and resistance is at 91.00, 93.00 and 95.00 July. Trends in London are down with objectives of 1280 July. Support is at 1270, 1250, and 1220 July, and resistance is at 1340, 1370, and 1400 July.

DJ Coffee Slump Continues Amid Declining Exports: ICO — Market Talk
0828 GMT – Coffee prices fell to their lowest level in almost 13 years in April, the International Coffee Organization says. The ICO’s composite price index fell to 94.42 cents a pound, down 3.2% from March and 16.1% from April last year, the intergovernmental organization says in its monthly market report. Lower prices appear to be discouraging sales: world exports of coffee fell to 10.98 million bags in March 2018, down 3.8% from a year before. Surging shipments from Brazil, encouraged by a weak exchange rate and strong harvest, continue to drive international prices down. (joe.wallace@wsj.com)

SUGAR
General Comments: Futures were lower on follow through chart related selling and on the CONAB estimate for increased Brazilian Sugar production that was released on Tuesday. News of big production from India and Thailand for White Sugar was also negative as it looks like all the major Sugar exporters have a lot to sell. Trends are down in both markets. The speculative selling has been strong now for the last week due to the new down trend. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support big production ideas. Brazil weather is good in all areas, although southern areas remain too wet. Brazil has been using a larger part of its Sugarcane harvest to produce ethanol this year instead of Sugar, but Thailand has been offering. Ideas that production in India and Pakistan is being hurt by uneven rains so far. Very good conditions are reported in Thailand, but production this year could be less due to reduced area and low prices. Demand for Sugar has been good, and demand for ethanol is reported to be increasing.
Overnight News: Brazil will get mostly dry weather or light showers. Temperatures should be near to above normal.
Chart Trends: Trends in New York are down with objectives of 1150 July. Support is at 1150, 1130, and 1110 July, and resistance is at 1200, 1230, and 1240 July. Trends in London are down with objectives of 321.00 and 308.00 August. Support is at 321.00, 318.00, and 315.00 August, and resistance is at 332.00, 334.00, and 339.00 August.

DJ Bumper Thai, Indian Crops Depress Premium for White Sugar: ISO — Market Talk
1251 GMT – The premium companies and investors that pay to buy refined as opposed to raw sugar fell to a multi-year low in April, the International Sugar Organization says in its monthly report. Bumper crops in Thailand and India, major exporters of white sugar, pushed the premium down to $54.01 a metric ton. Overall it was a “dull” month for the sugar market, the ISO says, as prices moved in a narrow range. Hedge funds maintained a net short position, betting that prices will fall. Since May 2017, they have been net short sugar for all but four weeks, the ISO notes. (joe.wallace@wsj.com)

DJ Brazil 2019-2020 Sugar Production to Rise 17.4% on Year to 34.1M Tons -Conab
By Jeffrey T. Lewis
SAO PAULO–Brazil’s sugar output will jump in the 2019-2020 cane growing season as mills return to a more normal production level of the sweetener following the previous season’s ethanol-heavy production, according to the forecast by Brazilian crop agency Conab.
Farmers will grow 616 million metric tons of cane in the season, down 0.7% from the 2018-2019 season, Conab predicted. Sugar production will jump 17.4% to 34.1 million tons and ethanol output will fall 4.2% to 31.8 billion liters, Conab said.
With low prices for sugar on world markets last season because of larger than normal output in other countries such as India and China, Brazilian sugar mills cut output of the sweetener and produced a record amount of ethanol. With sugar prices seen recovering a bit this year, mills should return to a production mix closer to those in earlier years.
The mix will be 39.1% sugar and 60.9% ethanol in the 2019-2020 season, from 34.9% sugar and 65.1% ethanol in 2018-2019, according to Conab.
In Brazil’s center-south region, which produces about 90% of the country’s sugar cane, the cane crop is forecast to fall 1% to 566.7 million tons, while sugar output will rise 18.6% to 31.4 million tons and ethanol production will fall 4.5% to 29.6 million tons, Conab said.
The country has the world’s biggest fleet of vehicles that can run on either ethanol or gasoline, and all gasoline sold at the pumps is also at least 27% ethanol. Brazil’s sugar mills can adjust their production of the sweetener and the alternative fuel based on which is more profitable.

COCOA
General Comments: Futures closed mixed yesterday, with New York a little higher and London a little lower. Ivory Coast arrivals are strong as are exports. The weekly arrivals pace is about 15% higher than a year ago and is holding this level. Arrivals were reported strong in the rest of West Africa as well. Demand appears strong and the market saw stronger than expected grind data when the quarterly grind is released in the EU, North America, and Asia over the past few weeks. Growing conditions are generally good in West Africa as there are showers and somewhat cooler temperatures. Conditions appear good in East Africa and Asia, but Brazil has been a little dry as has Malaysia. Ivory Coast arrivals are now estimated at 1.874 million tons, from 1.642 million last year.
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 4.520 million bags. ICE said that 0 notices were posted against May contracts and that total deliveries for the month are now 457 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 2250 and 2150 July. Support is at 2290, 2230, and 2190 July, with resistance at 2310, 2350, and 2380 July. Trends in London are down with objectives of 1700, 1680, and 1640 July. Support is at 1710, 1690, and 1660 July, with resistance at 1760, 1780, and 1810 July.

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