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 sharply lower on ideas of improving US crop conditions and worries about the overall world economic health. Growing conditions are improving in the US and monsoon rains are reported in India, but there is not a lot of consumptive buying around. It is warmer and drier for the crop in the Texas Panhandle and other producing areas of the US are through to be in good shape. Crop progress remains very close to the five-year average and crop conditions are called mixed, but appear to be improving. Trends turned down with big move yesterday, and speculators were forced to sell. The state breakdown for the crop condition ratings still show the problems in Texas as the crop there is showing the weakest condition. It is now turning warmer and drier in the Panhandle so conditions can improve. The Delta has also been wet and some rains have been seen in the Southeast over the last few weeks. The Indian monsoon is off to a slow start and production potential could be hurt there and in Pakistan. Monsoon rains have improved in central and southern parts of the country but these rains are arriving a couple of weeks late. June rains are less than normal this year. Some forecasts say that the monsoon will fade early this year.
Overnight News: The Delta and Southeast could see some showers this weekend. Temperatures should be mostly near to above normal. Texas will have mostly dry weather through this weekend and scattered showers today. Temperatures will be above normal. The USDA average price is now 57.32 ct/lb. ICE said that certified stocks are now 65,348 bales, from 65,586 bales yesterday. ICE said that 0 notices were posted for delivery against July contracts and that total deliveries are now 240 contracts
Chart Trends: Trends in Cotton are down with objectives of 6170 and 5780 December. Support is at 6280, 6260, and 6200 December, with resistance of 6470, 6530, and 6550 December.
General Comments: FCOJ was lower as there is still no outlook for threatening weather to hit Florida production areas. Weather forecast are now calling for a tropical system to form in the Gulf of Mexico. The system would stay to the west of Florida and will move towards Louisiana and Texas, but the system is a sign that the tropics are getting more active. The system could still provide some beneficial rains for Florida before it moves west. Trends are sideways on the daily charts and weekly charts. Fruit for the next crop is developing and are at least as big as golf balls. Some fruit is now the size of tennis balls. Crop conditions are called good. Irrigation is being used a few times a week to help protect crop condition. Mostly good conditions are reported in Brazil as the harvest there is active.
Overnight News: Florida should get scattered showers through the weekend. Temperatures will average near to above normal. Brazil should get scattered showers today, then drier weather and near normal temperatures. ICE said that 0 notices were posted for delivery against July contracts and that total deliveries for the month are 0 contracts
Chart Trends: Trends in FCOJ are mixed. Support is at 102.00, 99.00, and 95.00 September, with resistance at 107.00, 110.00, and 115.00 September.
General Comments: Futures were higher at the close and after starting the day lower. The market is still reeling from the reaction of Monday as the coldest weather in Brazil in six-year this past weekend apparently did little significant damage to crops. Below freezing temperatures were reported in Parana and in parts of Minas Gerais. However, reports from Minas Gerais suggest that damage in that state was minimal. Parana damage was much greater, but the state is not a big source of Coffee anymore as producers moved north after freezes a couple of decades ago. There was bad weather at flowering time and the harvest is reporting low yields and quality, anyway. The chart trends have turned down with the price action yesterday. There is a lot of talk that production will be much less than 50 million bags as the press and the coffee association there all report reduced yields and quality. Brazil has kept its export pace strong even with less production, and the strong export pace has helped jeep New York and London from rallying. Vietnam is also reporting lower yields for the current crop as the weather was not good for flowering earlier in the year. There have been some hot and dry spells that have hurt yield and quality for these crops as well, but showers are reported in the Central Highlands now and ideas are that conditions and production potential have improved.
Overnight News: ICE certified stocks are higher today at 2.370 million bags. The ICO daily average price is now 103.94 ct/lb. Brazil will get mostly dry conditions with near to above temperatures. Vietnam will see scattered showers and storms. ICE New York said that 0 notices were posted against July contracts and that total deliveries for the month are 557 contracts.
Chart Trends: Trends in New York are down with objectives of 105.00, 99.00, and 94.00 September. Support is at 105.00, 102.00, and 101.00 September, and resistance is at 110.00, 115.00 and 118.00 September. Trends in London are mixed to down with objectives of 1390 and 1340 September. Support is at 1410, 1380, and 1360 September, and resistance is at 1460, 1490, and 1510 September.
DJ Brazil Coffee Exports Rose 12% in June to 2.9 Million Bags — Cecafe
By Jeffrey T. Lewis
SAO PAULO–Brazilian coffee exports rose in June from a year earlier as sales abroad of the arabica variety jumped, according to exporters group Cecafe.
The South American country exported 2.9 million 132-pound bags of coffee last month, an increase of 12% from the same month a year earlier, Cecafe said Monday.
Arabica exports rose 10.5% to 2.2 million bags, while exports of robusta beans increased 35.8% to 385,582 bags.
Brazil produced a record 47.5 million bags of the arabica variety of beans in 2018, and exported a record 41.1 million bags from July of last year through June, 2019, Cecafe said. The growing flow of coffee from Brazil into world markets helped push the price for arabica beans to the lowest in more than 10 years in May, and they remain low even after recovering some ground since then.
Exports of roasted, ground and soluble coffee fell 0.1% in May to 313,208 bags, Cecafe said.
General Comments: Futures closed a little lower but managed to hold above the lower end of the recent trading range. News that much of the Brazil Sugarcane damaged by the freeze could be salvaged and improving weather in India appeared to be reasons to sell. World economic data has been weaker and there are concerns about world ethanol demand. Corn futures have been weaker as well, and there are ideas that the world economy is slowing. The losses in India could be significant due to the late start to the monsoon, but the country has a big surplus and should have no problem with supplies for the coming year. The production losses this year could mean that India will feel less pressure to dump Sugar on the world market and that would help world prices hold current levels or rally. The Indian monsoon continues to improve in rain amounts and coverage but remains behind average and rains are below average for the month. Many private forecasters expect less rain and warmer temperatures than normal. Water supplies are low so good monsoon rains will be needed. Very good conditions are reported in Thailand.
Overnight News: Brazil will get mostly dry weather or light showers. Temperatures should be below normal today and near to above normal starting tomorrow.
Chart Trends: Trends in New York are mixed. Support is at 1230, 1210, and 1200 October, and resistance is at 1260, 1280, and 1290 October. Trends in London are mixed. Support is at 324.00, 323.00, and 320.00 October, and resistance is at 328.00, 331.00, and 333.00 October.
DJ Brazil Center-South Sugar Crush Up 1.2% at 46.1M Tons in 2H June -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 June compared with a year earlier, according to industry group Unica.
Center-south mills crushed 46.1 million metric tons of cane in the period, a rise of 1.2% from the same period a year earlier. They produced 2.2 million tons of sugar, down 4.1%, and made 2.3 billion liters of ethanol, a decline of 1.2%.
The amount of sugar and ethanol produced both fell, despite the increase in the amount of cane processed, because the total recoverable sugar in a metric ton of cane fell by 3.8% compared with the same period a year earlier.
The production mix for the second half of last month was 37.1% sugar to 62.9% ethanol. A year earlier, the mix was 37.7% sugar and 62.3% 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 July 1, mills in the region crushed 216.9 million tons of cane, down 3% from the same period a year earlier. Sugar production fell 8.9% to 8.9 million tons, and ethanol output fell 4.3% to 10.6 billion liters.
The production mix for the season through July 1 was 34.7% sugar to 65.3% ethanol. A year earlier, the mix was 35.6% sugar and 64.4% ethanol.
General Comments: Futures closed lower as some speculative selling developed after the big rally on Monday. Some producer selling may have hit the market as well as prices tested the highs made in June. The uneven weather in West Africa is still a feature. Ghana says it has lost 50,000 tons of Cocoa from its main crop due to disease and expects to lose more from the mid crop and maybe the nest main crop. The weather in Ivory Coast has been dryer than normal for the last couple of weeks and there is some talk that production of the next main crop could be hurt. Some showers are returning to West Africa now to help relieve stress on trees. Ivory Coast arrivals re now 2.115 million tons., from 1.904 million tons last year.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near 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 lower today at 4.421 million bags. ICE said that 0 contracts were delivered against July futures today and that total deliveries for the month are 723 contracts.
Chart Trends: Trends in New York are up with objectives of 2620 and 2750 September. Support is at 2520, 2500, and 2480 September, with resistance at 2550, 2590, and 2600 September. Trends in London are up with objectives of 1970 September. Support is at 1890, 1870, and 1850 September, with resistance at 1930, 1940, and 1950 September.