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 in correction trading before the WASDE reports that will be released later today. The market continues weak 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. 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, but growing areas saw above normal rains in the last week.
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 57.83 ct/lb. ICE said that certified stocks are now 64,028 bales, from 65,348 bales yesterday. ICE said that 0 notices were posted for delivery against July contracts and that total deliveries are now 240 contracts. USDA said that net weekly Upland Cotton export sales were 53,400 bales this year and 38,400 bales next year. Net Pima sales were 700 bales this year and 2,800 bales next year.
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 mixed and little changed as the market gets ready for the USDA reports today. USDA has been showing very strong oranges production potential for Florida at or above 70 million boxes. 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, but for now the state is likely to see only scattered showers. 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 a little lower on ideas that total losses from the freeze event in Brazil Coffee areas will not be tat much. The coldest weather in Brazil in six years hit this past weekend. 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. 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 a little lower today at 2.369 million bags. The ICO daily average price is now 103.12 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.
General Comments: Futures closed higher and stayed inside the recent trading range. Some selling was seen early in response to the UNICA data, but the mix of refining that greatly favors Ethanol helped support the market later. The Unica weather service said monsoon rains were much improved in Sugar areas last week and were above normal for the first time all season. The market still expects production losses due to the late start and below normal rains until now. 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 further speculative selling was seen. The charts show that the majority of the Monday rally has been given up and that futures could test the support near the breakout point today. 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. Ivory Coast arrivals were 2.061 million tons through the end of June, from 1.869 million last year. Ghana said that producers could get 70% of the minimum in the new pricing program it is putting together with Ivory Coast.
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 4.391 million bags. ICE said that 2 contracts were delivered against July futures today and that total deliveries for the month are 725 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 2620 and 2750 September. Support is at 2500, 2480, and 2450 September, with resistance at 2550, 2590, and 2600 September. Trends in London are mixed to up with objectives of 1970 September. Support is at 1870, 1850, and 1830 September, with resistance at 1930, 1940, and 1950 September.