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 a little higher again as Hurricane Dorian started to move north and affect areas in the Carolinas. The state with the most storm potential is now North Carolina, but even there the storm might not provide much more than a glancing blow to the states agricultural interests. There is potential for Cotton losses in the Southeast but mostly closer to the Atlantic coast. Bolls are starting to open now and the fiber could be colored or could the bolls could drop if there is enough wind. The system will create new questions about production potential. Conditions in the Texas Panhandle have improved with some recent showers and ideas are that production potential had been stabilized. Demand remains a real problem for the market as export sales overall have been poor. The world market remains quiet with very limited Chinese buying interest anywhere. Ideas are that USDA will be forced to lower export demand estimates in the September updates next week.
Overnight News: The Delta should be dry and Southeast should see showers and storms in coastal areas from Dorian, otherwise dry conditions. Temperatures should be mostly near to below normal early this week and near to above normal later this week. Texas will have mostly dry weather until showers appear about Tuesday. Temperatures will average above normal. The USDA average price is now 54.95 ct/lb. ICE said that certified stocks are now 12,802 bales, from 12,802 bales yesterday. USDA said that net Upland Cotton export sales were 162,800 bales this year and 198,200 bales next year. Net Pima sales were 900 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 5750, 5720, and 5660 December, with resistance of 5930, 5950, and 6000 December.
General Comments: FCOJ was higher again as Hurricane Dorian began to take a more northern track into the Carolinas. Tropical storm force winds moved into a big chunk of the state and could have hurt crops. There was a lot of rain in some areas that could have hurt quality. The Atlantic Coast saw some flooding and bigger winds and power outages, but there have not been any reports of big damage to citrus so far. Chart patterns have turned mixed in response to the hurricane threat that appeared last week. The weather in Florida had been tranquil as the state has seen frequent showers and storms that have aided in development in the fruit. Inventories in Florida are still 17% above a year ago. Fruit for the next crop is developing and are as big as baseballs. Crop conditions are called good. Mostly good conditions are reported in Brazil.
Overnight News: Florida should get scattered showers. Heavy rain is possible in eastern coastal areas from the hurricane today. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to below normal temperatures. ICE said that 0 notices were posted for delivery against September FCOJ contracts and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 101.00, 98.00, and 97.00 September, with resistance at 105.00, 108.00, and 110.00 September.
General Comments: Both New York and London closed lower yesterday on what appeared to be mostly fund oriented selling. The buy side of the market has been generally quiet and commercials are thought to be scale down buyers. The market is starting to feel smaller crops from Brazil and Vietnam for the current harvest. There are concerns about the quality of the crops available in Brazil this year as well as quality reports from exporters are not good. It will expect bigger crops next year. Some think that Brazil could producer over 70 million bags next year. The weather in Brazil is dry and forecasts for dry weather continue. Coffee areas will need to see the rainy season get started soon or the market will be faced with losses and the high production ideas will go away. The weaker production this year should help to hold prices from going much lower.
Overnight News: ICE certified stocks are higher today at 2.334 million bags. The ICO daily average price is now 94.01 ct/lb. Brazil will get mostly dry conditions with near normal temperatures. Vietnam will see scattered showers and storms mostly in the north. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 469 contracts.
Chart Trends: Trends in New York are mixed. Support is at 94.00, 91.00, and 88.00 December, and resistance is at 98.00, 101.00 and 103.00 December. Trends in London are down with objectives of 1270 and 1220 November. Support is at 1260, 1230, and 1200 November, and resistance is at 1300, 1340, and 1360 November.
General Comments: Futures closed lower on follow through speculative selling. The market is expected to be well supplied moving forward as exporter countries have big supplies now despite forecasts from the ISO for a deficit production next year. Reports from India indicate that the country still has a large surplus of White Sugar that probably must be exported. Processing of Sugarcane in Brazil is slower and the pace of the crush is behind last year. Mills are refining mostly for ethanol right now as has been the case all season. The fundamentals still suggest big supplies, and the weather in Brazil is good enough and India has improved to support some of the big production ideas. The weather has been much more uneven in production areas from Russia into western Europe. Those areas had a very hot and dry start to the growing season. Better weather was seen in early August then it turned hot and dry again. These areas need more rain and some cooler weather to provide better conditions for the final development of the Sugar beets crops.
Overnight News: Brazil will get mostly dry weather. Temperatures should be near normal.
Chart Trends: Trends in New York are down with objectives of 1180 and 1170 March. Support is at 1170, 1140, and 1110 March, and resistance is at 1220, 1240, and 1250 March. Trends in London are mixed to down with objectives of 307.00 and 294.00 December. Support is at 306.00, 300.00, and 294.00 December, and resistance is at 312.00, 317.00, and 323.00 December.
DJ World Sugar Market to Fall into Deficit in 2019-20: ISO
By Joe Wallace
The world sugar market is on course to fall into its first deficit for three years but that may not be enough to push depressed prices higher, the International Sugar Organization said on Monday.
In its first full forecast for the 2019-20 crop cycle, which runs from October this year to next September, the intergovernmental organization said the world would produce just under 172 million metric tons of sugar.
That represents a fall of 2.4%, or 4.14 million tons, from the 2018-19 season. At the same time consumption is forecast to grow by 2.35 million tons, or 1.3%, to 176.74 million tons, leaving the global market in a deficit of 4.76 million tons.
However, the amount of sugar available on international markets is expected to grow “on the back of considerable releases of stocks,” the ISO said. “Thus, no shortages in physical supply to the world market are currently anticipated.”
Sugar prices have dropped in recent weeks, pushing benchmark raw-sugar futures prices in New York close to a decade low at 11 U.S. cents. The market was closed for Labor Day on Monday but white-sugar futures were up 1.1% at $305 a metric ton in London.
Driving the decline are expectations of strong exports from India, the world’s largest sugar producer last year, at the same time as some governments are seeking to discourage sugar consumption.
Although it forecast that demand for sugar will increase in the 2019-20 season, the ISO said the pace of growth would fall to 1.3% from a recent average of 1.8%.
This slowdown reflects “the impact of the ‘sugar and health’ debate and the wave of introductions of additional taxes on sugar-containing products,” as well as weakening population growth, the ISO said.
General Comments: Futures closed lower in both markets as the rally on Wednesday found renewed selling interest on Thursday. The markets have acted weaker as the next main crop harvest comes closer to reality in West Africa. The weather in West Africa is still a feature. The weather in Ivory Coast has improved due to reports of frequent showers. Some showers in West Africa now help relieve stress on trees. The rains have been too much in Nigeria and there are reports of mold on the beans. Ideas are that the next crop will be good. The harvest will start in the Fall. Growing and harvesting conditions in Asia are also reported to be good. The harvest is ongoing amid showers, but good progress in the harvest is expected at this time. More and more Asian Cocoa has been staying at home and processed in Indonesia for export in the region. Demand in Asia has been growing and Indonesia has been eager to be the primary source of Cocoa.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will be on both sides of 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 3.977 million bags. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 2,118 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 2320 and 2420 December. Support is at 2210, 2180, and 2170 December, with resistance at 2290, 2300, and 2340 December. Trends in London are up with objectives of 1770 and 1970 December. Support is at 1740, 1710, and 1680 December, with resistance at 1780, 1800, and 1830 December.