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 lower in response to another poor weekly export sales report. Demand has become a big issue for the market as the harvest proceeds. Export demand overall is not real strong but has been strong enough to keep prices somewhat firmer. Talk that the US and China were close to a partial deal that would allow agricultural exports to flow to China in exchange for a truce in the tariff increases continues to provide some background support. Cotton producers hope that China will buy some Cotton from the US but China has not been doing this. In fact, overall report demand has been bad for US Cotton and in the end was a factor to send the market down again today. It has concentrated on Soybeans and Pork purchases instead and is expected to concentrate on meats buying in the coming weeks. USDA on Monday once again showed good crop progress as progress remains ahead of the five-year average. Condition showed some improvement as well.
Overnight News: The Delta should see showers today and tomorrow and then drier weather, and Southeast should see mostly dry weather today and showers this weekend. Temperatures should be on both sides of normal. Texas will have mostly dry conditions through the weekend. Temperatures will be near to above of normal. The USDA average price is now 61.79 ct/lb. ICE said that certified stocks are now 14,587 ba1es, from 13,101 bales yesterday. China imported 83,282 tons of Cotton in September, down 38.4% from last year.
Chart Trends: Trends in Cotton are mixed to up with objectives of 6590, 6650, and 6670 December. Support is at 6400, 6370, and 6220 December, with resistance of 6550, 6580, and 6750 December.
DJ On-Call Cotton – Oct 24
As of Oct 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
Oct 19 0 0 0 0 0 0
Dec 19 23,965 24,185 -220 29,354 31,957 -2,603
Mar 20 27,823 27,048 775 10,988 10,588 400
May 20 12,679 11,805 874 1,315 1,236 79
Jul 20 16,754 16,267 487 2,538 2,468 70
Dec 20 12,458 11,205 1,253 19,987 19,489 498
Mar 21 4,066 3,947 119 632 574 58
May 21 1,635 1,636 -1 0 0 0
Jul 21 2,806 2,809 -3 0 0 0
Dec 21 440 440 0 912 824 88
Mar 22 440 440 0 0 0 0
Total 103,066 99,782 3,284 65,726 67,136 -1,410
Oct 19 0
Dec 19 124,604 134,005 -9,401
Mar 20 71,917 69,514 2,403
May 20 10,448 9,471 977
Jul 20 10,866 9,539 1,327
Dec 20 18,291 17,612 679
Mar 21 1,127 1,158 -31
May 21 205 196 9
Jul 21 319 327 -8
Dec 21 58 3 55
Mar 22 0 0 0
Total 237,835 241,825 -3,990
General Comments: FCOJ was a little lower in mostly quiet trading. The market remains in a medium term trading range as the hurricane season starts to wind down. Speculators will look for weaker prices to start to position for a freeze event in the Winter. In the meantime, good growing conditions and increased oranges production estimates are bearish. Private sources show that there are less oranges per tree but the oranges are bigger and hold more acid. The weather has been great for the trees as there have been frequent periods of showers and no hurricanes or other severe storms so far this year. Some areas have been dry lately and some irrigation has been used. A storm moved through central and northern areas of the state over the weekend but mostly brought rain. Crop yields and quality should be high for Florida this year. Inventories of FCOJ in the state are high and are more than 30% above last year. Rains are falling in Brazil and trees should be flowering now.
Overnight News: Florida should get scattered showers through the weekend and into next week. Temperatures will average near to above normal. Brazil should get mostly dry weather and above normal temperatures through the weekend and some showers next week.
Chart Trends: Trends in FCOJ are mixed. Support is at 97.00, 96.00, and 95.00 September, with resistance at 101.00, 104.00, and 105.00 September.
General Comments: Futures were lower again yesterday. New York was lower on more reports of good flowering in Brazil and speculative selling tied to forecasts for better rains in Coffee areas next week. London has been the weaker market as the Asian harvest is underway but has held better than New York for the last few days. Vietnam exports remain behind a year ago, but the market anticipates bigger offers as producers and traders will need to create new storage space and are expected to do this by selling old crop Coffee. The Arabica growing areas got needed rains to start the flowering last week and reports indicate that flowering is off to a very good start. Rains are expected to start in Coffee areas on Monday. Overall the Coffee areas remain in a rain deficit but have had some timely rains to start the flowering. Many now anticipate a big crop from Brazil next year. However, there was some extreme cold and drought conditions earlier in the year that might have stressed trees and could hurt production potential for this year despite the good weather now. Vietnam crops are thought to be big despite some uneven growing conditions this year.
Overnight News: ICE certified stocks are lower today at 2.238 million bags. The ICO daily average price is now 96.38 ct/lb. Brazil will get scattered showers starting on Sunday with near to above normal temperatures. Vietnam will see scattered showers in all areas.
Chart Trends: Trends in New York are mixed to up with objectives of 101.00 December. Support is at 96.00, 94.00, and 91.00 December, and resistance is at 99.00, 100.00 and 102.00 December. Trends in London are mixed to down with no objectives. Support is at 1180, 1150, and 1120 November, and resistance is at 1230, 1250, and 1280 November.
General Comments: Futures closed mostly a little higher in New York and higher lower in London. Overall charts trends remain down but the market seems to have discovered some support at current levels. The move higher came despite news from UNICA that production increased in the first half of the month and that mills produced more Sugar and less Ethanol. Reports indicate that little is on offer from India. Thailand might also have less this year due to reduced planted area. However, most think there is still more than enough Sugar for any demand and that India will have to sell sooner or later. Reports from India indicate that the country is seeing relatively good growing conditions and still holds large inventories from last year. However, these supplies are apparently not moving and this could be due to less government subsidy for mills and exporters. Europe and Russia are probably buying in the world market after poor growing seasons. Reports of improving weather in Brazil imply good crops there. There is some talk that dry weather could hit Brazil growing areas, but this is helping the harvest and is keeping sucrose levels higher.
Overnight News: Brazil will get scattered showers starting on Sunday. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1190 March. Support is at 1210, 1190, and 1170 March, and resistance is at 1240, 1260, and 1290 March. Trends in London are mixed to down with objectives of 331.00 and 322.00 December. Support is at 333.00, 331.00, and 326.00 December, and resistance is at 338.00, 340.00, and 342.00 December.
DJ Brazil Center South Sugar Crush Jumped in First Half of Oct. on Good Weather
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the first half of October compared with a year earlier as good weather allowed harvesting work to advance rapidly, according to industry group Unica.
Center-south mills crushed 37.47 million metric tons of cane in the period, a jump of 46.2% from the same period a year earlier. They produced 1.9 million tons of sugar, up 70%, and made 2.29 billion liters of ethanol, an increase of 54.9%.
The production mix for the first half of this month was 34.65% sugar to 65.35% ethanol. A year earlier, the mix was 32.3% sugar and 67.7% ethanol.
Bad weather in cane-growing areas this time last year hit output of sugar and ethanol, but this year the weather has been favorable, boosting production compared with the same period in 2018, according to Anthony de Padua Rodrigues, Unica’s technical director.
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 Oct. 16, mills in the region crushed 510.27 million tons of cane, up 5% from the same period a year earlier. Sugar production rose 1.1% to 23.7 million tons, and ethanol output rose 5.9% to 27.52 billion liters.
The production mix for the season through Oct. 16 was 35.3% sugar to 64.7% ethanol. A year earlier, the mix was 36.1% sugar and 63.9% ethanol.
General Comments: Futures closed mixed in New York and higher in London. Cocoa trading has been as much about currency relationships than about supply and demand. Harvest is now active in West Africa and reports are that good volumes and quality are expected. The quarterly grind data was mixed and left people wondering how good the demand for chocolate will be. Chart trends are mixed. The reports from West Africa imply that a big harvest is possible in the region. Ivory Coast arrivals are off to a fast start and are above year ago levels three weeks into the season. The weather in Ivory Coast has improved due to reports of frequent showers. The precipitation is a little less now so there are no real concerns about disease. Ideas are that the next crop will be very good. Both Ivory Coast and Ghana are doing what they can do boost Cocoa prices and maintain good earnings for producers by paying a living wage differential and are looking to regulate the flow of Cocoa into the world market. The moves could force the big Cocoa processors and grinders to pay more as they contract for Cocoa well in advance to ensure adequate supplies.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will be near to below 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 3.456 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2440, 2410, and 2370 December, with resistance at 2500, 2530, and 25760 December. Trends in London are mixed. Support is at 1890, 1860, and 1850 December, with resistance at 1930, 1950, and 1990 December.