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 Food-Price Growth Slowed in January as Meat Prices Fell
By Joe Wallace
International food prices rose to their highest level in five years in January, but the pace of growth slowed as meat prices fell for the first time in a year, the Food and Agriculture Organization of the United Nations said Thursday.
The FAO’s overall food-price index rose 0.7% in January from December, hitting its highest level since December 2014. Prices had increased by more than 2% in the final two months of 2019.
Growth continued to be driven vegetable oil, the price of which rose 7% as strong demand from the biodiesel sector drained supplies. The FAO said vegetable-oil prices rose further in the first half of January, but fell back as traders grappled with uncertainty about how the U.S.-China trade deal and the outbreak of coronavirus would affect demand.
Meat prices fell for the first time since January last year, slipping 4% as imports fell in China and elsewhere in Asia during the Lunar New Year holiday.
General Comments: Cotton was higher yesterday in consolidation trading. Traders are trying to decide if it is better to buy or sell right now. The market doubts that China will take that much Cotton from the US even though they have in fact been buying. Traders also turned bearish on the coronavirus that could hamper two-way trade with the US and just about everyone else. China has been buying Cotton from the US and Brazil as it needs higher quality Cotton to blend with its domestic production. The Coronavirus has the chance to hurt trade in Cotton between the two countries. Chinese buyers might need less Cotton now as no one inside the country is shopping for anything new. People in many big cities in China are afraid to go outside due to fears of contracting the virus.
Overnight News: The Delta and Southeast should see some significant mixed precipitation over the middle of this week and Southeast areas could get big amounts of rain as well. Temperatures should average near to above normal. Texas will have drier weather. Temperatures will trend to near to above normal. The USDA average price is now 63.08 ct/lb. ICE said that certified stocks are now 28,234 ba1es, from 27,599 bales yesterday. USDA said that net Upland Cotton export sales were 332,300 bales this year and 4,800 bales next year. Net Pima sales were 5,500 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 6680, 6620, and 6480 March, with resistance of 6910, 6990, and 7090 March.
General Comments: FCOJ was mostly lower, but March managed to close a little higher. Trends turned back down and the charts suggest that lower prices will be the feature of the market for quite a while. No real change was noted in the fundamentals of big supplies and bad demand. There is a big crop of Oranges out there with not many outlets for consumption. Good growing conditions and increased oranges production estimates by USDA this season have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no severe storms so far this year. Many areas have been dry lately and irrigation is being used. Crop yields and quality should be high for Florida this year and harvest of non Valencia types of fruit is very active. Some flowering for the next crop is being seen. Consumer demand has been lacking on the ideas of higher prices for FCOJ and on health concerns. Inventories of FCOJ in the state are high and are more than 34% above last year.
Overnight News: Florida should get mostly dry conditions, but showers are possible on Friday. Temperatures will average near to above normal. Brazil should get dry conditions through the weekend and near to above normal temperatures.
Chart Trends: Trends in FCOJ are down with objectives of 91.00 and 89.00 March. Support is at 91.00, 88.00, and 85.00 March, with resistance at 96.00, 98.00, and 99.00 March.
General Comments: Futures were slightly lower in New York and in London on a lack of news and ideas of good growing conditions in Brazil. The chart trends remain down in New York and in London. Rains were reported in Brazil Coffee areas. The Brazilian crop is developing well. Offers were said to be strong from the country due to the good development of the new crop. It is dry in other parts of Latin America. Central America has had less than normal rains, especially in Honduras. The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low. Vietnam exports remain behind a year ago, but the market anticipates bigger offers. Vietnamese crops are expected to be big despite uneven growing conditions earlier in the year.
Overnight News: ICE certified stocks are a little higher today at 2.166 million bags. The ICO daily average price is now 98.22 ct/lb. Brazil will get scattered showers through this week and drier weather this weekend with near to above normal temperatures. Vietnam will see mostly dry conditions in the south and some light to moderate showers in the north.
Chart Trends: Trends in New York are down with no objectives. Support is at 96.00, 93.00, and 90.00 March, and resistance is at 100.00, 103.00 and 106.00 March. Trends in London are down with objectives of 1230 and 1160 March. Support is at 1260, 1240, and 1230 March, and resistance is at 1320, 1340, and 1360 March.
General Comments: New York and London closed mostly higher but London March closed a little lower. Trends are still trying to turn up in both markets. Current tight supplies, especially of White Sugar, are helping the market to rally. Reports indicate that little is on offer from India. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. Losses in both countries would affect the White Sugar market more than New York. 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 despite relatively strong world prices. Reports of improving weather in Brazil imply good crops there. Farmers have been selling to mills but the harvest is now almost over so the supplies will start to tail off. Brazil mills continue to favor ethanol in the production mix, but current higher prices for Sugar make it economic to open more processing to Sugar instead of ethanol.
Overnight News: Brazil will get scattered showers through this week and drier conditions this weekend. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1560 and 1640 March. Support is at 1440, 1410, and 1380 March, and resistance is at 1520, 1550, and 1580 March. Trends in London are mixed to up with objectives of 426.00 and 445.00 March. Support is at 411.00, 405.00, and 399.00 March, and resistance is at 420.00, 422.00, and 425.00 March.
DJ Sugar Prices Slip as Indian Uncertainty Hangs Over Market — Market Talk
1252 GMT – In New York, prices for raw-sugar futures slip taking their lead from falling oil prices. Sugar prices are often dictated by energy prices because refiners in Brazil, one of the world’s biggest producers of the sweetener, are able to crush cane into both sugar and biofuel. The outlook for sugar production in India is a major uncertainty hanging over the market, the International Sugar Organization says. In a monthly report, it notes that Uttar Pradesh is on course to produce more sugar than last year; by contrast, mills in Maharashtra have made less than half of what they had done by this stage of 2019. Mills are also lagging behind last year’s output in Karnataka, the third-biggest sugar-producing state. (firstname.lastname@example.org)
General Comments: Both markets closed higher N re back inside the recent trading range. Futures are seeking the direction of the next move after an extended up move and an extended correction down. Harvest is now active in West Africa and the results so far are very good. Ideas are that demand is currently very strong due to the current price action. The reports from West Africa imply that a big main crop harvest is possible in the region, but there are questions about how big the mid crop can be. Ivory Coast arrivals are strong and are above year ago levels. The weather in Ivory Coast is now dry and increasingly warm. The weather is too dry in Nigeria and there are fears that the mid crop is not developing well.
Overnight News: Mostly dry conditions are forecast for West Africa with Harmatan winds possibly increasing. Temperatures will be 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 sharply higher today at 3.178 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2770, 2710, and 2670 March, with resistance at 2830, 2860, and 2890 March. Trends in London are mixed. Support is at 1940, 1910, and 1890 March, with resistance at 1980, 2020, and 2040 March.