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 mostly a little higher yesterday on follow through speculative buying. The USDA reports were considered neutral even though USDA did not really add in much Chinese buying. USDA had said they would keep to a broad sweep of the buying interest and not promote any specific targets, and they did not promote anything with Cotton. 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 through the middle of this week and Southeast areas could get big amounts of rain as well. Drier starting on Thursday. Temperatures should average near to above normal. Texas will have mostly dry weather. Temperatures will trend to near to above normal. The USDA average price is now 63.80 ct/lb. ICE said that certified stocks are now 32,066 bales, from 32,168 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 6710, 6680, and 6620 March, with resistance of 6850, 6910, and 6990 March.
DJ USDA Supply/Demand: U.S. Cotton – Feb 11
U.S.Cotton Supply and Use 1/
Item 2018/19 2019/20
prev Feb 11 prev Feb 11
Planted 14.10 14.10 13.74 13.74
Harvested 10.21 10.21 11.80 11.80
Yield per harv. acre 864.00 864.00 817.00 817.00
Million 480 pound bales
Beginning stocks 4.20 4.20 4.85 4.85
Production 18.37 18.37 20.10 20.10
Imports 0.00 0.00 0.01 0.01
Supply, total 22.57 22.57 24.96 24.96
Domestic use 2.98 2.98 3.00 3.00
Exports 14.76 14.76 16.50 16.50
Use, total 17.74 17.74 19.50 19.50
Unaccounted 2/ -0.02 -0.02 0.06 0.06
Ending stocks 4.85 4.85 5.40 5.40
Avg. farm price 3/ 70.30 70.30 63.00 62.00
Note: Reliability calculations at end of report. 1/ Upland and extra-long
staple; marketing year beginning August 1. Totals may not add due to
rounding. 2/ Reflects the difference between the previous season’s supply
less total use and ending stocks. 3/ Cents per pound for upland cotton.
DJ USDA Supply/Demand: World Cotton – Feb 11
World Cotton Supply and Use 1/
(Million 480-pound bales)
beginning domestic exports ending
stocks prod imports use use loss 2/ stocks
Jan 79.53 120.48 43.83 120.22 43.85 0.19 79.59
Feb 79.99 121.33 43.55 119.01 43.54 0.19 82.12
World Less China
Jan 43.86 93.23 35.33 81.72 43.67 0.19 46.85
Feb 44.32 94.08 35.05 81.51 43.37 0.19 48.38
Jan 4.85 20.10 0.01 3.00 16.50 0.06 5.40
Feb 4.85 20.10 0.01 3.00 16.50 0.06 5.40
Jan 74.68 100.38 43.83 117.22 27.35 0.13 74.19
Feb 75.14 101.23 43.54 116.01 27.04 0.13 76.72
Major exporters 4/
Jan 28.13 56.91 2.88 34.05 22.85 0.02 31.00
Feb 28.57 57.21 2.98 34.05 22.67 0.02 32.02
Major Importers 8/
Jan 44.60 40.42 38.37 78.97 2.94 0.11 41.36
Feb 44.60 40.93 37.73 77.76 2.89 0.11 42.50
1/ Marketing year beginning August 1. Totals may not add exactly and trade
may not balance due to rounding and other factors. 2/ Generally
reflects cotton lost or destroyed in the marketing channel; for Australia
Brazil China and the United States reflects the difference between
implicit stocks based on supply less total use and indicated ending
stocks. 3/ Less than 5 000 bales. 4/ Includes Egypt and Syria in
addition to the countries and regions listed. 5/ Azerbaijan Kazakhstan
Kyrgyzstan Tajikistan Turkmenistan and Uzbekistan. 6/ Benin Burkina
Faso Cameroon Central African Republic Chad Cote d’Ivoire Mali Niger
Senegal and Togo. 7/ Argentina Australia Brazil Lesotho South
Africa Tanzania Zambia and Zimbabwe. 8/ In addition to the countries
and regions listed includes Japan Russia South Korea and Taiwan. 9/
Includes intra-EU trade.
General Comments: FCOJ was a little higher and broke through the top end of the trading range. The price action has become very strong in the last couple of days and funds and other speculators are covering short positions. 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. Consumer demand has been lacking on the ideas of higher prices for FCOJ and on health concerns.
Overnight News: Florida should get mostly dry conditions, but showers are possible on Friday. Temperatures will average near to above normal. Brazil should get scattered showers through the weekend and near to above normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 104.00 and 110.00 March. Support is at 98.00, 96.00, and 95.00 March, with resistance at 100.00, 102.00, and 105.00 March.
DJ USDA Crop Production: U.S. Citrus Fruits – Feb 11
Citrus Fruits: Utilized Production by Crop, State, and
United States, Forecasted Feb 1, 2020
(The crop year begins with the bloom of the first year shown and ends
with the completion of harvest the following year.)
Utilized Production Utilized production
Boxes 1/ Ton Equivalent
Crop and State ======================================================
2018-19 2019-20 2018-19 2019-20
=== 1,000 Boxes === ==== 1,000 Tons ===
California, all 49,800 49,000 1,992 1,960
Early, mid, and Navel 3/ 40,800 40,000 1,632 1,600
Valencia 9,000 9,000 360 360
Florida, all 71,750 72,000 3,229 3,240
Early, mid, and Navel 3/ 30,400 31,000 1,368 1,395
Valencia 41,350 41,000 1,861 1,845
Texas, all 2/ 2,500 2,560 106 109
Early, mid, and Navel 3/ 2,210 1,950 94 83
Valencia 290 610 12 26
United States, all 124,050 123,560 5,327 5,309
Early, mid, and Navel 3/ 73,410 72,950 3,094 3,078
Valencia 50,640 50,610 2,233 2,231
1/ Net pounds per box: oranges in California-80, Florida-90, Texas-85;
grapefruit in California-80, Florida-85, Texas-80; tangerines and
mandarins in California-80, Florida-95; lemons-80.
2/ Estimates for current year carried forward from an earlier forecast.
3/ Navel and miscellaneous varieties in California. Early (including Navel)
and midseason varieties in Florida and Texas.
4/ Includes tangelos and tangors.
General Comments: Futures were higher in New York and in London on a lack of news and despite ideas of good growing conditions in Brazil. The chart trends remain down in New York and in London due to the big production ideas, but futures could form a bottom in the current trading range. Cecafe noted reduced exports from Brazil in January. The ICO noted that demand remains very strong in the world market and that demand could outstrip supply in the next few weeks. Rains were reported in Brazil Coffee areas over the weekend. 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 higher today at 2.167 million bags. The ICO daily average price is now 99.25 ct/lb. Brazil will get scattered showers with near to below normal temperatures through Thursday and near to above normal temperatures after that. 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 mixed. Support is at 97.00, 96.00, and 93.00 March, and resistance is at 103.00, 106.00 and 110.00 March. Trends in London are mixed. Support is at 1250, 1240, and 1230 March, and resistance is at 1290, 1300, and 1320 March.
DJ Brazil Coffee Exports Fall 7.2% in Jan. as Stocks Dry Up, Cecafe Says
By Jeffrey T. Lewis
SÃO PAULO–Brazilian coffee exports fell in January as farmers ran out of stocks of beans to meet demand ahead of the start of the next harvest, according to exporters group Cecafe.
The South American country exported 3.2 million 132-pound bags of coffee last month, a decline of 7.2% from the same month a year earlier, Cecafe said Tuesday.
Sales abroad of the arabica variety of coffee fell 12.8% to 2.7 million bags, while exports of robusta beans jumped 48.6% from January 2019 to 223,828 bags.
Brazil’s arabica coffee production has a two-year cycle in which even-numbered years produce bigger crops, then productivity declines in odd-numbered years as the plants “rest.” During 2019, growers sold their stocks of beans from previous harvests to keep up with demand, but those stocks are close to exhausted, according to Cecafe President Nelson Carvalhaes.
The country is exporting more of the robusta variety of coffee, which is much less affected by the two-year cycle, because the crop is recovering from a drought in the state that produces most of Brazil’s robusta beans that slammed production.
Brazil is also the world’s biggest producer and exporter of instant coffee, and in January its exports of roasted, ground and instant coffee rose 28.8% to 317,137 bags, Cecafe said.
General Comments: New York and London closed higher as short Asian production continued to be the main feature. Trends are up in both markets and funds have been big buyers. Current tight supplies, especially of White Sugar, are helping the market to rally. Reports indicate that little is on offer from India. Thailand will 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 of improving weather in Brazil continue to 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. Petrobras announced it was cutting the price of gasoline in its filling stations this week, so more Sugar and less Ethanol might be on the way.
Overnight News: Brazil will get scattered showers. Temperatures should be near to below normal through Thursday, then near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1560 and 1640 March. Support is at 1510, 1500, and 1480 March, and resistance is at 1550, 1580, and 1610 March. Trends in London are up with objectives of 445.00 March. Support is at 428.00, 420.00, and 415.00 March, and resistance is at 437.00, 440.00, and 443.00 March.
DJ USDA Supply/Demand: U.S. Sugar – Feb 11
U.S. Sugar Supply and Use 1/
Item 2018/19 2019/20
prev Feb 11 prev Feb 11
1,000 short tons, raw value
Beginning stocks 2,008 2,008 1,783 1,783
Production 2/ 8,999 8,999 8,158 8,158
Beet sugar 4,939 4,939 4,444 4,444
Cane sugar 4,060 4,060 3,713 3,713
Florida 2,005 2,005 2,069 2,069
Hawaii 0 0 0 0
Louisiana 1,907 1,907 1,513 1,513
Texas 147 147 131 131
Imports 3,070 3,070 3,881 3,841
TRQ 3/ 1,541 1,541 1,604 1,674
Other program 4/ 438 438 350 350
Other 5/ 1,092 1,092 1,927 1,817
Mexico 1,000 1,000 1,827 1,717
Total supply 14,077 14,077 13,821 13,781
Exports 35 35 35 35
Deliveries 12,231 12,231 12,230 12,230
Food 12,106 12,106 12,125 12,125
Other 6/ 126 126 105 105
Miscellaneous 28 28 0 0
Total use 12,294 12,294 12,265 12,265
Ending stocks 1,783 1,783 1,556 1,516
Stocks to use ratio 14.5 14.5 12.7 12.4
1/ Fiscal years beginning Oct 1. Data and projections correspond to category
components from “Sweetener Market Data” (SMD). 2/ Production projections
for 2018/19 and 2019/20 are based on Crop Production and/or processor
projections/industry data where appropriate. 3/ For 2018/19 WTO raw
sugar TRQ shortfall (56) and for 2019/20 (40). 4/ Composed of sugar under
the re-export and polyhydric alcohol programs. 5/ Imports from Mexico;
and high-tier tariff sugar and syrups not otherwise specified — for
2018/19 (91) and 2019/20 (100). 6/ Transfers accompanying deliveries for
sugar-containing products to be exported (SCP) and polyhydric alcohol
manufacture (POLY) and deliveries for livestock feed and ethanol. Total
refiner license transfers for SCP and POLY inclusive of WASDE-reported
deliveries: 2017/18 — 278; estimated 2018/19 — 374; projected 2019/20 —
Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/
Fiscal Beginning Produc- Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
1000 Metric Tons, Actual Weight
Jan 1395 6426 85 4532 2204 1169
Feb 1395 6426 85 4532 2204 1169
Jan 1169 5772 89 4492 1603 934
Feb 1169 5672 89 4492 1502 936
WASDE – 597 – 17 February 2020
General Comments: New York closed mixed and London closed a little lower on currency considerations as the British Pound rallied. Ideas of less supplies available to the market are still around and are supporting the overall uptrend. Ivory Coast said that arrivals are now 1.435 million tons, down slightly from last year. Arrivals have been consistently ahead of last year until now. Harvest is now active in West Africa and the results so far are 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. 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. 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 higher today at 3.310 million bags.
Chart Trends: Trends in New York are up with objectives of 3100 March. Support is at 2890, 2850, and 2820 March, with resistance at 2950, 2980, and 3010 March. Trends in London are mixed to up with objectives of 2120 and 2240 March. Support is at 1990, 1950, and 1940 March, with resistance at 2040, 2060, and 2090 March.