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 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, but signs indicate that the virus is now affecting less new people on a daily basis, so there are new hopes of demand. 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, but factories are open and people are working again.
Overnight News: The Delta and Southeast should see mostly dry conditions. Temperatures should average near to above normal after some cold weather over the next couple of days. Texas will have mostly dry weather. Temperatures will trend to near to above normal. The USDA average price is now 64.15 ct/lb. ICE said that certified stocks are now 32,066 ba1es, from 32,066 bales yesterday. USDA said that net Upland Cotton export sales were 350,900 bales this year and 57,300 bales next year. Net Pima sales were 10,900 baales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed o up with objectives of 7000 and 7140 March. Support is at 6800, 6780, and 6710 March, with
resistance of 6910, 6990, and 7090 March.
General Comments: FCOJ was lower and is now testing the breakout levels. The price action has become very strong until yesterday. 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 96.00, 95.00, and 92.00 March, with resistance at 100.00, 102.00, and 105.00 March.
General Comments: Futures were higher in New York and lower in London on a lack of news and despite ideas of good growing conditions in Brazil. The chart trends are mixed to sideways in New York and in London due to the big production ideas, and 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 and showers are continuing. The Brazilian crop is developing well. 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 lower today at 2.165 million bags. The ICO daily average price is now 99.20 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 up with objectives of 1640 March. Support is at 1540, 1510, and 1500 March, and resistance is at 1610, 1640, and 1670 March. Trends in London are up with no objectives. Support is at 438.00, 428.00, and 420.00 March, and resistance is at 435.00, 458.00, and 461.00 March.
General Comments: New York and London closed a little lower on currency considerations. 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 mixed to up with objectives of 3100 March. Support is at 2850, 2820, and 2770 March, with resistance at 2950, 2980, and 3010 March. Trends in London are mixed to down with objectives of 1950, 1900, and 1840 March. Support is at 1950, 1940, and 1910 March, with resistance at 2000, 2040, and 2060 March.