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 higher in recovery trading and on the back of US Dollar weakness, but then moved to close lower. The selling came in part due to a delayed response to the shocks caused by the Coronavirus and in part due to the very weak performance of the stock indexes. The Coronavirus has the chance to hurt trade in Cotton between the US and China. Chinese buyers might need less Cotton now as factories inside their country were closed for an extended holiday. All are reopen now, but the manufacturing pace has been slow. A strong US Dollar hurts trade anywhere and pushes buying to alternative growths like Brazil. Brazil has the quality to compete with the US and the Real is much cheaper than the US Dollar right now.
Overnight News: The Delta and Southeast should see some big rains today and tomorrow. Temperatures should average near to above normal. Texas will have showers through Thursday, then mostly dry weather. Temperatures will trend to near to below normal. The USDA average price is now 57.45 ct/lb. ICE said that certified stocks are now 37,522 bales, from 37,522 bales yesterday. ICE said that 0 notices were posted for delivery against March Cotton contracts and that total deliveries for the month are now 359 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 6280, 6220, and 6170 May, with resistance of 6490, 6510 and 6600 May.
General Comments: FCOJ was slightly lower in range trading. Futures have really recovered from the lows set previously, but there does not seem to be a good reason why to move the market much higher at this time. 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 kept prices weaker. The weather has been great for the trees, but many areas have been dry lately and irrigation is being used. Crop yields and quality should be high for Florida this year. Inventories of FCOJ in the state are high and are more than 23% above last year. The year to year percentage change has decreased as the increase in inventories happened last year and has held high this year. Dry weather is still a problem in Mexico, but Brazil growing conditions are called good.
Overnight News: Florida should get mostly dry conditions except for some showers on late Thursday and early 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 mixed. Support is at 96.00, 92.00, and 91.00 May, with resistance at 100.00, 103.00, and 104.00 May.
General Comments: Futures were much higher in New York and in London. It has been a New York rally for the last few sessions, but London joined yesterday. The weaker US Dollar once again helped support Coffee and other commodity futures. Support came from a lack of supply in Brazil at this time and on concern that previous bad growing conditions have hurt production potential in the Cerrado, home of about 10% of all Brazil production. Many producers and exporters have run out of Coffee in storage to sell. The chart trends are up in New York on the lack of supply and mixed in London due to the big production ideas. Rains were reported in Brazil Coffee areas over the weekend and showers are continuing through this weekend. 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. Vietnam exports remain behind a year ago. Vietnamese crops are expected to be big despite uneven growing conditions earlier in the year.
Overnight News: ICE certified stocks are lower today at 2.127 million bags. The ICO daily average price is now 112.05 ct/lb. Brazil will get scattered showers, mostly in Minas Gerais, with near normal temperatures. Vietnam will see mostly dry conditions in the south and some light to moderate showers in the north. ICE said that 21 notices were posted for delivery against March contracts and tat total deliveries for the month are now 1,270 contracts.
Chart Trends: Trends in New York are up with objectives of 130.00 May. Support is at 116.00, 1012.00, and 107.00 May, and resistance is at 125.00, 127.00 and 129.00 May. Trends in London are up with objectives of 1360 May. Support is at 1300, 1270, and 1260 May, and resistance is at 1340, 1360, and 1380 May.
General Comments: New York and London closed lower again. Petroleum markets were firm, but are still trading at levels well below those seen before the Coronavirus hit the world. The weaker petroleum futures markets overall make higher priced ethanol that much more expensive to blend and cuts demand. That makes more Sugarcane available for processing into Sugar. The mills are trying to cover the lack of White Sugar in the market. 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. 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 at this time.
Overnight News: Brazil will get scattered showers mostly in Minas Gerais. Temperatures should be near normal.
Chart Trends: Trends in New York are down with objectives of 1370 May. Support is at 1350, 1320, and 1300 May, and resistance is at 1400, 1440, and 1450 May. Trends in London are down with no objectives. Support is at 386.00, 379.00, and 370.00 May, and resistance is at 391.00, 398.00, and 400.00 May.
General Comments: New York and London closed a little lower. Funds and other speculators were net sellers. Harvest is now almost over for the main crop in West Africa and the results so far are very good. Ideas are that demand is currently strong but less than before. The reports from West Africa imply that a big harvest is possible in the region. Ivory Coast arrivals are strong and are above year ago levels. The weather in Ivory Coast is good. The weather is too dry in Ghana and Nigeria and there are fears that the mid crop is not developing well at this time.
Overnight News: Mostly dry conditions are forecast for West Africa, but showers are possible in coastal areas. 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 3.742 million bags. ICE said that 3 notices were posted for delivery against March futures and that total deliveries for the month are now 730 contracts.
Chart Trends: Trends in New York are down with objectives of 2610 May. Support is at 2620, 2580, and 2550 May, with resistance at 2700, 2740, and 2790 May. Trends in London are down with objectives of 1920 and 1840 May. Support is at 1930, 1910, and 1880 May, with resistance at 1980, 2000, and 2030 May.
DJ Harmattan Wind Ends in Nigeria, Leaving Cocoa in Poor Condition Official, Trader
By Obafemi Oredein
IBADAN, Nigeria–The seasonal Harmattan wind has ended in Nigeria’s two cocoa-producing regions, with the crop left in a poor condition, industry officials and traders said Wednesday.
“It [harmattan] is over, one noticeable impact was on poor germination of cocoa nurseries due to excessive heat in February,” said Toba Adenowuro, a cocoa desk officer in the Ministry of Agriculture, Akure, Ondo state, the country’s largest cocoa-producing area.
The harmattan, a dry, cold and dusty wind which emanates from the Sahara Desert and blows over West Africa began in Nigeria’s southwest and southeast regions in mid-December.
“It stopped blowing in Nigeria at the beginning of the week,” said Bayo Aluko, a trader in Ibadan, capital of Oyo state in the southwest region.
Robo Adhuze, an official of the Cocoa Association of Nigeria said the harmattan hampered the growth of cocoa pods as well as caused poor quality beans.
“Bean weight was severely impacted as there was dryness across the farms. It has graduated to a dry spell,” he said.
He said the harmattan dried moisture from the soil, putting cocoa trees under stress and impeded the development of new leaves and flowers that would have turned into midcrop cocoa pods.
Mr. Robo said a lack of rainfall from November until last Sunday hindered midcrop cocoa development, resulted in the shrinking of the sizes of beans of the main crop whose harvest ended unexpectedly in December in most parts of the country.
A dry spell is currently on in the cocoa regions and it has led to the slow development of the midcrop, he said.
The southwest received its first rainfall on Sunday but the southeast cocoa region remains without rainfall since November, traders said.
The current dry season is expected to end in April while the rainy season usually starts in May until October, providing ample rainfall for the development of the maincrop cocoa that is harvested from September to January or February.