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 closed lower on demand worries and in spite of deteriorating crop conditions in the Cotton Belt. Export sales were negative last week for old crop and were only slightly positive for new crop. There is concern that China will stop fulfilling its obligations in the Phase One trade deal due to ramped up US rhetoric on the Chinese response to the Coronavirus epidemic and now the unrest in Hong Kong. The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks. The retail demand has been slow to develop as many consumers got hurt economically due to stay at home orders during the height of the pandemic and have little disposable funds to spend on clothes. Demand will slowly improve but the industry should have plenty of supplies to work with in the short term.
Overnight News: The Delta will get mostly dry conditions and Southeast will get mostly dry conditions after showers today. Temperatures should be mostly below normal in the Delta and near to below normal in the Southeast. Texas will have dry conditions or isolated showers. Temperatures will average near to above normal. The USDA average price is now 55.98 ct/lb. ICE said that certified stocks are now 22,026 bales, from 19,750 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 6670 and 6820 July. Support is at 5970, 5940, and 5930 July, with resistance of 6230, 6250 and 6340 July.
General Comments: FCOJ closed a little higher after making new lows for the move. The market appears to be in a consolidation phase but is holding a weaker tone. Demand from grocery stores has remained strong in response to the increased consumer demand. Oranges production was estimated as less in the latest USDA reports at below 70 million boxes. Inventories in cold storage remain solid. There is increasing concern about the food service demand not improving even with the partial opening of the states. The weather in Florida is currently good for the crops. Southern areas are cooler and have seen more frequent showers. The tree condition is called good. The Valencia harvest is in full swing. Brazil has been dry and irrigation has been used.
Overnight News: Florida should get periods of showers. Temperatures will average near normal. Brazil should get dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 123.00, 121.00, and 120.00 July, with resistance at 129.00, 130.00, and 133.00 July.
General Comments: Futures were lower in both markets yesterday. London remains firmer than New York as Vietnamese producers still think prices are too cheap to sell into and as Indonesian producers have pulled back from the market for a while. Ideas of better European demand are helping London Robusta futures rally as are higher values for the Brazilian Real. The demand from coffee shops and other food service operations is improving but is still at very low levels. Consumers are still drinking Coffee at home, but many smaller roasters are actively trying to unload green coffee already bought a there are only a few outlets for sales at this time. The logistics of moving Coffee from Central and South America remain difficult. Producers have had trouble getting workers to pick the cherries and mills and processors have had trouble getting workers to staff the plants. Shipping logistics have improved but many are still having trouble getting the Coffee to ports to move to consumer nations.
Overnight News: ICE certified stocks are lower today at 1.733 million bags. The ICO daily average price is now 100.26 ct/lb. Brazil will get some isolated showers with above normal temperatures. Vietnam will see light to moderate showers.
Chart Trends: Trends in New York are mixed. Support is at 96.00, 95.00, and 92.00 July, and resistance is at 100.00, 102.00 and 105.00 July. Trends in London are up with no objectives. Support is at 1200, 1180, and 1150 July, and resistance is at 1260, 1280, and 1300 July.
DJ Brazil Coffee Exports Fell 23.4% in May to 3 Million Bags-Cecafe
By Jeffrey T. Lewis
SAO PAULO–Brazilian coffee exports dropped in May as stocks dried up ahead of the start of the 2020 harvest season, according to exporters group Cecafe.
The South American country exported 3 million 132-pound bags of coffee last month, a drop of 23.4% from the same month a year earlier, Cecafe said Wednesday. Sales abroad of the arabica variety of coffee fell 27.3% to 2.2 million bags, while exports of robusta beans rose 4.7% to 484,064 bags.
Sales abroad of ground, roasted and instant coffee fell 25.7% to 296,069 bags, Cecafe said.
Brazil has a two-year coffee production cycle in which output is bigger in even-numbered years and declines in odd-numbered years as the plants recover from the previous year. That left stocks at or near a historic low in recent months.
Brazil’s coffee harvest began recently, so more coffee will be available for export in coming months. Production for 2020 could achieve a record if it reaches the upper limit of crop agency Conab’s forecast.
The agency said in January that it expects coffee production of 57.2 million bags to 62 million bags. Cooxupe, Brazil’s biggest coffee cooperative, said last week it’s expecting an excellent year if good weather continues and there are no frosts.
General Comments: New York was mixed and London closed higher. White Sugar futures in London have been the strength of the market lately. The Brazil mills are producing Sugar but might switch back to producing ethanol soon if prices continue to improve for the ethanol. Reports indicate that little is on offer from India in part due to logistical and harvest problems caused by the Coronavirus. India is thought to have a very big crop of Sugarcane this year but getting it into Sugar and into export position has become extremely difficult. These problems should ease as the attack of the virus eases in the country. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. There are reduced flows from rivers from China as well.
Overnight News: Brazil will get a dry week or maybe isolated showers. Temperatures should average near to above normal.
Chart Trends: Trends in New York are up with objectives of 1310 and 1420 October. Support is at 1180, 1130, and 1120 October, and resistance is at 1230, 1260, and 1290 October. Trends in London are up with objectives of 408.00 August. Support is at 384.00, 379.00, and 370.00 August, and resistance is at 398.00, 400.00, and 405.00 August.
General Comments: New York and London closed higher. Harvest is now over for the main crop in West Africa and the results so far are very good. The reports from West Africa imply that a big harvest in the region. However, the Midcrop could be less due to dry weather earlier in the season. Ideas are that Southeast Asia also has good crops.
Overnight News: Isolated to scattered showers are forecast for West Africa. Temperatures will be near 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 4.238 million bags. The midcrop is looking at good weather conditions in West Africa.
Chart Trends: Trends in New York are mixed to up with objectives of 2570 and 2650 July. Support is at 2420, 2370, and 2330 July, with resistance at 2510, 2580, and 2650 July. Trends in London are mixed to down with objectives of 1870 and 1820 July. Support is at 1850, 1830, and 1810 July, with resistance at 1890, 1910, and 1940 July.