About The Author

Jack Scoville

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

COTTON
General Comments Cotton closed a little lower on demand worries and in spite of deteriorating crop conditions in the Cotton Belt. USDA showed a sharp increase in ending stocks estimates in its world data. It made no real changes in its domestic supply and demand ideas. Export sales were sharply higher in the weekly USDA reports yesterday but got ignored due to the release of the supply and demand estimates and big weakness in the stock market due to worries about the economic recovery that could stall. 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 55.48 ct/lb. ICE said that certified stocks are now 24,615 bales, from 22,026 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.

DJ On-Call Cotton – Jun 11
As of Jun 5. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Jul 20 16,325 22,958 -6,633 6,940 14,578 -7,638
Oct 20 0 0 0 0 0 0
Dec 20 27,709 26,410 1,299 22,558 23,319 -761
Mar 21 18,582 17,290 1,292 6,694 6,130 564
May 21 8,433 6,840 1,593 2,143 1,134 1,009
Jul 21 11,319 10,857 462 1,628 1,392 236
Dec 21 6,093 6,160 -67 8,775 8,474 301
Mar 22 837 837 0 13 13 0
May 22 100 100 0 0 0 0
Jul 22 50 50 0 0 0 0
Dec 22 0 0 0 7 7 0
Dec 23 0 0 0 7 7 0
Total 89,448 91,502 -2,054 48,765 55,054 -6,289
Open Open Change
Int Int
Jul 20 55,868 82,704 -26,836
Oct 20 43 36 7
Dec 20 92,452 75,382 17,070
Mar 21 16,740 14,818 1,922
May 21 3,733 4,042 -309
Jul 21 5,228 5,289 -61
Dec 21 10,394 10,090 304
Mar 22 82 82 0
May 22 3 2 0
Jul 22 6 6 0
Dec 22 3 3 0
Dec 23 0 0 0
Total 184,552 192,454 -7,902

U.S. Cotton Supply and Use 1/
================================================================================
2018/19 2019/20 Est. 2020/21 Proj. 2020/21 Proj.
Item May Jun
================================================================================
Million Acres
Planted 14.10 13.74 13.70* 13.70*
Harvested 9.99 11.61 11.35* 11.35*
Pounds
Yield per Harvested
Acre 882 823 825* 825*
Million 480 Pound Bales
Beginning Stocks 4.20 4.85 7.10 7.30
Production 18.37 19.91 19.50 19.50
Imports 0.00 0.01 0.01 0.01
Supply, Total 22.57 24.77 26.61 26.81
Domestic Use 2.98 2.50 2.90 2.80
Exports, Total 14.76 15.00 16.00 16.0
Use, Total 17.74 17.50 18.90 18.80
Unaccounted 2/ -0.02 -0.03 0.01 0.01
Ending Stocks 4.85 7.30 7.70 8.00
Avg. Farm Price 3/ 70.3 59.0 57.0 57.0
================================================================================
WASDE – 601 – 18 June 2020

World Cotton Supply and Use 1/
(Million 480-Pound Bales)
================================================================================
Supply Use
Region Beginning Produc- Loss Ending
Stocks tion Imports Domestic Exports 2/ Stocks
================================================================================
2020/21 Proj.
World
May 97.16 118.95 42.84 116.46 42.93 0.14 99.43
Jun 100.56 118.74 42.82 114.41 42.90 0.14 104.67
World Less China
May 60.92 92.45 33.34 78.46 42.81 0.14 65.31
Jun 63.31 92.24 33.82 77.41 42.78 0.14 69.05
United States
May 7.10 19.50 0.01 2.90 16.00 0.01 7.70
Jun 7.30 19.50 0.01 2.80 16.00 0.01 8.00
Total Foreign
May 90.06 99.45 42.84 113.56 26.93 0.13 91.73
Jun 93.26 99.24 42.81 111.61 26.90 0.13 96.67
Major Exporters 4/
May 40.03 56.58 1.81 32.64 22.82 0.02 42.95
Jun 41.83 56.79 1.81 32.04 22.88 0.02 45.50
Major Importers 8/
May 47.09 39.78 38.58 76.94 2.63 0.11 45.76
Jun 48.47 39.35 38.56 75.60 2.53 0.11 48.14
================================================================================
WASDE – 601 – 28 June 2020

FCOJ
General Comments: FCOJ closed a little higher on follow through speculative buying tied to reduced Oranges production estimates from USDA. USDA is now forecasting a crop of less than 68 million boxes in Florida. Demand from grocery stores has remained strong in response to the increased consumer demand. Inventories in cold storage remain solid and should be showing a seasonal increase due to the harvest. 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 to up with objectives of 132.00, 13.400, and 141.00 July. Support is at 126.00, 124.00, and 123.00 July, with resistance at 132.00, 133.00, and 136.00 July.

The United States all orange forecast for the 2019-2020 season is
5.08 million tons, down 2 percent from the previous forecast and
down 6 percent from the 2018-2019 final utilization. The Florida all orange
forecast, at 67.7 million boxes (3.04 million tons), is down 3 percent from
the previous forecast and down 6 percent from last season’s final
utilization. In Florida, early, midseason, and Navel varieties are forecast
at 29.7 million boxes (1.33 million tons), unchanged from the previous
forecast but down 2 percent from last season’s final utilization. The Florida
Valencia orange forecast, at 38.0 million boxes (1.71 million tons), is
down 5 percent from the previous forecast and 8 percent below last season’s
final utilization. California and Texas orange production forecasts were
carried forward from the previous forecast.

COFFEE
General Comments: Futures were lower in New York and in London. Trends in New York have turned down as the Brazil harvest accelerates and London trends are sideways. 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. New York is also feeling increasing harvest progress in Brazil even though May exports were down quite a bit. 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. The recent drop in certified stocks in New York suggests thqat Arabica prices are too cheap when compared to the cash market.
Overnight News: ICE certified stocks are lower today at 1.682 million bags. The ICO daily average price is now 98.91 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 to down with objectives of 91.00 and 86.00 July. Support is at 95.00, 92.00, and 89.00 July, and resistance is at 98.00, 100.00 and 102.00 July. Trends in London are mixed. Support is at 1180, 1150, and 1130 July, and resistance is at 1230, 1260, and 1280 July.

DJ Vietnam Coffee Production Expected to Fall Due to Weather — Market Talk
0342 GMT – Vietnam’s coffee production is expected to fall 3.5% in 2020/2021 to 30.2 million bags due to unfavorable weather conditions, says the U.S. Department of Agriculture in a note. It adds that Vietnamese coffee exports for the current year are expected to be 8% lower on the prior forecast at 23.5 million bags due to competition from foreign markets. (lucy.craymer@wsj.com)

SUGAR
General Comments: New York and London closed lower partly on the back of much weaker petroleum prices and partly on fears of demand after the recent run to higher prices for White Sugar futures in London. 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 petroleum markets can recover and move higher. 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 mixed to up with objectives of 1310 and 1420 October. Support is at 1180, 1130, and 1120 October, and resistance is at 1260, 1290, and 1300 October. Trends in London are mixed. Support is at 384.00, 379.00, and 370.00 August, and resistance is at 398.00, 400.00, and 405.00 August.

U.S. Sugar Supply and Use 1/
================================================================================
2018/19 2019/20 Est. 2020/21 Proj. 2020/21 Proj.
Item May Jun
================================================================================
1000 Short Tons, Raw Value
Beginning Stocks 2008 1783 1273 1632
Production 2/ 8999 8024 9005 9005
Beet Sugar 4939 4285 4965 4965
Cane Sugar 4060 3740 4040 4040
Florida 2005 2100 2105 2105
Hawaii 0 0 0 0
Louisiana 1907 1513 1800 1800
Texas 147 127 135 135
Imports 3070 4015 3456 3097
TRQ 3/ 1541 2180 1395 1395
Other Program 4/ 438 350 350 350
Other 5/ 1092 1485 1710 1351
Mexico 1000 1255 1660 1301
Total Supply 14077 13822 13733 13733
Exports 35 35 35 35
Deliveries 12231 12155 12230 12230
Food 12106 12050 12125 12125
Other 6/ 126 105 105 105
Miscellaneous 28 0 0 0
Total Use 12294 12190 12265 12265
Ending Stocks 1783 1632 1468 1468
Stocks to Use Ratio 14.5 13.4 12.0 12.0
================================================================================
Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/
================================================================================
Supply Use
Fiscal Beginning Produc- Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
===============================================================================
1000 Metric Tons, Actual Weight
Sugar
2019/20 Est.
May 1169 5125 89 4492 938 953
Jun 1169 5230 89 4422 1113 953
2020/21 Proj.
May 953 6100 89 4575 1614 953
Jun 953 6100 89 4575 1614 953
================================================================================
WASDE – 601 – 17 June 2020

COCOA
General Comments: New York and London closed sharply lower and trends are down in both markets for the short term. New York is showing a double top on the charts at about 2300 July. There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US. 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. Arrivals are on a pace about the same as last year. 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 4.235 million bags. The midcrop is looking at good weather conditions in West Africa.
Overnight News:
Chart Trends: Trends in New York are mixed to down with objectives of 2310, 2090, and 2040 July. Support is at 2330, 2310, and 2280 July, with resistance at 2450, 2510, and 2540 July. Trends in London are down with objectives of 1820 July. Support is at 1830, 1810, and 1790 July, with resistance at 1860, 1890, and 1910 July.

Questions? Ask Jack Scoville today at 312-264-4322