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 higher in consolidation trading. The USDA production and supply and demand reports will be out Friday and the trade expects lower production and ending stocks estimates. Demand has improved over the last couple of weeks but remains at depressed levels. The export sales report showed better sales to China but not that much beyond that. Demand should stay week as long as the Coronavirus is a feature of life around the world. Shopping is hard to do and many people are still unemployed. This is especially true for the US but it is true to some degree in just about all countries. The supply losses are in the market now. However, the harvest is still a ways down the road and the tropical season is active. There will be more chances to inflict more damage on the crops to help try to rally prices.
Overnight News: The Delta will get mostly dry conditions and Southeast will get isolated showers. Temperatures should be near to above normal. Texas will have scattered showers. Temperatures will average below normal. The USDA average price is now 58.67 ct/lb. ICE said that certified stocks are now 5,913 bales, from 5,913 bales yesterday. USDA said that net weekly Upland Cotton export sales were 126,700 bales this year and 70,400 bales next year. Net Pima sales were 17,400 bales this year and 700 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 6340, 6230, and 6200 December, with resistance of 6550, 6600 and 6640 December.
General Comments: FCOJ was higher. The daily and weekly charts show that trends are sideways. No hurricanes have hit Florida yet. That usually means lower prices for futures but prices are already relatively cheap. The Coronavirus is still promoting consumption of FCOJ at home. Restaurant and food service demand has been much less as no one is really dining out. Florida production prospects for the new crop were hurt by an extended flowering period, but the weather is good now with frequent showers to promote good tree health and fruit formation. Import demand to the US should be minimal as US prices remain below those of Europe. Brazil has been too dry and irrigation is being used. Some showers are in the region now to help in Sao Paulo.
Overnight News: Florida should get scattered showers. Temperatures will average above normal. Brazil should get dry conditions and near normal temperatures. ICE said that 0 notices were posted against September contracts for delivery and that deliveries for the month are now 273 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 114.00, 113.00, and 110.00 November, with resistance at 121.00, 126.00, and 129.00 November.
General Comments: Both markets closed higher. The US Dollar was lower although it is still in a trading range. Certified stocks are dropping in New York and have dropped a lot in the last two days. London has been the leader on the longer term rally as demand for Robusta has improved with people staying at home. Vietnam was dry during flowering time but showers are falling now. Production ideas are lower. The demand from coffee shops and other food service operations is still at very low levels. Consumers are still drinking Coffee at home and the Coronavirus outbreak will keep things that way. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. Europe is emerging from lock downs but Covid cases are spiking there. The Brazil harvest is almost over but shipping has become difficult due to the widespread outbreak of the Coronavirus there. Even so, the ports are operating normally. Ideas are that production will be very strong this year as it is the on year for the trees. The strong production ideas are coming despite hot and dry weather seen in the country at flowering time.
Overnight News: ICE certified stocks are lower today at 1.133 million bags. The ICO daily average price is now 122.67 ct/lb. Brazil will get mostly dry conditions with above normal temperatures. Vietnam will see light to moderate showers. ICE said that 0 notices were posted for delivery against September futures and that total deliveries for the month are now 450 contracts.
Chart Trends: Trends in New York are mixed. Support is at 127.00, 123.00, and 121.00 December, and resistance is at 135.00, 137.00 and 138.00 December. Trends in London are mixed to down with objectives of 1380 and 1330 November. Support is at 1400, 1380, and 1370 November, and resistance is at 1440, 1470, and 1480 November.
General Comments: New York and London closed lower on speculative and fund related selling. Chart trends are sideways to down in both markets. Unica said that the crush was lower. The ISO said s week ago that Sugar supply and demand were in balance for this crop year but a supply deficit is possible next year. The ISO news for the current year appeared to be enough to start to turn trends down. CONAB noted in its most recent report that Brazilian mills are producing more Sugar and less Ethanol this year due to reduced Ethanol demand. Ideas are that there is plenty of Sugar for the world market. India is thought to have a very big crop of Sugarcane this year but getting it into Sugar and into export position has become very difficult due to Coronavirus lock downs. Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season. There are reduced flows from rivers from China to hinder irrigation of the crops.
Overnight News: Brazil will get dry conditions. Temperatures should average above normal.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 1240, 1230, and 1220 March, and resistance is at 1290, 1300, and 1310 March. Trends in London are mixed to down with objectives of 353.00 December. Support is at 351.00, 347.00, and 345.00 December, and resistance is at 360.00, 364.00, and 367.00 December.
DJ Brazil Sugar Crush Down 12.2% in 2H Aug as Wet Weather Slowed Harvest
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the second half of August compared with a year earlier, as rainy weather slowed harvesting work in some areas, according to industry group Unica.
Center-south mills crushed 42.1 million metric tons of cane in the period, a decrease of 12.2% from the same period a year earlier. They produced 2.9 million tons of sugar, up 16.3%, and made 2.2 billion liters of ethanol, a decline of 21%.
Brazil’s center-south produces about 90% of the country’s sugar cane, and mills in the region have boosted output of sugar and reduced ethanol production this year amid better prices for the sweetener on world markets.
A sharp decline in demand for ethanol, with sales by center-south mills down by 13.3% in August from a year earlier, was due to a drop in economic activity because of the coronavirus health crisis and has also encouraged mills to switch to greater sugar production.
The production mix for the second half of August was 46.8% sugar to 53.2% ethanol, compared with 36.5% sugar and 63.5% ethanol in the same period a year ago.
In the season from April 1 through Sep. 1, mills in the region crushed 415.1 million tons of cane, up 3.8% from the same period a year earlier. Sugar production rose 43.8% to 25.9 million tons, and ethanol output fell 8.4% to 19 billion liters.
The production mix for the season through Sep. 1 was 47% sugar to 53% ethanol, compared with 35.5% sugar and 64.5% ethanol in the same period a year ago.
General Comments: New York closed lower and London closed mixed. The US Dollar was also lower. The charts show that both markets turned trends down for at least the short term. The current crop features strong production but there are worries about the next crop. It was dry in West Africa but the rains are back now and the situation is better. There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US. Europe is still trying to open its markets again but the Coronavirus is still around and consumers are reluctant to buy. 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 3.735 million bags. ICE said that 0 notices were posted for delivery today against September futures and that total deliveries for the month are now 897 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 2450, 2380, and 2320 December. Support is at 2520, 2500, and 2470 December, with resistance at 2590, 2650, and 2710 December. Trends in London are mixed to down with objectives of 1740, 1690, and 1630 December. Support is at 1760, 1730, and 1700 December, with resistance at 1830, 1850, and 1880 December.