Softs Report 01/13/2021

COTTON       

General Comments:  Cotton closed higher and near the highs of the day in response to the USDA reports.  USDA cut production by another 1.0 million bales and increased export demand.  Domestic demand was trimmed a bit, but ending stocks dropped sharply.  Traders had expected USDA to drop production and ending stocks estimates, but not by as much as USDA did.  The US weather outlook calls for drier and colder weather for Texas after some big snows over the weekend.  It should be colder in the Delta and Southeast as well.  Attention for overseas weather has turned south and it is dry in Bahia, Brazil

Overnight News:  The Delta and Southeast will get mostly dry conditions or isolated showers.  Temperatures should average near normal.  Texas will have mostly dry conditions and mostly near normal temperatures.  The USDA average price is now 77.34 ct/lb.  ICE said that certified stocks are now 68,681 bales, from 68,681 bales yesterday.

Chart Trends:  Trends in Cotton are up with objectives of 8270 and 8540 March.  Support is at 8040, 7960, and 7870 March, with resistance of 8190, 9020 and 9050 March.

U.S. Cotton Supply and Use  1/

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2018/19   2019/20 Est.  2020/21 Proj.  2020/21 Proj.

Item                                                          Dec            Jan

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Million Acres

Planted                     14.10          13.74          12.12          12.09

Harvested                    9.99          11.61           9.01           8.70

 

Pounds

Yield per Harvested

Acre                         882            823            850            825

 

Million 480 Pound Bales

Beginning Stocks               4.20           4.85           7.25           7.25

Production                    18.37          19.91          15.95          14.95

Imports                        0.00           0.00           0.00           0.00

Supply, Total               22.57          24.77          23.20          22.21

Domestic Use                   2.98           2.15           2.50           2.40

Exports, Total                14.84          15.53          15.00          15.25

Use, Total                  17.81          17.68          17.50          17.65

Unaccounted 2/                -0.09          -0.16           0.00          -0.04

Ending Stocks                  4.85           7.25           5.70           4.60

Avg. Farm Price 3/             70.3           59.6           65.0           68.0

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WASDE – 608 – 18                    January 2021

 

World Cotton Supply and Use  1/

(Million 480-Pound Bales)

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Supply                Use

Region                 Beginning Produc-                            Loss  Ending

Stocks    tion Imports Domestic Exports    2/   Stocks

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2020/21 Proj.

World

Dec   99.42  113.90   43.17  115.63   43.21    0.14   97.52

Jan   99.28  112.87   43.55  115.73   43.56    0.09   96.32

World Less China

Dec   62.52   86.40   33.17   77.63   43.08    0.14   61.25

Jan   62.38   85.37   33.05   77.23   43.43    0.09   60.04

United States

Dec    7.25   15.95      3/    2.50   15.00    0.00    5.70

Jan    7.25   14.95      3/    2.40   15.25   -0.04    4.60

Total Foreign

Dec   92.17   97.95   43.16  113.13   28.21    0.13   91.82

Jan   92.03   97.91   43.54  113.33   28.31    0.13   91.72

Major Exporters  4/

Dec   40.72   57.26    1.71   32.88   24.36    0.02   42.44

Jan   40.48   57.17    1.71   32.88   24.31    0.02   42.15

Major Importers  8/

Dec   48.97   37.53   38.91   76.29    2.43    0.11   46.58

Jan   49.07   37.58   39.33   76.53    2.58    0.11   46.76

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WASDE – 608 – 28                    January 2021

FCOJ 

General Comments:  FCOJ closed a little lower despite reduced production estimates from USDA.  The reaction to the report shows that demand is becoming more of a problem for FCOJ.  The weather in Florida remains good for the crops although it has been cold recently.  The Coronavirus is still promoting consumption of FCOJ at home.  Restaurant and food service demand has been much less as no one is dining out.  The weather in Florida is good with frequent showers to promote good tree health and fruit formation.  Brazil has been too dry and irrigation is being used.  Showers are falling in Brazil now and these need to continue to ensure good tree health.  However, it could turn warm and dry again next week.  Mexican crop conditions are called good with rains.

Overnight News:  Florida should get isolated showers or dry conditions.  Temperatures will average near normal.   Brazil should get scattered showers and near to above normal temperatures.   ICE said that 0 notices were posted for delivery against January contracts today and that total deliveries for the month are now 0 contracts.

Chart Trends:  Trends in FCOJ are mixed.  Support is at 120.00, 116.00, and 110.00 March, with resistance at 124.00, 127.00, and 128.00 March.

 

Orange Production Down 2 Percent from December Forecast

 

The United States all orange forecast for the 2020-2021 season is

4.53 million tons, down 2 percent from the previous forecast and

down 13 percent from the 2019-2020 final utilization. The Florida all orange

forecast, at 54.0 million boxes (2.43 million tons), is down 4 percent from

the previous forecast and down 20 percent from last season’s final

utilization. In Florida, early, midseason, and Navel varieties are forecast

at 20.0 million boxes (900,000 tons), down 9 percent from the previous

forecast and down 33 percent from last season’s final utilization. The

Florida Valencia orange forecast, at 34.0 million boxes (1.53 million tons),

is unchanged from the previous forecast but down 10 percent from last

season’s final utilization.

 

The California all orange forecast is 51.0 million boxes (2.04 million tons),

up 1 percent from the previous forecast but down 4 percent from last season’s

final utilization. The California Navel orange forecast is 42.0 million boxes

(1.68 million tons), is unchanged from the previous forecast but

down 5 percent from last season’s final utilization. The California Valencia

orange forecast is 9.0 million boxes (360,000 tons), is up 6 percent from the

previous forecast but unchanged from last season’s final utilization. The

Texas all orange forecast, at 1.50 million boxes (64,000 tons), is unchanged

from the previous forecast but up 12 percent from last season’s final

utilization.

 

COFFEE   

General Comments:  Futures were little changed in New York and lower in London on forecasts for good weather in Brazil and Vietnam.  The market is looking ahead to next year and Brazil has been dry for flowering and initial fruit development.  Sufficient rains are falling now to support crops.  Vietnam has harvested its production under mostly dry conditions.  Some of those crops are starting to hit the market.  Central America is also drier for harvesting.  The demand from coffee shops and other food service operations is still at very low levels as consumers are still drinking Coffee at home.  Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica.  The weather is good in Colombia and Peru.

Overnight News:  ICE certified stocks are higher today at 1.516 million bags.  The ICO daily average price is now 113.01 ct/lb.  Brazil will get scattered showers with near to above normal temperatures.  Central America will get scattered showers or dry conditions.  Vietnam will see mostly dry conditions.

Chart Trends:  Trends in New York are mixed to down with objectives of 112.00 March.  Support is at 119.00, 116.00, and 113.00 March, and resistance is at 125.00, 129.00 and 130.00 March.  Trends in London are mixed to down with objectives of 1310 March.   Support is at 1290, 1260, and 1230 March, and resistance is at 1340, 1360, and 1380 March.

SUGAR                 

General Comments:  New York and London closed lower.  It has been raining in south central Brazil and the production of cane is winding down for the season.  The rains have come late to the region.  Production has been hurt due to dry weather earlier in the year.  India has a very big crop of Sugarcane this year but no exports are coming out.  Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season.  The EU is having problems with its Sugarbeets crop due to weather and disease.  Coronavirus has returned to the world and has caused some demand concerns, especially for Ethanol.

Overnight News:  Brazil will get scattered showers.  Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed.  Support is at 1540, 1510, and 1490 March, and resistance is at 1600, 1630, and 1660 March.  Trends in London are mixed to up with no objectives.  Support is at 433.00, 425.00, and 421.00 March, and resistance is at 444.00, 447.00, and 450.00 March.

DJ Brazil Center-South Sugar Crush Down 38.2% at 453,000 Tons in 2H Dec., Unica Says 

By Jeffrey T. Lewis

SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the second half of December compared with a year earlier as the processing season winds to a close, according to industry group Unica.

Center-south mills crushed 453,000 metric tons of cane in the period, a decrease of 38.2% from the same period a year earlier. They produced 11,000 tons of sugar, down 13.7%, and made 146 million liters of ethanol, an increase of 6.6%

The production mix for the second half of December was 16.9% sugar to 83.1% ethanol, compared with 14.4% sugar and 85.6% ethanol in the same period a year ago.

The center-south produces about 90% of Brazil’s sugar cane, and the region’s mills are shutting down for maintenance and cleaning as the cane harvest approaches an end. Only 10 center-south mills are scheduled to continue production in January, with 258 closed, and five of those produce ethanol from corn and not cane, Unica said.

In the season from April 1 through Dec. 31, mills in the region crushed 597.4 million tons of cane, up 3.2% from the same period a year earlier. Sugar production rose 44.2% to 38.2 million tons, and ethanol output fell 8.9% to 29.3 billion liters.

The production mix for the season through Dec. 31 was 46.2% sugar to 53.8% ethanol, compared with 34.5% sugar and 65.5% ethanol in the same period a year ago.

 

U.S. Sugar Supply and Use  1/

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2018/19  2019/20 Est. 2020/21 Proj. 2020/21 Proj.

Item                                                           Dec           Jan

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1000 Short Tons, Raw Value

Beginning Stocks                  2008          1783          1618          1618

Production 2/                     8999          8149          8960          9156

Beet Sugar                      4939          4351          4859          4992

Cane Sugar                      4060          3798          4101          4163

Florida                       2005          2106          2135          2135

Hawaii                           0             0             0             0

Louisiana                     1907          1566          1824          1886

Texas                          147           126           142           142

Imports                           3070          4235          3428          3344

TRQ 3/                          1541          2152          1808          1721

Other Program 4/                 438           432           350           350

Other 5/                        1092          1651          1270          1273

Mexico                        1000          1376          1160          1163

Total Supply               14077         14166         14006         14117

Exports                             35            61            35            35

Deliveries                       12231         12414         12305         12305

Food                           12106         12316         12200         12200

Other 6/                         126            98           105           105

Miscellaneous                       28            74             0             0

Total Use                  12294         12549         12340         12340

Ending Stocks                     1783          1618          1666          1777

Stocks to Use Ratio               14.5          12.9          13.5          14.4

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Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/

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Supply                Use

Fiscal                  Beginning  Produc-  Imports Domestic  Exports   Ending

Year                      Stocks     tion               2/             Stocks

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1000 Metric Tons, Actual Weight

 

Sugar

2019/20 Est.

Dec                          1169     5278       77     4455     1212      858

Jan                          1169     5278       77     4455     1212      858

2020/21 Proj.

Dec                           858     5950      105     4488     1490      935

Jan                           858     5950      105     4488     1490      935

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WASDE – 608 – 17                    January 2021

 

COCOA                

General Comments:  New York and London closed a little higher as the market searches for a bottom in this area.  Importers are still looking for ways to source Cocoa without paying a premium demanded by Ivory Coast and Ghana.  Both countries have instituted a living wage for producers there and are looking to tax exports to pay the increased wages.  Buyers have been accused of using certified stocks from the exchange instead of buying from origin.  Origin has ample supplies to sell right now.  There are a lot of demand worries as the Coronavirus is making a comeback in the US.  Europe is also seeing a return of the pandemic.  The next grind data is due out over the next couple of weeks.

Overnight News:  Mostly dry conditions 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 higher today at 3.160 million bags.

Chart Trends:  Trends in New York are mixed to down with objectives of 2440 and 2400 March.  Support is at 2470, 2440, and 2410 March, with resistance at 2530, 2550, and 2600 March.  Trends in London are mixed.  Support is at 1660, 1620, and 1610 March, with resistance at 1720, 1750, and 1780 March.

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