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: Futures were higher in range trading on weather concerns. Trends are still mostly up on the daily charts. USDA released its monthly WASDE updates and the market found the reports a little bearish for a while as prices fell mid day. However, the potential for reduced production this year kept the market moving higher by the close. The reports highlight a potentially tight ending stocks scenario for the current and the next crop year. Cotton growing conditions have improved with rains reported in West Texas and the Delta. Some say West Texas is now too wet. It is dry in the southeast. Production ideas are being impacted in just about all areas due to the weather extremes. Delta crop conditions are called good. Cotton demand remains solid although weaker this week. Ideas are that Cotton demand can hold strong after a positive export sales report on Friday.
Overnight News: The Delta will get isolated showers and near to above normal temperatures and Southeast will get scattered to isolated showers and near to above normal temperatures. Texas will have isolated showers and near to above normal temperatures. The USDA average price is now 83.18 ct/lb. ICE said that certified stocks are now 163,737 bales, from 163,737 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 8570, 8850, and 10010 July. Support is at 8450, 8360, and 8280 July, with resistance of 8650, 8870 and 9000 July.

DJ USDA Supply/Demand: U.S. Cotton – Jun 10
U.S. Cotton Supply and Use 1/
=========================================================================
Item 2020/2021 2021/2022
prev Jun 10 prev Jun 10
==========================================================================
Area
Million acres
Planted 12.09 12.09 12.04 * 12.04 *
Harvested 8.28 8.28 9.63 * 9.63 *
Pounds
Yield per harv. acre 847 847 847 * 847 *
Million 480 pound bales
Beginning stocks 7.25 7.25 3.30 3.15
Production 14.61 14.61 17.00 17.00
Imports 0.00 0.00 0.00 0.00
Supply, total 21.86 21.86 20.30 20.15
Domestic use 2.30 2.30 2.50 2.50
Exports 16.25 16.40 14.70 14.80
Use, total 18.55 18.70 17.20 17.30
Unaccounted 2/ 0.01 0.01 0.00 -0.05
Ending stocks 3.30 3.15 3.10 2.90
Avg. farm price 3/ 68.00 67.00 75.00 75.00
==========================================================================
Note: 1/ Upland and extra-long staple; marketing year beginning August 1.
Totals may not add due to rounding. 2/ Reflects the difference between the
previous season’s supply less total use and ending stocks. 3/ Cents per pound
for upland cotton. *Planted area as reported in March 31, 2021 Prospective
Plantings. Harvested area based on 10-year average abandonment by region,
with the Southwest adjusted to reflect unfavorable moisture conditions.
Yield based on 5-year average yields by region.

DJ USDA Supply/Demand: World Cotton – Jun 10
World Cotton Supply and Use 1/
(Million 480-pound bales)
=============================================================================
beginning domestic exports ending
stocks prod imports use use loss 2/ stocks
=============================================================================
2021/22 (Projected)
World
May 93.16 119.44 45.51 121.48 45.51 0.13 90.99
Jun 93.05 118.87 46.59 122.54 46.59 0.08 89.30
World Less China
May 54.56 91.94 35.01 81.48 45.46 0.13 54.44
Jun 54.18 92.12 35.59 81.54 46.54 0.08 53.73
United States
May 3.30 17.00 3/ 2.50 14.70 0.00 3.10
Jun 3.15 17.00 3/ 2.50 14.80 -0.05 2.90
Total foreign
May 89.86 102.44 45.51 118.98 30.81 0.13 87.89
Jun 89.90 101.87 46.59 120.04 31.79 0.13 86.40
Major exporters 4/
May 38.26 60.12 1.74 34.57 26.74 0.02 38.78
Jun 37.54 60.30 1.74 34.11 27.61 0.02 37.83
Major importers 8/
May 48.94 39.20 41.30 80.44 2.46 0.11 46.43
Jun 49.70 38.45 42.43 82.04 2.52 0.11 45.90
=============================================================================

DJ On-Call Cotton – Jun 10
As of Jun 4. 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
May 21 0 0 0 0 0 0
Jul 21 13,552 15,933 -2,381 3,879 4,157 -278
Oct 21 0 0 0 0 0 0
Dec 21 44,039 41,248 2,791 25,604 25,765 -161
Mar 22 18,084 16,947 1,137 4,755 4,112 643
May 22 7,944 7,608 336 911 911 0
Jul 22 22,040 19,376 2,664 2,664 2,126 538
Dec 22 6,523 6,541 -18 9,975 9,539 436
Mar 23 1,216 1,216 0 176 176 0
May 23 18 18 0 0 0 0
Jul 23 18 18 0 0 0 0
Dec 23 0 0 0 558 558 0
Jul 24 0 0 0 220 220 0
Dec 24 0 0 0 220 220 0
Total 113,434 108,905 4,529 48,962 47,784 1,178
Open Open Change
Int Int
May 21 0 0 0
Jul 21 64,529 75,136 -10,607
Oct 21 148 97 51
Dec 21 120,176 111,193 8,983
Mar 22 22,624 19,575 3,049
May 22 4,655 3,053 1,602
Jul 22 8,132 6,885 1,247
Dec 22 11,187 10,385 802
Mar 23 182 182 0
May 23 2 2 0
Jul 23 3 3 0
Dec 23 3 3 0
Jul 24 0 0 0
Dec 24 0 0 0
Total 231,641 226,514 5,127

FCOJ
General Comments: FCOJ closed higher and made new highs for the move. Chart trends are up. The move came despite forecasts from USDA for increased oranges production in Florida. The weather in Florida is good with isolated showers. The hurricane season is coming and a big storm could threaten trees and fruit. An active season is anticipated but that does not mean a big and damaging storm is coming. It does mean that the market will be on alert if one does show up. It is dry in Brazil and trees and fruit are stressed. Stress to trees could return if the dry weather continues as is in the forecast. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. It is dry in northern and western Mexican growing areas. Florida Mutual said that inventories are 15% less than last year.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get mostly dry conditions and above normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 140.00 July. Support is at 124.00, 122.00, and 120.00 July, with resistance at 130.00, 133.00, and 136.00 July.

The United States all orange forecast for the 2020-2021 season is
4.50 million tons, up 1 percent the previous forecast but down 14 percent
from the 2019-2020 final utilization. The Florida all orange forecast, at
52.7 million boxes (2.37 million tons), is up 2 percent from the previous
forecast but down 22 percent from last season’s final utilization. In
Florida, early, midseason, and Navel varieties are forecast at
22.7 million boxes (1.02 million tons), unchanged from the previous forecast
but down 23 percent from last season’s final utilization. The Florida
Valencia orange forecast, at 30.0 million boxes (1.35 million tons), is
up 3 percent from the previous forecast but down 21 percent from last
season’s final utilization. California and Texas orange production forecasts
were carried forward from the previous forecast.

COFFEE
General Comments: Both markets closed higher as the weather market continued. The return of dry and hot weather to some of the Brazil growing area was the reason for some buying, but reports of beneficial rains in parts of southern Minas Gerais in the last week caused selling. More showers are in the forecast for these areas this week, but development has been delayed and the initial harvest progress has been slowed. The daily and weekly charts show mixed trends now in both markets but both markets have cleared some important resistance areas on the weekly charts and remain above these areas. Good conditions are reported in northern South America and improved conditions reported in Central America. Colombia is having trouble exporting Coffee right now due to protests inside the country. Conditions are reported to be generally good in Asia and Africa. Vietnam exported 130.285 tons in May, down 1.4% from April.
Overnight News: ICE certified stocks are higher today at 2.124 million bags. The ICO daily average price is now 142.31 ct/lb. Brazil will get mostly dry conditions or isolated showers with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are mixed. Support is at 155.00, 153.00, and 150.00 July, and resistance is at 163.00, 166.00 and 169.00 July. Trends in London are mixed. Support is at 1560, 1530, and 1520 July, and resistance is at 1620, 1670, and 1690 July.

DJ Kenya’s Coffee Production Forecast to Rise 7% in 2021-2022 Season
By George Mwangi
Special to Dow Jones Newswires
Kenya’s coffee production is expected to rise 7% to 45,000 metric tons in the marketing year beginning October 2021 to September 2022, compared with the current year, the United States Department of Agriculture said late Thursday.
The rise is mainly attributed to anticipated good weather, improved farm practices in response to higher prices and a high-yield production cycle, the USDA said in its latest Kenya annual coffee report.
Exports are expected to increase by 3% to 43,200 tons, the USDA said.
Imports of soluble coffee are forecast to rise 18% to 780 tons due to increased consumption in the hospitality sector as vaccinated tourists begin to return to Kenya, it said.
Almost all Kenyan arabica coffee beans are sold at an auction run by the Nairobi Coffee Exchange, with most destined for export, although direct sales are allowed. Kenya’s arabica auctions use the New York ICE futures index as their benchmark.
Prices have surged significantly at the Nairobi Coffee Exchange since the start of 2020-2021 marketing year due to increased purchases by traders and roasters and concerns over shortages of top-quality coffees, the USDA said.

SUGAR
General Comments: New York was mixed and London was a little lower yesterday but both markets are still in a trading range. London is starting to break down out of its recent range. There are forecasts for better rains in southern Brazil production areas against overall dry conditions in Brazil and ideas of increasing demand for Sugarcane. Demand for ethanol should be increasing and could divert the cane processing to production of the ethanol and away from Sugar. There is plenty of White Sugar available in India for the market. Southern growing areas of Brazil are getting some beneficial rains, with Parana and parts of Sao Paulo getting the best rains. Production has been hurt due to dry weather earlier in the year. India is exporting Sugar and is reported to have a big cane crop this year. Thailand is expecting improved production after drought induced yield losses last year. Ethanol demand is returning to the market as more world economies open up after the pandemic.
Overnight News: Brazil will get mostly dry conditions or isolated showers. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1730, 1710, and 1670 October, and resistance is at 1790, 1820, and 1850 October. Trends in London are mixed to down with objectives of 449.00, 438.00, and 436.00 August. Support is at 450.00, 447.00, and 444.00 August, and resistance is at 462.00, 470.00, and 482.00 August.

U.S. Sugar Supply and Use 1/
================================================================================
2019/20 2020/21 Est. 2021/22 Proj. 2021/22 Proj.
Item May Jun
================================================================================
1000 Short Tons, Raw Value
Beginning Stocks 1783 1618 1805 1755
Production 2/ 8149 9299 9310 9310
Beet Sugar 4351 5118 5225 5225
Cane Sugar 3798 4181 4085 4085
Florida 2106 2100 2100 2100
Louisiana 1566 1949 1850 1850
Texas 126 132 135 135
Imports 4235 3104 2652 2652
TRQ 3/ 2152 1673 1387 1387
Other Program 4/ 432 250 250 250
Other 5/ 1651 1181 1015 1015
Mexico 1376 981 965 965
Total Supply 14166 14020 13767 13717
Exports 61 35 35 35
Deliveries 12414 12230 12230 12230
Food 12316 12125 12125 12125
Other 6/ 98 105 105 105
Miscellaneous 74 0 0 0
Total Use 12549 12265 12265 12265
Ending Stocks 1618 1755 1502 1452
Stocks to Use Ratio 12.9 14.3 12.2 11.8
================================================================================
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
2020/21 Est.
May 858 5825 105 4378 1499 910
Jun 858 5700 105 4378 1374 910
2021/22 Proj.
May 910 5809 85 4370 1524 910
Jun 910 5809 85 4370 1524 910
================================================================================
WASDE – 613 – 17 June 2021

COCOA
General Comments: Both markets closed higher on what appeared to be short covering. The daily charts show sideways or down trends in both markets. The harvests are over in West Africa and ports there have been filled with Cocoa. The weather has been a little too dry for best production prospects for the next crop. European demand has been slow as the quarterly grind data showed a 3% decrease from a year ago in grindings. This has been caused by less demand created by the pandemic. Asian demand improved. North American data showed improved demand. The supplies are there for any increased demand.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near to 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 sharply lower today at 5.515 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2320, 2280, and 2020 July, with resistance at 2420, 2440, and 2460 July. Trends in London are mixed. Support is at 1600, 1580, and 1560 July, with resistance at 1640, 1720, and 1760 July.

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