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: Futures were higher again as demand ideas remain strong. Showers are falling in Texas and in the Delta The Southeast is also getting scattered showers. The demand is expected to be strong from Asian countries as world economies recover from Covid lockdowns. Analysts say the demand is still very strong and likely to hold at high levels for the future. However, the expansion of the Delta variant has given pause to the better demand ideas due to fears of economies here and around the world starting to partially lock down again. Production ideas are being impacted in just about all areas due to the weather extremes. It has been very hot in parts of Texas and the Delta and Southeast have had drenching rains at various times in the last couple of months. Overall growing conditions are much better now in just about all areas.
Overnight News: The Delta will get isolated showers and near to above normal temperatures and Southeast will get isolated to scattered showers and near to above normal temperatures. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 91.90 ct/lb. ICE said that certified stocks are now 76,583 bales, from 76,583 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 9240, 9180, and 9100 December, with resistance of 9470, 9600 and 9670 December.
General Comments: FCOJ closed higher again yesterday and prices made new highs on the daily charts. The market is waiting for some news to trigger a move in one direction or the other. Temperatures are now at or above seasonal averages in Brazil after a freeze even a few weeks ago. Weather conditions in Florida are rated mostly good for the crops. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. Northeastern Mexico areas are too dry, but the rest of northern and western Mexico are rated in good condition.
Overnight News: Florida should get scattered showers. Temperatures will average near to above normal. Brazil should get mostly dry conditions and below normal temperatures.
Chart Trends: Trends in FCOJ are up with no objectives. Support is at 139.00, 135.00, and 131.00 September, with resistance at 147.00, 150.00, and 153.00 September.
General Comments: New York and London closed higher again with London once again the stronger market. London is having trouble sourcing Coffee from Vietnam due to a shortage of containers to carry the Coffee out of the country. Prices in New York have stayed firm as the current Brazil harvest starts to wind down with smaller production. Brazil forecasts call for above normal temperatures for at least the next week, but the damage from the freeze a couple of weeks ago is easy to see. It is flowering time for the next crop and the flowers were frozen a few weeks ago and will drop off the trees. Some trees were killed and will have to be replaced. It is also harvest time but the harvest is almost done. The current outlook calls for 10 days of dry weather which will not support the flowering but will keep the harvest active. Improved showers are now in the forecast for Southeast Asia. Good conditions are reported in northern South America and good conditions reported in Central America. Colombia is having trouble exporting Coffee due to protests inside the country. Conditions are reported to be generally good in parts of Africa, but Ivory Coast and Ghana have been a little dry.
Overnight News: ICE certified stocks are lower today at 2.156 million bags. The ICO daily average price is now 164.05 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 421 contracts were tendered for delivery against September futures and that total deliveries for the month are now 851 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 189.00 and 195.00 December. Support is at 182.00, 178.00, and 176.00 December, and resistance is at 190.00, 203.00 and 212.00 December. Trends in London are mixed to up with objectives of 2050 and 2110 November. Support is at 1890, 1870, and 1830 November, and resistance is at 1980, 2000, and 2030 November.
General Comments: New York and London were mostly a little higher, but nearby New York was unchanged and nearby London prices were a little lower. The market rallied initially on wire reports of reduced production in Brazil. Ideas are that the Brazil freeze hit one million hectares of Sugar area and that the world will have a deficit production for the coming year. Consumption of Sugar remains on the light side. Fears that the Covid is returning and could reduce economic activity and demand held sway. The market is still working through a short supply. The freeze and drought damage is there in Brazil as industry sources have said to expect a short season for processing. London has firmed a bit lately with the problems in Brazil and trends in this market are up. There is little White Sugar left in India for the export market but monsoon rains are promoting good conditions for the next crop. Thailand is expecting improved production. Ethanol demand is returning to the market as more world economies open up after the pandemic, but renewed Ethanol demand is now in doubt with weaker Crude Oil futures and covid pandemic fears as the Delta variant spreads.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1950, 1930, and 1890 October, and resistance is at 1990, 2000, and 2040 October. Trends in London are mixed to down with objectives of 473.00, 454.00, and 434.00 October. Support is at 470.00, 465.00, and 460.00 October, and resistance is at 491.00, 501.00, and 510.00 October.
DJ Brazil Sugar Crush Down 4.2% in 1H of Aug. After Frosts Damaged Crop
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the first half of August compared with a year earlier, as unusually cold weather damaged the cane crop, according to industry group Unica.
Center-south mills crushed 44.6 million metric tons of cane in the period, a decrease of 4.2% from the same period a year earlier. They produced 3 million tons of sugar, down 7.5%, and made 2.2 billion liters of ethanol, a decline of 2.8%.
The production mix for the first half of August was 46.8% sugar to 53.2% ethanol, compared with 47.7% sugar and 52.3% ethanol in the same period a year ago.
The cold weather in July and August hurt Brazil’s sugarcane crop, and has also hit production of fruits and vegetables, sending food prices higher in the country. The coffee crop is expected to suffer the impact of the frosts in the 2022 season.
Recent wildfires in some cane-growing areas, along with the still unclear impact of the cold, has led some growers to say they expect the cane crop this year to be smaller than previously forecast, according to Unica’s technical director, Antonio de Padua Rodrigues.
In the season from April 1 through Aug. 15, mills in the region crushed 349.5 million tons of cane, down 6.7% from the same period a year earlier. Sugar production fell 7.5% to 21.3 million tons, and ethanol output fell 2.8% to 16.4 billion liters.
The production mix for the season through Aug. 15 was 46.25% sugar to 53.75% ethanol, compared with 47% sugar and 53% ethanol in the same period a year ago.
General Comments: New York and London closed a little higher. Buying came from speculators who were buying in most commodities markets yesterday. Ivory Coast has stopped selling for the next crop on fears of less supplies. The grind data was released recently and showed a strong recovery from the Covid times. World economies are starting to reopen after Covid and the open economies are giving demand the boost. The weather has had below normal rains in West Africa and crop conditions are rated good for now but there is concern about the lack of rain.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be 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 higher today at 5.625 million bags. ICE said that 62 contracts were posted for delivery against September futures and that total deliveries for the month are now 637 contracts.
Chart Trends: Trends in New York are down with objectives of 2520 and 2420 December. Support is at 2530, 2500, and 2470 December, with resistance at 2600, 2650, and 2680 December. Trends in London are mixed to down with objectives of 1760 and 1730 December. Support is at 1710, 1700, and 1690 December, with resistance at 1740, 1770, and 1800 December.