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 mixed for the second day. Demand reports are a little soft before the USDA reports late this week. 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. Even so, good US production totals are expected.
Overnight News: The Delta will get mostly dry conditions and near normal temperatures and Southeast will get isolated to scattered showers and near normal temperatures. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 91.34 ct/lb. ICE said that certified stocks are now 64,455 bales, from 66,543 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 9340, 9210, and 9180 December, with resistance of 9510, 9600 and 9630 December.

Bloomberg Production and WASDE Survey:
2021-22: Avg Low High Aug. Avg vs Prior
US Production 17.69 17.00 18.45 17.26 0.428
US Exports 15.06 14.80 15.50 15.00 0.061
US End Stocks 3.43 2.82 4.40 3.00 0.428
World Production 119.01 117.50 120.50 118.84 0.171
World Consumption 123.39 122.75 124.00 123.33 0.058
World End Stocks 87.67 86.44 89.00 87.23 0.438

FCOJ
General Comments: FCOJ closed lower, but trends are still mostly up on weather concerns, especially for Brazil but also for Florida and Mexico. A freeze hit Sao Paulo state several weeks ago and reports of significant losses are being heard. Weather conditions in Florida are rated mostly good for the crops with scattered showers and near normal temperatures. 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 normal. Brazil should get mostly dry conditions and above normal temperatures. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 135.00, 130.00, and 128.00 November, with resistance at 138.00, 143.00, and 144.00 November.

COFFEE
General Comments: New York and London closed lower yesterday as speculators appeared to liquidate some long positions due to the higher US Dollar. London has been the stronger market again on ideas of increasing demand and troubles getting the Coffee out of Vietnam. London is having trouble sourcing Coffee from Vietnam due to a shortage of containers to carry the Coffee out of the country and the expansion of the Delta variant that has caused so many problems around the world and is really affecting the Vietnamese. Prices in New York have been firm as the current Brazil harvest starts to wind down with smaller production. Brazil forecasts call for mostly dry conditions and above normal temperatures for at least the next week, but the damage from the freeze several weeks ago is apparent. Some trees were killed and will have to be replaced. Scattered 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 a little higher today at 2.162 million bags. The ICO daily average price is now 167.44 ct/lb. Brazil will get mostly dry conditions with above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 0 contracts were tendered for delivery against September futures and that total deliveries for the month are now 1,047 contracts.
Chart Trends: Trends in New York are mixed. Support is at 190.00, 185.00, and 182.00 December, and resistance is at 194.00, 201.00 and 203.00 December. Trends in London are mixed. Support is at 2060, 2030, and 2000 November, and resistance is at 2120, 2150, and 2180 November.

DJ Brazil 2021 2 Coffee Crop Already 60% Sold — Market Talk
0835 ET – Brazilian coffee producers had already sold 60% of the 2021 crop as of Sept. 6, according to agricultural consultancy Safras & Mercado. That was up from 53% a month earlier, and slightly ahead of the 58% sold on the same date a year earlier, Safras said. The group estimates total 2021 production of 56.5 million 132-pound bags of coffee. The pace of sales has been volatile this year, according to Safras analyst Gil Barabach, who said that high prices have encouraged some producers to sell, while the outlook for a smaller-than-normal crop next year has led others to hold back. The arabica crop is already 58% sold, slightly behind the 60% level on the same date last year, while the robusta crop is 63% sold, up from 55% a year earlier, Safras said. (jeffrey.lewis@wsj.com)

SUGAR
General Comments: New York and London were a little lower again yesterday on the stronger US Dollar. The reduced production potential from Brazil is still impacting the market, but the stronger US Dollar makes Sugar more expensive in local currency terms and the weaker Crude Oil prices mean that Ethanol prices will probably work lower. Wire reports suggest that Ethanol and Sugar prices are at parity so any lower Crude Oil prices now could mean that Ethanol prices move below those of Sugar. The ISO has noted that this will be the second year of deficit production for the world, in large part because of the Brazil freeze that cut production. Consumption of Sugar remains on the light side. Fears that the Covid is returning and could reduce economic activity and demand are around. 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. Thailand is expecting improved production.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1950 and 1880 March. Support is at 2010, 1980, and 1940 March, and resistance is at 2050, 2090, and 2120 March. Trends in London are mixed. Support is at 499.00, 495.00, and 490.00 December, and resistance is at 513.00, 520.00, and 526.00 December.

COCOA
General Comments: New York and London closed a little lower on what was called speculative profit taking. Ivory Coast has stopped selling for the next crop on fears of less supplies. 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. Some are forecasting less production in the coming year but the ICCO said that it expects a production surplus of 230,000 tons this year, from its previous estimate of 165,000 tons. Ivory Coast sources told wire services that the country has sold between 1.64 million and 1.66 million tons of Cocoa so far this season. This is considered a very big amount and there are concerns about Cocoa availability at origin moving forward.
Overnight News: Isolated to scattered 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 5.511 million bags. ICE said that 119 contracts were posted for delivery against September futures and that total deliveries for the month are now 1,470 contracts.
Chart Trends: Trends in New York are up with objectives of 2780 December. Support is at 2630, 2600, and 2570 December, with resistance at 2710, 2740, and 2770 December. Trends in London are up with objectives of 1840 and 1880 December. Support is at 1800, 1770, and 1740 December, with resistance at 1840, 1870, and 1900 December.

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