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 lower on what appeared to be speculative selling. Part of the selling was in preparation for the big USDA reports today. The trade expects bigger production and ending stocks estimates. 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 mostly dry conditions and near to above normal temperatures. Texas will have isolated showers and above normal temperatures. The USDA average price is now 90.70 ct/lb. ICE said that certified stocks are now 64,455 bales, from 64,455 bales yesterday. USDA said that net weekly Upland Cotton export sales were 453,000 bales this year and 19,500 bales next year. Net Pima sales were 12,100 bales gthis year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 9340, 9210, and 9180 Decmber, 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
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.
General Comments: New York and London closed lower again yesterday as speculators appeared to liquidate some long positions and as chart trends turned down. 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. The damage from the Brazil 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 unchanged today at 2.162 million bags. The ICO daily average price is now 166.54 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 down with objectives of 182.00 and 172.00 December. Support is at 182.00, 178.00, and 176.00 December, and resistance is at 191.00, 194.00 and 201.00 December. Trends in London are mixed. Support is at 2030, 2000, and 1950 November, and resistance is at 2100, 2120, and 2150 November.
DJ Africa Coffee Exports Fell Slightly From October to July
By George Mwangi
Special to Dow Jones Newswires
Coffee exports from the African continent fell 0.3% on-year in the period from October 2020 to July, with the number of 60-kilogram bags sold overseas dropping to 11.5 million, the International Coffee Organization said late Wednesday.
On a cumulative basis, exports of the commodity from Tanzania, Uganda and Kenya in the first 10 months of the coffee year ending Sept. 30 were up by 22.7%, 20.5% and 11.6%, respectively, the ICO said in its August coffee market report.
Conversely, Ethiopia’s coffee exports fell 15.9% and Ivory Coast’s by 48.1% over the same period, the ICO said.
The price of coffee on the global market continued to rise in this period.
“In August 2021, coffee prices recorded the tenth consecutive month of increase, sparked by concerns over supply, due to climate adverse conditions in major producing countries and increasing freight costs coupled with Covid-19 lockdown restrictions disrupting trade flows in Asia,” it said.
Africa’s coffee output is expected to increase slightly by 0.1% to 18.72 million 60-kilogram bags, compared with 18.59 million bags in the previous coffee year, the ICO said.
General Comments: New York and London were lower again yesterday and the trends turned mostly down on the daily charts. 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 recently 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 down with objectives of 1950 and 1880 March. Support is at 1940, 1920, and 1890 March, and resistance is at 2020, 2050, and 2090 March. Trends in London are down with objectives of 486.00 December. Support is at 490.00, 486.00, and 481.00 December, and resistance is at 504.00, 508.00, and 513.00 December.
General Comments: New York and London closed lower on what was called speculative long liquidation. Trends are turning sideways on the daily charts. 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 lower today at 5.500 million bags. ICE said that 40 contracts were posted for delivery against September futures and that total deliveries for the month are now 1,510 contracts.
Chart Trends: Trends in New York are mixed to 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 mixed. Support is at 1800, 1770, and 1740 December, with resistance at 1840, 1870, and 1900 December.