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: Cotton was sharply lower yesterday on ideas of less demand and on weaker world petroleum prices that could make polyester prices lower compared to Cotton. Support came from dry weather forecasts for the Great Plains and on news late last week that India has waived import taxes on Cotton until September. India will now increase imports as world and US Cotton is now lower cost to importers. Much of the western parts of the Great Plains have missed out on recent precipitation events and are likely to miss out again this week. Production of the next US crop is at risk now. There was talk about less demand for the market in part from Fed moves to control the inflation now seen in the US and around the world. Traders are getting worried about a potential recession caused by Fed tightening. One Fed governor said he thought interest rates could be raise a full point this year. China has been buying even with the port closures and domestic difficulties caused by renewed Covid lockdowns. Traders are worried about Chinese demand moving forward. China has closed the ports for imports due to Covid and is also closing down a number of cities as the Covid spreads through the nation.

Overnight News: The Delta will get scattered showers and the Southeast will get mostly dry conditions and bear to above normal temperatures. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 133.33 ct/lb. ICE said that certified stocks are now 1,101 bales, from 1,101 bales yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 13460, 13160, and 13040 May, with resistance of 14620, 14740 and 14860 May.

FCOJ

General Comments: FCOJ was sharply lower yesterday on what appeared to be speculative long liquidation and on ideas that demand is being priced out of the market as the market now knows it is short Oranges and short juice production. The greening disease has taken its toll on the US crop and the previous Brazil crop was down significantly due to drought. Trends are still up on the daily charts. The weather remains generally good for production around the world. Brazil has some rain and conditions are rated good, but it is drier now and some tree stress could develop soon. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures. Florida Mutual said that FCOJ inventories are now 32% less than last year.

Overnight News: Florida should get mostly dry conditions. Temperatures will average near normal.   Brazil should get isolated showers and near normal temperatures.

Chart Trends: Trends in FCOJ are mixed. Support is at 169.00, 164.00, and 161.00 May, with resistance at 180.00, 194.00, and 196.00 May.

 

COFFEE

General Comments: New York and London closed lower yesterday on what appeared to be speculative long liquidation seen in many commodities markets and on ideas of less demand from Ukraine, Russia, and China. Deliveries from Vietnam and Brazil Robusta are noted to be increasing but Robusta was following New York. Arabica deliveries from Brazil are less I part due to less production and in part due to a stronger Real that has cut prices paid to farmers inside the country. Less deliveries are reported from Vietnam now as producers have sold most of the crop and are holding the rest and waiting for higher prices, but the market is still flush from Vietnamese selling seen earlier in the year. Good growing conditions for the next crop in Brazil are still around but flowering is reported to be uneven this year in at least some areas.

Overnight News: ICE certified stocks are higher today at 1.092 million bags. The ICO daily average price is now 197.32 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

Chart Trends: Trends in New York are mixed to down with objectives of 212.00, 206.00, and 199.00 May. Support is at 220.00, 217.00, and 213.00 May, and resistance is at 225.00, 233.00 and 238.00 May. Trends in London are mixed to down with objectives of 2040, 2010, and 1970 May.   Support is at 2010, 2000, and 1970 May, and resistance is at 2120, 2150, and 2180 May.

 

SUGAR               

General Comments: New York and London were both lower yesterday on what appeared to be speculative selling. The selling was most likely long liquidation. Increased offers from India and Thailand are expected if the market continues to rally. The US government is permitting refiners to blend 15% ethanol into the fuel mixtures instead of 10% for the coming Summer. News reports indicate that little export activity is taking place from Ukraine with the ports basically closed. Russia said it is still exporting from Black Sea ports. India and Thailand expect improved crops this year. Thailand expects to produce about10 million tons of sugar this year, up 33% from last year. India said it could produce more than 9.0 million tons of Sugar. Brazil could also have better Sugarcane production this year but the strengthening Real implies that most of the refining will be for Ethanol and not Sugar.

Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to above normal. India will get isolated showers in eastern areas and near to above normal temperatures.

Chart Trends: Trends in New York are mixed to down with objectives of 1950 and 1900 July. Support is at 1960, 1930, and 1910 July and resistance is at 2010, 2040, and 2070 July. Trends in London are down with objectives of 535.00 and 522.00 August. Support is at 535.00, 532.00, and 526.00 August and resistance is at 548.00, 554.00, and 560.00 August.

 

DJ Brazil Raises 2021-2022 Sugar, Ethanol Output Estimates

Jeffrey T. Lewis

SAO PAULO–Brazilian crop agency Conab raised its estimates for sugarcane, sugar and ethanol production in the 2021-2022 season after drought conditions and frosts in some areas had less of a negative impact than expected.

Brazil produced 585.2 million metric tons of sugar cane in the 2021-2022 growing season, Conab said Wednesday in its fourth and final report on the season. That was up from the 568.4 million tons the agency estimated in its November report, though down 10.6% from the previous growing season, according to the agency.

Sugar production for 2021-2022 reached 35.1 million tons, up from the 33.9 million tons estimated in November, but a drop of 15% from a year earlier. Total ethanol production, from sugar cane and corn, reached 30.3 billion liters, compared with the November estimate of 28.3 billion liters, and a decline of 7.7% from the previous season, Conab said.

The drought and the cold weather slammed Brazil’s agricultural output for 2021-2022, with the country’s coffee crop particularly affected. Brazil produces ethanol from both sugarcane and corn as an alternative fuel and the country has the world’s biggest fleet of cars that can run on either gasoline or ethanol.

 

COCOA                                                                                  

General Comments: New York was mixed yesterday with London lower as it caught up to the price action in New York on Monday. Asia and North America are expected to release grind data early this week, The weather is good for harvest activities in West Africa but some are concerned about dry weather that could affect the yields for the midcrop harvest. Some showers are in the forecast for West Africa and have been for several weeks, but the precipitation was less than normal last week. Farmers there say that soil moisture conditions are good for the midcrop, but there are concerns that conditions are too dry overall for the best yields. The weather is good in Southeast Asia. Ghana arrivals have been below year ago levels but Ivory Coast arrivals are ahead of last year.

Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near to above normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal. Brazil will get mostly dry conditions and above normal temperatures. ICE certified stocks are higher today at 4.943 million bags.

Chart Trends: Trends in New York are down with objectives of 2500 and 2400 May. Support is at 2490, 2400, and 2380 May, with resistance at 2570, 2650, and 2680 May. Trends in London are mixed to down with objectives of 1710, 1670, and 1660 May. Support is at 1710, 1700, and 1670 May, with resistance at 1760, 1790, and 1810 May.

 

 

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