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: Cotton was higher to limit up despite a stronger US Dollar and weaker US stock market that continued to hurt overall price action and as speculators worried that inflation and central bank actions to counter inflation could hurt demand. The trade is also worried about Chinese demand due to the Covid lockdowns there. 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 although there will be a little rain in the region. 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. China could be imports due to Covid and is also closing down a number of cities as the Covid spreads through the nation. 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.
Overnight News: The Delta and Southeast will get mostly dry conditions and below normal temperatures. Texas will have isolated showers and near to above normal temperatures. The USDA average price is now 135.68 ct/lb. ICE said that certified stocks are now 1,101 bales, from 1,101 bales yesterday. ICE said that 0 notices were posted for delivery against May contracts and that total deliveries for the month are now 0 contracts. USDA said that weekly net Upland Cotton export sales wee 121,1009 bales this year and 49,500 bales next year. Net Pima sales were 13,000 bales this year and 500 bales next year.
Chart Trends: Trends in Cotton are mixed to up with objectives of 14940 and 16180 July. Support is at 13760, 13020, and 12420 July, with resistance of 14130, 14480 and 14600 July.
General Comments: FCOJ was a little lower again yesterday on more speculative selling due to inflation concerns. Also, First Notice Day for May contracts should be on Monday and some speculators were liquidating May long positions before the end of the week. Inflation and central bank actions to counter inflation have many concerns about how consumers will be affected and what the buying power of consumers might be in the end. The market now knows it is short Oranges and short juice production but is also worried about domestic demand destruction as pills are becoming cheaper again. The greening disease has taken its toll on the US crop and the previous Brazil crop was down significantly due to drought. 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. The Florida Dept of Citrus said that FCOJ stocks are now 30.2% less than last year.
Overnight News: Florida should get isolated showers. Temperatures will average near normal. Brazil should get isolated showers and near normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 164.00, 161.00, and 157.00 May, with resistance at 173.00, 180.00, and 194.00 May.
General Comments: New York and London closed lower in response to a stronger US Dollar and on concerns about inflation and what the central banks might do to counter inflationary tendencies. Arabica offers remain down as the US Dollar remains very strong, but there are still some Robusta offers hitting London. Ideas are that demand could get hurt as inflation and central bank actions hurt buying power from consumers. Deliveries from Vietnam and Brazil Robusta are noted to be decreasing as the harvest is now complete. Indonesian offers are increasing due to plentiful stocks inside the country. Arabica deliveries from Brazil are less in 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. 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 1.126 million bags. The ICO daily average price is now 190.70 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 delivery notices were tendered against May contracts and that total deliveries for the month are now 358 contracts.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 213.00, 210.00, and 207.00 July, and resistance is at 225.00, 230.00 and 233.00 July. Trends in London are down with objectives of 1980 and 1900 July. Support is at 1990, 1960, and 1950 July, and resistance is at 2060, 2090, and 2100 July.
General Comments: New York closed a little lower and London was higher yesterday as Crude oil worked lower. Speculators were worried about inflation and what actions the central banks could take to combat it. Ideas are that consumer demand could be hurt. The US Dollar was strong and has been strong to drive up the price in local currencies of the importers. Increased offers from India and Thailand are expected if the market continues to rally. Pakistan is also increasing its offers due to good crops there. The US government is permitting refiners to blend 15% ethanol into the fuel mixtures instead of 10% for the coming Summer, but most of the Ethanol will come from Corn. 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 above normal. India will get isolated showers in eastern areas and near to above normal temperatures.
Chart Trends: Trends in New York are mixed. Support is at 1870, 1850, and 1810 July and resistance is at 1930, 1950, and 1990 July. Trends in London are mixed. Support is at 518.00, 515.00, and 508.00 August and resistance is at 529.00, 542.00, and 548.00 August.
DJ Brazil Forecasts 2022-2023 Sugarcane Output to Rise 1.9% to 596.1M Tons
By Jeffrey T. Lewis
SÃO PAULO–Brazil’s sugarcane and sugar output should increase in the 2022-2023 growing season from a year earlier, boosted by improved productivity amid better weather conditions so far this season, according to Brazilian crop agency Conab.
The country’s farmers will produce 596.1 million metric tons of sugarcane, the raw material used by Brazilian sugar mills to produce the sweetener and most of Brazil’s ethanol. That would be a 1.9% increase from the 585.2 million tons produced in the 2021-2022 season, Conab said.
Sugar production will rise 14.9% to 40.3 million tons, while total ethanol output will fall 5.3% to 28.7 billion liters, according to the agency. Brazilian mills produce ethanol from both sugarcane and from corn, with output from sugarcane forecast to decline 7.4% in 2022-2023 from a year earlier to 24.8 billion liters and output from corn to increase 10.7% to 3.8 billion liters.
Unhelpful weather in the 2021-2022 season, including a months-long drought in many cane-growing areas and frosts in July and August, hurt productivity and production a year ago. Brazil’s total sugarcane production fell 10.6% last year from the 2020-2021 season, according to Conab.
Sugar mills will boost the proportion of cane used to make the sweetener, at the expense of ethanol, to compensate for lower sugar production during 2021-2022 and to take advantage of recent higher prices, among other reasons, Conab said.
General Comments: New York and London closed higher again yesterday. The trends are now mixed on the charts. 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 and net drying is reported. 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: Scattered 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 near to above normal temperatures. ICE certified stocks are higher today at 5.045 million bags. ICE said that 0 notices were posted for delivery against May contracts and that total deliveries for the month are now 217 contracts.
Chart Trends: Trends in New York are down with objectives of 2360 July. Support is at 2480, 2460, and 2450 July, with resistance at 2520, 2570, and 2580 July. Trends in London are mixed to down with objectives of 1750, 1730, and 1700 July. Support is at 1740, 1720, and 1710 July, with resistance at 1770, 1800, and 1810 July.