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 again despite a stronger US Dollar 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 or isolated showers and above normal temperatures. Texas will have mostly dry conditions or 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.
Chart Trends: Trends in Cotton are up with objectives of 14940 and 16180 July. Support is at 14480, 14070, and 13760 July, with resistance of 14840, 14960 and 15080 July.
DJ On-Call Cotton – Apr 28
As of Apr 22. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
*-denotes changes from the previous week are based on revised data from
Call Previous Change Call Previous Change
May 22 407 9,969 -9,562 298 2,462 -2,164
Jul 22 65,715 63,111 2,604 5,368 4,203 1,165
Oct 22 0 0 0 0 0 0
Dec 22 49,369 46,780 2,589 24,718 24,639 79
Mar 23 7,132 6,704 428 2,585 2,417 168
May 23 4,167 4,278 -111 164 97 67
Jul 23 8,132 7,958 174 17 0 17
Dec 23 3,579 3,537 42 9,068 8,984 84
Mar 24 0 0 0 0 0 0
May 24 0 0 0 0 0 0
Jul 24 0 0 0 220 220 0
Dec 24 0 0 0 249 249 0
Total 138,501 142,337 -3,836 42,687 43,271 -584
Open Open Change
May 22 56 16,935 -16,879
Jul 22 97,594 99,291 -1,697
Oct 22 47 33 14
Dec 22 75,289 73,698 1,591
Mar 23 13,108 12,195 913
May 23 3,107 2,996 111
Jul 23 4,237 3,656 581
Dec 23 9,711 9,536 175
Mar 24 34 34 0
May 24 22 12 10
Jul 24 26 24 2
Dec 24 20 13 7
Total 203,251 218,423 -15,172
General Comments: FCOJ was a little higher yesterday on more speculative selling due to delivery concerns. 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, 163.00, and 160.00 July, with resistance at 177.00, 189.00, and 195.00 July.
General Comments: New York and London closed higher with London leading the way. A stronger US Dollar and concerns about inflation continue and what the central banks might do to counter inflationary tendencies are also important. 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 lower today at 1.124 million bags. The ICO daily average price is now 193.39 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 18 delivery notices were tendered against May contracts and that total deliveries for the month are now 376 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 mixed. Support is at 2060, 2010, and 1990 July, and resistance is at 2090, 2100, and 2130 July.
General Comments: New York and London were higher yesterday. Speculators were worried about inflation and what actions the central banks could take to combat it. Ideas are that consumer demand could be hurt, but the market was considered oversold and demand appeared. The US Dollar was strong and has been strong to drive up the price in local currencies of the importers and exporters, but the sell side knows futures have fallen and are holding. 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 Sugar Crush Down 66.9% in 1H April After Fewer Mills Opened
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the first half of April compared with a year earlier, as fewer mills began operations at the start of the new production season, according to industry group Unica.
Center-south mills crushed 5.19 million metric tons of cane in the period, a decline of 66.9% from the same period a year earlier, Unica said Thursday. They produced 126,630 tons of sugar, down 80%, and made 398 million liters of ethanol, a decline of 46%.
The production mix for the first half of April was 25.95% sugar to 74.05% ethanol, compared with 38.8% sugar and 61.2% ethanol in the same period a year ago.
The sugarcane harvesting season, and the sugar and ethanol production season, begin on April 1 in the center-south region, which grows about 90% of the country’s cane.
Only 85 mills had begun operations in the first half of April, compared with 149 mills in the same period a year earlier, Unica said. Another 104 mills should begin operations in the second half of the month, according to the group.
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 lower today at 5.023 million bags. ICE said that 2 notices were posted for delivery against May contracts and that total deliveries for the month are now 219 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2540, 2500, and 2480 July, with resistance at 2580, 2620, and 2640 July. Trends in London are mixed. Support is at 1760, 1740, and 1720 July, with resistance at 1810, 1840, and 1870 July.