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 as dry conditions in the western Great Plains continue but futures were held in check due to weaker demand ideas. The trade is worried about Chinese demand due to the Covid lockdowns there. India will now try to increase imports as world and US Cotton is now lower cost to importers as import taxes have been removed, but prices for imported Cotton are still very high. Production of the next US crop is at risk now due to dry weather in general for the western Great Plains. China could be trimming 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.
Overnight News: The Delta will get mostly dry conditions and above normal temperatures and Southeast will get mostly dry conditions and near normal temperatures. Texas will have isolated showers and above normal temperatures. The USDA average price is now 138.60 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 net weekly Upland Cotton export sales were 27,500 balers this year and 90,600 bales next year. Net Pima sales were 2,100 bales this year and 2,900 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 142.10, 140.70, and 137.60 July, with resistance of 148.70, 152.90 and 155.90 July.
General Comments: FCOJ was lower and trends started to turn down on the daily charts. The market 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 for the next crop. 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.
Overnight News: Florida should get mostly dry conditions. Temperatures will average near normal. Brazil should get isolated showers and near normal temperatures. ICE said that 0 notices were posted for delivery against May futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 162.00 and 153.00 July. Support is at 164.00, 163.00, and 160.00 July, with resistance at 173.00, 179.00, and 182.00 July.
General Comments: New York and London were both sharply higher yesterday on much reduced exports from Brazil for April and on forecasts for a potential freeze next week in Brazil. The export pace was 2.8 million bags, down 24% from the previous year. There are fears of a cooling economy and less demand due to actions last week from the Fed, but strong earnings reports from coffee shop chains imply that demand is holding together well. The Ukraine war is also supporting ideas of less demand from Europe generally and Ukraine and Russia. Demand from China is thought to be less due to the war against Covid. Deliveries from Vietnam and Brazil Robusta are noted to be decreasing as the harvest is now complete, but selling was active in previous months. Indonesian offers are higher now after a slow start to the selling campaign due to plentiful stocks inside the country. Good growing conditions for the next crop in Brazil are still around but some regions could be turning too dry again. Colombia Coffee Federation said yesterday that production from there hold be between 12.0 and 12.5 million bags this year after heavy rains fell during the crop development.
Overnight News: ICE certified stocks are lower today at 1.104 million bags. The ICO daily average price is now 195.07 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Central America will get scattered showers. Vietnam will see isolated showers. ICE NY said that 0 delivery notices were tendered against May contracts and that total deliveries for the month are now 478 contracts.
Chart Trends: Trends in New York are mixed. Support is at 214.00, 212.00, and 201.00 July, and resistance is at 222.00, 225.00 and 230.00 July. Trends in London are mixed. Support is at 2060, 2030, and 2010 July, and resistance is at 2130, 2140, and 2150 July.
DJ Brazil Coffee Exports Dropped 24.1% in April to 2.8M Bags, Cecafe Says
By Jeffrey T. Lewis
SÃO PAULO–Brazilian coffee exports fell in April after logistics bottlenecks were exacerbated by the Russian invasion of Ukraine, according to exporters group Cecafe.
The South American country exported 2.8 million 132-pound bags of coffee last month, a decline of 24.1% from the same month a year earlier, Cecafe said Wednesday. Sales abroad of the arabica variety of coffee fell 20.4% to 2.4 million bags, while exports of robusta beans fell 60% to 134,512 bags.
Exports of ground, roast and soluble coffee fell 21.7% to 248,716 bags, Cecafe said.
Supplies of coffee for export often decline during the period between two crops, and the harvest in Brazil’s main coffee-producing state, Minas Gerais, starts to ramp up only in May. So growers didn’t have much coffee available to export, according to Cecafe President Nicolas Rueda.
High prices for arabica coffee on global markets also pushed Brazilian roasters to use more robusta coffee in their domestic blends, reducing the amount of robusta available for export, he said.
The conflict in Ukraine has added to already-existing shipping problems, as has the increase in Covid-19 cases in China, which has limited operations at the port of Shanghai, Mr. Rueda added.
General Comments: New York closed a little higher and London closed lower again yesterday and moved once again on US Dollar strength. 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 rallies. Pakistan is also increasing its offers due to good crops there. All are primarily exporters of White Sugar while Brazil exports more Raw Sugar. Thailand expects to produce about 10 million tons of sugar this year, up 33% from last year. India said it could export more than 9.0 million tons of Sugar. Brazil could also have better Sugarcane production this year. Brazil mills are crushing for Ethanol at this time and not Sugar. The overall crush pace is down significantly due to mills being closed. The crush was down 19.7% last month at 23.8 million tons of cane and the production mix is now 35.4% Sugar and 64.6% Ethanol.
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. Support is at 1850, 1810, and 1790 July and resistance is at 1880, 1920, and 1940 July. Trends in London are mixed to down with objectives of 504.00 and 494.00 August. Support is at 515.00, 508.00, and 499.00 August and resistance is at 524.00, 532.00, and 534.00 August.
General Comments: New York and London were higher yesterday along with most other agricultural futures markets. The weather is good for harvest activities in West Africa. Current reports from Ivory Coast indicate that the weather is a good mix of sun and rain so a good midcrop production is expected. The weather is good in Southeast Asia. Ghana arrivals have been below year ago levels, but Ivory Coast arrivals are ahead of last year. Ivory Coast arrivals are now 1.770 million tons, down 3.2% from last year.
Overnight News: Scattered showers are forecast for West Africa. Temperatures will be near 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 5.081 million bags. ICE said that 10 notices were posted for delivery against May contracts and that total deliveries for the month are now 283 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2460, 2430, and 2410 July, with resistance at 2510, 2570, and 2620 July. Trends in London are mixed. Support is at 1770, 1750, and 1740 July, with resistance at 1800, 1820, and 1840 July.