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 higher as dry conditions in the western Great Plains continue. USDA estimated production for the coming year at 16.50 million bales and this was below trade expectations. Demand was also cut, but ending stocks were estimated at just 2.9 million bales for the new crop year, down from 3.4 million in the current crop year. USDA said that planterd area was less than had been previously forecast due to the hot and dry weather in the western Great Plains. 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.
Chart Trends: Trends in Cotton are mixed. Support is at 145.00, 142.10, and 140.70 July, with resistance of 148.70, 152.90 and 155.90 July.

U.S. Cotton Supply and Use 1/
================================================================================
2020/21 2021/22 Est. 2022/23 Proj. 2022/23 Proj.
Item Apr May
================================================================================
Million Acres
Planted 12.09 11.22 NA 12.23*
Harvested 8.22 10.27 NA 9.14*

Pounds
Yield per Harvested
Acre 853 819 NA 867*

Million 480 Pound Bales
Beginning Stocks 7.25 3.15 NA 3.40
Production 14.61 17.52 NA 16.50
Imports 0.00 0.01 NA 0.01
Supply, Total 21.86 20.68 NA 19.91
Domestic Use 2.40 2.55 NA 2.50
Exports, Total 16.37 14.75 NA 14.50
Use, Total 18.77 17.30 NA 17.00
Unaccounted 2/ -0.06 -0.02 NA 0.01
Ending Stocks 3.15 3.40 NA 2.90
Avg. Farm Price 3/ 66.3 92.0 NA 90.0
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WASDE – 624 – 18 May 2022

World Cotton Supply and Use 1/
(Million 480-Pound Bales)
================================================================================
Supply Use
Region Beginning Produc- Loss Ending
Stocks tion Imports Domestic Exports 2/ Stocks
================================================================================
2022/23 Proj.
World
Apr NA NA NA NA NA NA NA
May 83.65 121.06 47.56 121.99 47.56 -0.10 82.82
World Less China
Apr NA NA NA NA NA NA NA
May 47.17 93.56 37.06 83.99 47.51 -0.10 46.40
United States
Apr NA NA NA NA NA NA NA
May 3.40 16.50 0.01 2.50 14.50 0.01 2.90
Total Foreign
Apr NA NA NA NA NA NA NA
May 80.25 104.56 47.56 119.49 33.06 -0.10 79.92
Major Exporters 4/
Apr NA NA NA NA NA NA NA
May 31.10 60.24 2.46 34.15 28.98 -0.17 30.84
Major Importers 8/
Apr NA NA NA NA NA NA NA
May 46.36 41.07 42.71 81.15 2.57 0.07 46.35
================================================================================
WASDE – 624 – 28 May 2022

FCOJ
General Comments: FCOJ was lower and trends are down on the daily charts. USDA increased its Florida and US production estimates by about 2 million boxes to 40.2 million boxes. USDA had been cutting production in previous estimat4es. 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 down with objectives of 153.00 July. Support is at 160.00, 157.00, and 154.00 July, with resistance at 173.00, 179.00, and 182.00 July.

The United States all orange forecast for the 2021-2022 season is
3.88 million tons, up 2 percent from the previous forecast but
down 12 percent from the 2020-2021 final utilization. The Florida all orange
forecast, at 40.2 million boxes (1.81 million tons), is up 5 percent from the
previous forecast but down 24 percent from last season’s final utilization.
In Florida, early, midseason, and Navel varieties are forecast at
18.2 million boxes (819,000 tons), unchanged from the previous forecast but
down 20 percent from last season’s final utilization. The Florida Valencia
orange forecast, at 22.0 million boxes (990,000 tons), is up 10 percent from
the previous forecast but down 27 percent from last season’s final
utilization. California and Texas orange production forecasts were carried
forward from the previous forecast.

COFFEE
General Comments: New York and London were lower yesterday on ideas that a Brazil freeze will not happen soon or will not damage crops is there is one now. The export pace from Cecafe 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 higher today at 1.113 million bags. The ICO daily average price is now 191.90 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 212.00, 210.00, and 208.00 July, and resistance is at 222.00, 225.00 and 230.00 July. Trends in London are mixed. Support is at 2030, 2010, and 1990 July, and resistance is at 2130, 2140, and 2150 July.

SUGAR
General Comments: New York and London closed mixed yesterday with nearby months a little higher and deferred months a little lower. The price action implies renewed demand has appeared in the world market. 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 1830, 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 510.00, 508.00, and 499.00 August and resistance is at 524.00, 532.00, and 534.00 August.

U.S. Sugar Supply and Use 1/
================================================================================
2020/21 2021/22 Est. 2021/22 Est. 2022/23 Proj.
Item Apr May May
================================================================================
1000 Short Tons, Raw Value
Beginning Stocks 1618 1705 1705 1813
Production 2/ 9233 9309 9229 9040
Beet Sugar 5092 5338 5254 5000
Cane Sugar 4141 3971 3976 4040
Florida 2090 1937 1942 2000
Louisiana 1918 1906 1906 1910
Texas 134 128 128 130
Imports 3195 3058 3469 3003
TRQ 3/ 1749 1568 1727 1379
Other Program 4/ 292 250 300 250
Non-program 1154 1240 1442 1373
Mexico 968 1050 1220 1323
High-tier tariff/other 186 190 221 50
Total Supply 14046 14072 14403 13856
Exports 49 35 35 35
Deliveries 12252 12470 12555 12555
Food 12135 12365 12450 12450
Other 5/ 116 105 105 105
Miscellaneous 40 0 0 0
Total Use 12341 12505 12590 12590
Ending Stocks 1705 1567 1813 1266
Stocks to Use Ratio 13.8 12.5 14.4 10.1
================================================================================
Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/
================================================================================
Supply Use
Fiscal Beginning Produc- Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
================================================================================

1000 Metric Tons, Actual Weight
Sugar
2021/22 Est.
Apr 1053 6167 50 4412 1939 919
May 1053 6167 50 4412 1937 921
2022/23 Proj.
Apr NA NA NA NA NA NA
May 921 6000 50 4422 1628 921
================================================================================
WASDE – 624 – 17 May 2022

COCOA
General Comments: New York and London were lower yesterday on ideas of increasing supplies available to the market.. 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 0 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 2410, 2370, and 2340 July, with resistance at 2510, 2570, and 2620 July. Trends in London are mixed. Support is at 1750, 1740, and 1720 July, with resistance at 1800, 1820, and 1840 July.

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