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 closed higher again yesterday despite a significant increase in production estimates from USDA. The late season weather in the Great Plains was better and the crop showed improvement. Even so, the estimates are still low and prices were able to move to moderate gains on the day. An increase in export volumes was noted by USDA because of the increased production, but the supply increase was bigger than the demand increase and ending stocks estimates increased.. The harvest is coming and the market is preparing for it. The trade is still worried about demand moving forward due to recession fears and Chinese lockdowns but is also worried about total US production potential. The Chinese quarantine is one week now instead of one month as before. It is possible that the continued Chinese lockdowns will continue to hurt demand for imported Cotton for that country and that a weaker economy in the west will hurt demand from the rest of the world.
Overnight News: The Delta will get mostly dry conditions and near to below normal temperatures and Southeast will get isolated to scattered showers and near to above normal temperatures. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 111.07 ct/lb. ICE said that certified stocks are now 4,552 bales, from 4,552 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 96.70, 77.50 December. Support is at 101.20, 99.50, and 97.60 December, with resistance of 106.00, 108.70 and 111.00 December.

Crop Progress
Date 4-Sep 28-Aug 2021 Avg
Cotton Bolls Opening 49 39 35 41
Cotton Harvested 8 4 8
Crop Condition
Very Poor Poor Fair Good Excellent
Cotton This Week 15 22 38 29 4
Cotton Last Week 15 16 34 30 5
Cotton Last Year 1 5 30 50 14

U.S. Cotton Supply and Use 1/
================================================================================
2020/21 2021/22 Est. 2022/23 Proj. 2022/23 Proj.
Item Aug Sep
================================================================================
Million Acres
Planted 12.09 11.22 12.48 13.79
Harvested 8.22 10.27 7.13 7.88

Pounds
Yield per Harvested
Acre 853 819 846 843

Million 480 Pound Bales
Beginning Stocks 7.25 3.15 3.50 3.75
Production 14.61 17.52 12.57 13.83
Imports 0.00 0.01 0.01 0.01
Supply, Total 21.86 20.68 16.08 17.59
Domestic Use 2.40 2.55 2.30 2.30
Exports, Total 16.35 14.62 12.00 12.60
Use, Total 18.75 17.17 14.30 14.90
Unaccounted 2/ -0.04 -0.24 -0.03 -0.01
Ending Stocks 3.15 3.75 1.80 2.70
Avg. Farm Price 3/ 66.3 92.0 97.0 96.0
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WASDE – 628 – 18 September 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
Aug 84.72 117.01 44.57 119.09 44.58 -0.13 82.77
Sep 84.79 118.45 44.61 118.63 44.58 -0.11 84.75
World Less China
Aug 47.46 89.51 35.57 81.59 44.53 -0.13 46.56
Sep 47.82 90.45 35.61 81.13 44.53 -0.11 48.33
United States
Aug 3.50 12.57 0.01 2.30 12.00 -0.03 1.80
Sep 3.75 13.83 0.01 2.30 12.60 -0.01 2.70
Total Foreign
Aug 81.22 104.44 44.57 116.79 32.58 -0.10 80.97
Sep 81.04 104.61 44.60 116.33 31.98 -0.10 82.05
Major Exporters 4/
Aug 31.69 60.13 2.19 33.62 28.45 -0.17 32.10
Sep 32.11 60.32 2.25 33.67 27.78 -0.17 33.40
Major Importers 8/
Aug 46.77 41.07 40.01 79.04 2.72 0.07 46.01
Sep 46.19 41.04 39.98 78.53 2.79 0.07 45.82
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WASDE – 628 – 28 September 2022

FCOJ
General Comments: FCOJ was a little higher in consolidation trading yesterday. USDA issued a lower production estimate for California oranges, but California oranges are mostly used for fresh consumption and not for juice. USDA increased the Florida production estimate to 41.1 million boxes, from 41.0 million last month. The weather remains generally good for production around the world for the next crop. Brazil has some rain and conditions are rated good. It has been dry recently in Sao Paulo but apparently not dry enough to affect the trees or fruit all that much. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures. It has been dry in Brazil. Mexican areas are showing mixed trends, with dry weather in some northern areas but better weather to the south. FCOJ inventories are now 39.8% less than a year ago.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed to down with no objectives. Support is at 162.00, 159.00, and 156.00 November, with resistance at 173.00, 175.00, and 178.00 November.

California Navel orange production for the 2022-2023 season is forecast at
1.52 million tons (38.0 million boxes) up 19 percent from last season. The
initial forecast is based on an objective measurement survey conducted in
California’s Central Valley from mid-June to the beginning of September. The
objective measurement survey indicated that fruit set was up 47 percent from
last year but the average fruit size was down 2 percent from last year.
Harvest is expected to begin in October.
This report was approved on September 12, 2022.

COFFEE
General Comments: New York and London were lower yesterday with most of the weakness in New York on ideas of improving conditions for the Brazil crop and hopes for better offers. There is concern that Brazil will produce less Coffee this year due to very dry conditions after early rains led to premature flowering. The forecasts call for some light and isolated to scattered showers in the region for this weekend. Vietnam has also been dry and wire reports from there indicate that production losses are likely. Demand for Coffee overall is thought to be less but the cash market remains strong. There is less Coffee on offer from origin, with Brazil offering less and Central America and Vietnam offering less as well. The weather in Brazil is good for Coffee production and any harvest activities. Temperatures are mostly above normal in Brazil and conditions are mostly dry. The dry weather is raising some concerns about the next crop potential but it is normally dry at this time of year.
Overnight News: ICE certified stocks are lower today at 0.602 million bags. The ICO daily average price is now 204.08 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. ICE NY said that 0 contracts were posted for delivery against September futures and that total deliveries for the month are now 1,399 contracts.
Chart Trends: Trends in New York are down with no objectives. Support is at 221.00, 217.00, and 215.00 December, and resistance is at 231.00, 234.00 and 237.00 December. Trends in London are mixed. Support is at 2240, 2220, and 2200 November, and resistance is at 2300, 2350, and 2390 November.

DJ Brazil Coffee Exports Fell 2.5% in August to 2.8M Bags, Cecafe Says
By Jeffrey T. Lewis
SÃO PAULO–Brazilian coffee exports fell in August as sales abroad of the robusta variety plummeted, according to exporters group Cecafe.
The South American country exported 2.8 million 132-pound bags of coffee last month, a decline of 2.5% from the same month a year earlier, Cecafe said Monday. Sales abroad of the arabica variety of coffee rose 10.6% to 2.4 million bags, while exports of robusta beans were down 74.2% at 89,244 bags.
Exports of ground, roast and soluble coffee fell 11.1% to 319,346 bags, Cecafe said.

SUGAR
General Comments: New York and London were higher yesterday but both markets remain in a trading range. Support came from a sharply lower US Dollar and selling appeared as the market tries to identify much demand. The New York market is worried that the lack of clarity about ethanol demand in Brazil will force mills down there to produce more Sugar for export. The London market had been looking for increased supplies from origin and now is more worried about demand after recent price strength. Brazil is harvesting its crop of Sugarcane and turning some of it into Ethanol but is making more Sugar and some of that Sugar is making it into export channels. The production mix could change in the short term to include more Sugar. Indian exporters are waiting for the government to announce its export policy for the coming year.
Overnight News: Brazil will get isolated showers. 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 1760, 1740, and 1710 March and resistance is at 1810, 1830, and 1850 March. Trends in London are mixed. Support is at 535.00, 530.00, and 527.00 December and resistance is at 553.00, 556.00, and 562.00 December.

DJ Brazil Sugar Crush Up 1.8% in 2H August, Helped by Dry Weather
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the second half of August compared with a year earlier, as harvest conditions improved with dry weather, according to industry group Unica.
Center-south mills crushed 44 million metric tons of cane in the period, an increase of 1.8% from the same period a year earlier, Unica said Tuesday. They produced 3.1 million tons of sugar, up 5.8%, and made 2.3 billion liters of ethanol, a decline of 1.2%.
The production mix for the second half of August was 48.45% sugar to 51.55% ethanol, compared with 46.5% sugar and 53.5% ethanol in the same period a year ago.
In the period from April 1 through Aug. 31, mills in the region crushed 366.3 million tons of cane, down 6.9% from the same period a year earlier. Sugar production fell 10.5%, to 21.8 million tons, and ethanol output declined 4.3%, to 17.9 billion liters.
The production mix for the season through Aug. 31 was 45.2% sugar to 54.8% ethanol, compared with 46.25% sugar and 53.75% ethanol in the same period a year earlier.

U.S. Sugar Supply and Use 1/
================================================================================
2020/21 2021/22 Est. 2022/23 Proj. 2022/23 Proj.
Item Aug Sep
================================================================================
1000 Short Tons, Raw Value
Beginning Stocks 1618 1705 1828 1753
Production 2/ 9233 9065 9151 9141
Beet Sugar 5092 5102 5138 5119
Cane Sugar 4141 3963 4013 4021
Florida 2090 1933 2000 1968
Louisiana 1918 1906 1910 1950
Texas 134 124 103 103
Imports 3221 3673 3501 3481
TRQ 3/ 1749 1648 1445 1562
Other Program 4/ 292 300 250 250
Non-program 1180 1725 1806 1669
Mexico 968 1355 1756 1619
High-tier tariff/other 212 370 50 50
Total Supply 14072 14443 14479 14375
Exports 49 35 35 35
Deliveries 12277 12655 12630 12630
Food 12161 12550 12525 12525
Other 5/ 116 105 105 105
Miscellaneous 40 0 0 0
Total Use 12367 12690 12665 12665
Ending Stocks 1705 1753 1814 1710
Stocks to Use Ratio 13.8 13.8 14.3 13.5
================================================================================

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.
Aug 1053 6185 50 4547 1794 947
Sep 1053 6185 50 4547 1794 947
2022/23 Proj.
Aug 947 6000 50 4547 1503 947
Sep 947 6000 50 4547 1503 947
================================================================================
WASDE – 628 – 17 September 2022

COCOA
General Comments: New York was higher and London was a little lower with the US Dollar moving lower, but ideas of big production and uncertain demand kept the markets in a sideways trend at best. Trends are mixed in both markets but the price action overall has been weak. Reports indicate that buyers of Cocoa have enough coverage for now and can afford to wait for lower prices to develop. Supplies of Cocoa are as large as they will be now for the rest of the marketing year. Reports of scattered showers along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. Ideas are still that good production is expected from West Africa for the year. The weather is good for harvest activities in West Africa but the harvest should be winding down now. The weather is good in Southeast Asia.
Overnight News: Isolated 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 normal temperatures. ICE certified stocks are higher today at 5.749 million bags. ICE NY said that 46 notices were posted for delivery against September contracts and that total deliveries for the month are now 2,687 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 2290 December. Support is at 2340, 2320, and 2310 December, with resistance at 2400, 2430, and 2450 December. Trends in London are mixed. Support is at 1820, 1800, and 1770 December, with resistance at 1880, 1900, and 1930 December.

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