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 closed a little lower yesterday as the US Dollar moved a little higher. The recent strength in the US Dollar has hurt just about all commodities prices lately. Price trends remain down. Traders are worried about a global recession and demand in that recession. Production is very short. The harvest is appearing n the market, and the market is preparing for it with sideways to lower prices. 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. 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 and Southeast will get mostly dry conditions and near to below normal temperatures. The Southeast will get some heavy rains from the hurricane on Friday and Saturday. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 88.84 ct/lb. ICE said that certified stocks are now 923 bales, from 923 bales yesterday. ICE aid that 2 notices were posted against October contracts and that total deliveries for the month are now 2 contracts.
Chart Trends: Trends in Cotton are mixed to down with objectives of 8720, 8190, and 7700 December. Support is at 86.60, 83.80, and 82.60 December, with resistance of 92.50, 95.00 and 97.80 December.
General Comments: FCOJ was higher yesterday on a slightly higher US Dollar and as a hurricane approaches Florida. The weather remains generally good for production around the world for the next crop but that could change this week depending on where the storm makes landfall. Brazil has some rain and conditions are rated good. More showers are in the forecast for the coming days. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures, but the weather is likely to change now with the arrival of the hurricane. How much damage potential exists depends on the track of the storm, but there probably will be some damage to Oranges. The storm is moving into the Gulf of Mexico and the projected track of the storm shows that it will land in the central or northern part of the state sometime today. Mexican areas are showing mixed trends, with dry weather in some northern areas but better weather to the south. FCOJ inventories are now 40.8% less than a year ago.
Overnight News: Florida should get heavy rains. Temperatures will average near normal. Brazil should get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 179.00, 175.00, and 174.00 November, with resistance at 185.00, 189.00, and 192.00 November.
General Comments: New York and London closed a little lower yesterday as the US Dollar moved a little higher by the end of the day and as the lack of deliveries from producers to the cash market continues. No one is ready to move Coffee at current price levels and there are doubts that there is a lot of Coffee available right now. Small offers in Arabica are reported from Brazil. There is a threat for a third year of La Nina which could negatively affect Coffee production again next year. There is concern that Brazil will produce less Coffee this year due to very dry conditions after early rains led to premature flowering. More showers and rains are in the forecast for the coming week. Vietnam has also been dry and wire reports from there indicate that production losses are likely. A typhoon is coming to Vietnam but ideas are that damage to Coffee and trees will be minimal and confined to minor production areas in the north of the country. The cash market remains strong.
Overnight News: ICE certified stocks are lower today at 0.449 million bags. The ICO daily average price is now 196.25 ct/lb. Brazil will get scattered showers with near normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are up with objectives of 232.00, 241.00, and 242.00 December. Support is at 223.00, 217.00, and 216.00 December, and resistance is at 232.00, 234.00 and 237.00 December. Trends in London are mixed. Support is at 2170, 2150, and 2100 November, and resistance is at 2260, 2300, and 2350 November.
General Comments: New York and London closed a little lower as the US Dollar was firm by the end of the day. Futures held together as the supply available to the market remains short.. The New York market is worried about ethanol demand in Brazil will force mills down there to continue to produce more Sugar for export and Crude Oil futures have been weaker recently. The Brazilian president has lowered the fuel taxes in Brazil and this is squeezing the profit margins of the mills. The mills could produce much more Sugar over time due to the tax changes but so far have not produced enough to meet the demand. The London market had been looking for increased White Sugar supplies from origin. Indian White Sugar exports have so far not been enough to meet the demand.
Overnight News: Brazil will get scattered showers. Temperatures should average near normal. India will get scattered showers in the east and near to below normal temperatures.
Chart Trends: Trends in New York are mixed to down with objectives of 1710, 17680, and 1640 March. Support is at 1750, 1720, and 1690 March and resistance is at 1800, 1830, and 1850 March. Trends in London are mixed. Support is at 520.00, 510.00, and 500.00 December and resistance is at 541.00, 543.00, and 549.00 December.
DJ Brazil Sugar Crush Up 2.5% in 1H Sept. as Cane Quality Improved
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the first half of September compared with a year earlier, as the quality of the raw material improved, according to industry group Unica.
Center-south mills crushed 39.5 million metric tons of cane in the period, an increase of 2.5% from the same period a year earlier, Unica said Tuesday. They produced 2.9 million tons of sugar, up 12.2%, and made 2.1 billion liters of ethanol, an increase of 2.0%.
The production mix for the first half of September was 48% sugar to 52% ethanol, compared with 44.9% sugar and 55.1% ethanol in the same period a year ago.
The higher quality of the cane harvested in the period contributed to the rise in production, as did an increase in output of corn ethanol, according to Unica technical director Antonio de Padua Rodrigues.
In the period from April 1 through September 15, mills in the region crushed 405.8 million tons of cane, down 6.1% from the same period a year earlier. Sugar production fell 8.4% to 24.6 million tons, and ethanol output declined 3.7% to 20.1 billion liters.
The production mix for the season through September 15 was 45.5% sugar to 54.5% ethanol, compared with 46.1% sugar and 53.9% ethanol in the same period a year earlier.
General Comments: New York and London were higher yesterday despite strength in the US Dollar. The fundamentals still argue for lower prices but the price action yesterday implied that higher prices are coming to both markets in the coming days.. Ideas of big production and uncertain demand are still around but reports from Africa indicate that demand has improved lately. Reports indicate that buyers of Cocoa have enough coverage for now and can afford to wait for lower prices to develop but the buy side of the market might be waiting too long to extend coverage. 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 in West Africa. 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 slightly lower today at 5.692 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2200 December. Support is at 2190, 2160, and 2130 December, with resistance at 2300, 2320, and 2350 December. Trends in London are up with objectives of 1920 December. Support is at 1900, 1880, and 1870 December, with resistance at 1930, 1970, and 2000 December.