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

DJ U.N. Warns of Food-Security Risks as Global Food Imports Approach $2 Trillion
By Yusuf Khan
The United Nations is warning of significant risks to food security around the world, especially in poorer countries, as soaring food and fertilizer prices place further pressure on governments to secure supplies.
The UN’s Food and Agriculture Organization said in its latest report Friday that the global food import bill is estimated to rise to an all-time high of $1.94 trillion in 2022, up 10% from last year, pushed higher by concerns around supply from war, climate change and economic instability.
“Worryingly, many economically vulnerable countries are paying more while receiving less food,” the UN FAO said in its Food Outlook report, referring to worsening conditions for importing countries.
The new figure shows how much more nations are paying for their food this year, with a slowing global economy and depreciating currencies against the dollar adding to strains around food security. Countries are unable to import as much food as in prior years amid higher prices.
The UN FAO said that increased climate variability and geopolitical tensions were two of the biggest catalysts to food-security worries.
Devastating heatwaves in Europe severely hampered grain output, with corn production dropping to a 15-year low due to subsequent droughts. Flooding in Pakistan and China lowered rice-crop yields, while uneven weather patterns in the U.S. hampered wheat output.
This comes on top of the significant disruptions to Black Sea grain and fertilizers, with cultivation and exports hugely damaged by the war in Ukraine and the subsequent strain on shipping in the region. The UN FAO said that world wheat trade is expected to fall 1% year-on-year because of a lack of exports coming from the region, as well as increased protectionism from India on domestic supplies.
One of the biggest issues that emerged from the war in Ukraine was that poorer countries in the Middle East and North Africa were most likely to be affected. These have very high import dependencies and have been further weakened by depreciating currencies against the dollar.
Fertilizer production has also been a major concern. The UN FAO said that the world agricultural input import bill is forecast to reach a new high of $424 billion in 2022, representing a hike of 48% in costs compared to 2021, with 86% of this down to higher energy and fertilizer prices.
The UN FAO said it is likely that poorer countries would feel the strain of this the most, and lower application of fertilizer would take place–lowering productivity and total output. It added that “high world fertilizer prices are likely to extend into 2023, with negative repercussions for global agricultural output and food security,” going forward.
Food prices have started to settle after reaching all-time highs earlier this year, spurred by the war in Ukraine, with the UN FAO’s price index in October reading at 135.9 points, down from 159.7 in March.
However, the October reading was largely unchanged from September because prices for grains jumped during the month on worries over the security of the Black Sea Grain Initiative, causing markets to remain volatile. The UN FAO’s cereal price index stood at 152.3 points in October, 11% higher than a year ago.

COTTON
General Comments: Cotton was mixed to a little higher as USDA raised production estimates in its reports on Wednesday. Demand was left unchanged and ending stocks trended higher at 300,000 bales. Economic data and production and supply estimates are coming out this week and the buyers hesitated to buy a lot of Cotton. There are hopes that China is about to open again despite its zero tolerance Covid policies. Chinese demand is especially a problem as parts of Wuhan and Shanghai in China got locked down again last week. Trends are now mixed on the charts. Production in the US is very short. 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 will hurt demand from the rest of the world.
Overnight News: The Delta will get mostly dry conditions and near normal temperatures and Southeast will get scattered showers and above normal temperatures. Texas will have mostly dry conditions and below normal temperatures. The USDA average price is now 85.74 ct/lb. ICE said that certified stocks are now 880 bales, from 880 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 89.60, 100.20, and 125.00 December. Support is at 84.20, 80.80, and 79.60 December, with resistance of 89.20, 89.80 and 90.10 December.

DJ On-Call Cotton – Nov 10
As of Nov 4. 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.
Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Dec 22 15,266 22,402 -7,136 8,511 13,405 -4,894
Mar 23 26,605 23,704 2,901 9,183 7,996 1,187
May 23 9,538 9,217 321 1,038 974 64
Jul 23 15,810 15,233 577 1,251 1,138 113
Oct 23 0 0 0 0 0 0
Dec 23 7,523 7,839 -316 16,147 15,265 882
Mar 24 494 494 0 0 75 -75
May 24 285 373 -88 0 0 0
Jul 24 349 349 0 0 0 0
Dec 24 440 440 0 991 431 560
Mar 25 0 0 0 0 0 0
May 25 0 0 0 0 0 0
Total 76,310 80,051 -3,741 37,121 39,284 -2,163
Open Open Change
Int Int
Dec 22 88,567 100,921 -12,354
Mar 23 85,680 76,056 9,624
May 23 25,370 22,791 2,579
Jul 23 25,458 24,200 1,258
Oct 23 2 2 0
Dec 23 21,818 22,083 -265
Mar 24 2,567 2,510 57
May 24 470 587 -117
Jul 24 759 752 7
Dec 24 1,358 1,290 68
Mar 25 20 20 0
May 25 2 2 0
Total 252,071 251,214 857

FCOJ
General Comments: FCOJ was lower yesterday. Historically low estimates of production due in part to the hurricane and in part to the greening disease has hurt production. The weather remains generally good for production around the world for the next crop but not for production areas in Florida that have been impacted in a big way by the storm. Brazil has some rain and conditions are rated good. Mostly dry conditions are in the forecast for the coming days.
Overnight News: Florida should get heavy rains. Temperatures will average above normal. Brazil should get scattered showers and near to above normal temperatures. ICE said that 0 contracts were posted for delivery against November futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 204.00, 202.00, and 199.00 January, with resistance at 222.00, 228.00, and 234.00 January.

COFFEE
General Comments: New York and London closed higher yesterday as the US Dollar moved sharply lower. Weather conditions are good in Brazil and the rest of Latin America and supplies available to the market should keep increasing. Ideas are that the market will have enough Coffee when the next harvest comes in a few months. Ideas of a significant recovery in world production next year remains the main cause for any selling There are still reports of improving growing conditions and increasing availability of Coffee in Brazil. More showers and rains are in the forecast in Brazil Coffee areas for this week. The rest of South America and Central America are reported to be in good condition. Vietnam has scattered showers in Coffee areas.
Overnight News: ICE certified stocks are higher today at 0.448 million bags. The ICO daily average price is now 158.51 ct/lb. Brazil will get scattered showers with below normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are mixed to down with objectives of 159.00 and 144.00 December. Support is at 163.00, 161.00, and 158.00 December, and resistance is at 177.00, 183.00 and 186.00 December. Trends in London are mixed to down with objectives of 1750 and 1670 January. Support is at 1790, 1760, and 1730 January, and resistance is at 1840, 1880, and 1900 January.

DJ Brazil Coffee Exports Fell 3.2% in Oct to 3.47M Bags, Cecafe Says
By Jeffrey T. Lewis
SÃO PAULO–Brazilian coffee exports fell in October amid logistics difficulties and as domestic demand for robusta beans limited stocks available for sales abroad, according to exporters group Cecafe.
The South American country exported 3.47 million 132-pound bags of coffee last month, a decline of 3.2% from the same month a year earlier, Cecafe said Thursday. Sales abroad of the arabica variety of coffee rose 3.3% to 3.07 million bags, while exports of robusta beans dropped 63.3% to 110,675 bags.
Exports of ground, roast and soluble coffee fell 7.2% to 249,009 bags, Cecafe said.
The global export market “continues with less availability of containers, congested ships in ports in the Northern Hemisphere, mainly the USA and Europe, difficulties in obtaining bookings, cargo rollovers and very high costs, which hinders the work of exporters,” said Cecafe President Günter Häusler.
“Furthermore, there is greater domestic industry demand for robusta coffees, limiting the shipment of this variety.”

SUGAR
General Comments: New York and London closed mixed yesterday, with nearby months holding firm on ideas of tight current supplies. Trends are still up in both markets. The weather in Brazil remains good for the next crop. More ideas that supplies of White Sugar would soon be increasing for the market could limit the upside for the London market. World Sugar market is expected to be in a big surplus production next year. Ideas of a world surplus in the coming year are hurting the prices in both markets, but supply remains tight for now. Brazil Sugar offers are likely to drop in volume with the return of Lula as president of Brazil He is much more environmentally focused than the previous president weas and is likely to return the ethanol and biofuels mandates to previously higher levels. Indian exporters are now selling into the world market and have been aggressively looking to sign sales contracts. India has had a very good production year and estimated Sugar production is now at 36.5 million tons with 9.0 million tons available for export.
Overnight News: Brazil will get scattered showers. Temperatures should average near to below normal. India will get scattered showers in the east and near to below normal temperatures.
Chart Trends: Trends in New York are up with objectives of 1970 March. Support is at 1880, 1850, and 1840 March and resistance is at 1940, 1970, and 2000 March. Trends in London are up with objectives of 526.00 and 539.00 March. Support is at 520.00, 513.00, and 507.00 March and resistance is at 536.00, 539.00, and 542.00 March.

DJ Brazil Sugar Crush Up 85% in 2H of October at 31.5M Tons
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the second half of October, as more mills continued operations in the period compared with a year earlier, according to industry group Unica.
Center-south mills crushed 31.5 million metric tons of cane in the period, an increase of 85% from the same period a year earlier, Unica said Thursday. They produced 2.1 million tons of sugar, up 145.4%, and made 1.6 billion liters of ethanol, an increase of 49%.
The production mix for the second half of October was 48.5% sugar to 51.5% ethanol, compared with 37% sugar and 63% ethanol in the same period a year ago.
A drought last year hurt the center-south sugar crop, leading many mills to close earlier than normal in 2021 because of a lack of raw material, Unica said. There were 208 mills still operating as of Nov. 1 this year, compared with 128 mills last year, according to the group.
In the period from April 1 through Oct. 31, mills in the region crushed 490.2 million tons of cane, down 2.9% from the same period a year earlier. Sugar production fell 3.1% to 30.3 million tons, and ethanol output declined 2.7% to 24.4 billion liters.
The production mix for the season through Oct. 31 was 45.9% sugar to 54.1% ethanol, compared with 45.3% sugar and 54.7% ethanol in the same period a year earlier.

COCOA
General Comments: New York closed higher again yesterday but London didn’t as the US Dollar moved sharply lower. Trends remain up in both markets and both markets re being supported by reports of reduced arrivals in Ivory Coast ports. Good production is reported and traders are worried about the world economy moving forward and how that could affect demand. 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. 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 scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 5.533 million bags.
Chart Trends: Trends in New York are up with no objectives. Support is at 2500, 2470, and 2450 December, with resistance at 2570, 2600, and 2630 December. Trends in London are up with objectives of 2060 December. Support is at 2050, 2020, and 2000 December, with resistance at 2100, 2130, and 2160 December.

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