Softs Futures Prices
- Paragon Investments' Futures File: Gasoline, Coffee & Wheat
Our weekly column looks at rallies in the energy markets while coffee & wheat drop.
- OJ, Coffee pattern down
Dollar run at 11 hits sale,Stocks late today, or Mon? Beans hold.
- RE: Stocks, LHQ, Vert Up Few%.
Stocks, round up the shorts,
- Softs Report 02/15/19
COTTON General Comments: Cotton was slightly higher in consolidation trading. Trends are down on the daily charts. The USDA reports on Friday gave no [...]...
- Cocoa (CC) Trying to Resume 4 Month Upchannel
Cocoa (CC) edged higher yesterday, closing at a 5 week downchannel resistance (on the 4hr chart). Significantly, CC is trying to resume a 4 month upchannel...
- Softs Report 02/14/19
COTTON General Comments: Cotton was slightly higher in consolidation trading and after two days of big fund selling. Trends are down on the daily [...]...
Futures Market News and Commentary
Cotton futures were 9 to 15 points higher in most contracts on Friday, after losses of 3.21% this week. Traders were covering shorts ahead of the long weekend. Delayed CFTC data showed specs adding another 1,303 contracts to their net short position in Cotton futures and options on Jan 22 to 10,038 contracts. The weekly Cotton Classing report from USDA showed that 232,083 bales of upland cotton was classed in the week ending on Thursday. That brings the MY total to 16.273 million bales for upland and 16.986 million bales including Pima. The Cotlook A Index was up 25 points on February 14 to 79.65 cents/lb. The USDA Adjusted World Price was updated to 62.27 cents/lb on Thursday.Mar 19 Cotton closed at 70.220, up 9 points,May 19 Cotton closed at 71.860, up 15 pointsJul 19 Cotton closed at 73.240, up 17 points--provided by Brugler Marketing & Management
May NY world sugar #11 (SBK19) on Friday closed up +0.58 (+4.67%) and May ICE London white sugar (SWK19) closed up +12.90 (+3.77%). Sugar prices rallied Friday with May NY sugar at a 3-week high and May London white sugar at a 2-week high. Strength in the Brazilian real and in crude oil prices Friday fueled short-covering in sugar futures. The Brazilian real rose to a 1-week high against the dollar, which discourages exports by Brazil's sugar producers. Meanwhile, crude oil climbed to a 1-1/2 week high, which benefits ethanol prices and may prompt Brazil’s sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies. May London white sugar saw technical support after the contract on Friday moved above its 200-day moving average. May NY sugar tumbled to a 5-week low Thursday after India raised the minimum selling price of sugar by 6.9%, below expectations for a 10% increase. A higher minimum sugar price may prompt India's sugar millers to sell more sugar in the domestic market and potentially reduce its sugar exports and global supply. A positive for sugar prices is stronger demand for Brazil's ethanol after Unica on Tuesday reported that Brazil millers sold 1.83 billion liters of hydrous ethanol in the domestic market in Jan, up +32.5% y/y and a record volume for a January. Unica also reported on Tuesday that Brazil's 2018/19 Center-South sugar production during Oct-Jan was down -26.4% at 26.36 MMT, with 35.4% of cane used for sugar (down from 46.9% last year), and 64.56% of cane used for ethanol production (up from 53.1% last year).Big Picture Sugar Market Factors: Bullish factors for sugar include (1) Conab's hike in its Brazil 2018/19 ethanol production estimate to a record 32.2 bln liters (+18.6% y/y), citing the action by Brazil's sugar millers to divert less cane juice to produce sugar as global sugar inventories are seen rising and prices are falling, (2) concern about smaller global production after Unica forecasted that Brazil's Center South 2018/19 sugar production will fall -28% y/y to 26 MMT, (3) the action by India, the world’s second-biggest sugar producer, to raise the minimum selling price of sugar to 31 rupees/kg from 29 rupees/kg, which may prompt India's sugar millers to sell more sugar in the domestic market and potentially reduce its sugar exports and global supply, and (4) stronger demand for Brazil's ethanol after Unica reported Brazil millers sold 1.83 billion liters of hydrous ethanol in the domestic market in Jan, up +32.5% y/y and a record volume for a January. Bearish factors include (1) ISO's forecast that global 2018/19 sugar production will rise +0.6% y/y to a record 185.2 MMT and that there will be a 2018/19 sugar surplus of 2.2 MMT (vs 2017/18's 7.3 MMT), (2) USDA's FAS forecast for 2018/19 sugar production in India, the world's second-largest sugar producer, to climb +5.3% y/y to a record 35.9 MMT, (3) record sugar output from Thailand, the world's fourth-largest sugar producer, after the Thailand Office of Cane and Sugar Board reported that Thailand 2017/18 sugar production rose to a record 14.47 MMT, (4) a glut of U.S. gasoline after U.S. EIA gasoline inventories rose to a record high of 259.6 million bbl last month, which is negative for ethanol prices and may prompt Brazil's sugar producers to divert more cane crushing toward sugar production instead of ethanol production, which would boost sugar supplies.
March ICE NY cocoa (CCH19) on Friday closed up +75 (+3.36%) and March ICE London cocoa (CAH19) closed up +47 (+2.74%). Cocoa prices rallied Friday with Mar NY cocoa at a 4-week high and Mar London cocoa at a 6-week high on weather concerns in West Africa. Forecasts for above-normal temperatures with dry conditions over the next week in West Africa may increase stress on Ivory Coast and Ghana cocoa crops and spurred fund buying in cocoa futures. The outlook for robust cocoa production in West Africa has weighed on prices after Monday's data from the Ivory Coast, the world's biggest cocoa producer, showed that Ivory Coast farmers sent 1.413 MMT of cocoa to ports during Oct 1-Feb 10, up +8.3% from the same time last year. Also, Monday's data from Ghana, the world's second-biggest cocoa producer, showed strong output as cocoa purchases from Ghana cocoa farmers rose +15.4% y/y to 644,318 MT during the first seventeen weeks of the harvest from Oct 5-Jan 31. Mar London cocoa was also weighed down by weakness in GBP/USD which fell to a 1-month low Thursday. Weakness in GBP/USD undercuts the price of London cocoa that is priced in British pounds. Cocoa prices have underlying support from firm global demand with North American Q4 cocoa processing up +1.2% to 117,526 MT (Jan 18 report), Q4 European cocoa grindings up +1.6% y/y to 359,103 MT (Jan 16 report), and Asian Q4 cocoa grindings up +6.3% y/y to 208,900 MT.Big Picture Cocoa Market Factors: Bullish factors for cocoa include (1) the forecast from Radiant Solutions that "mid-crop growth will be minimal" for cocoa crops as weather conditions throughout the Ivory Coast and Ghana have been overwhelmingly dry, and (2) strong cocoa demand in Asia after the Singapore Cocoa Association reported that Asia Q4 cocoa grindings unexpectedly rose +6.3% y/y to 208,900, stronger than expectations for a decline of -1.3% y/y, and as Asia 2018 full-year cocoa grindings rose +7.8% y/y to 780,956 MT, the highest since data began in 2011. Bearish factors for cocoa include (1) ICCO's forecast for a small global cocoa surplus of +22,000 MT in 2017/18, although that is down sharply from 2016/17's 6-year high surplus of 296,000 MT, (2) the projection from Barry Callebaut, the world's biggest cocoa processor, that global supply may match demand in 2019 amid robust global cocoa output, and (3) signs of tepid demand after the National Confectioners Association reported North American Q4 cocoa processing rose +1.2% to 117,526 MT, weaker than expectations of +2.5%, and after the European Cocoa Association reported that Q4 European cocoa grindings rose +1.6% y/y to 359,103 MT, below expectations of +2.0% y/y.
March arabica coffee (KCH19) on Friday closed up +0.10 (+0.10%) and March ICE robusta coffee (RMH19) closed up +17 (+1.12%). Coffee prices moved higher Friday as strength in the Brazilian real sparked short-covering in coffee futures. The Brazilian real climbed to a 1-week high against the dollar Friday, which discourages exports from Brazil's coffee producers. Mar arabica coffee on Thursday fell to a 1-3/4 month nearest-futures low due to ample rain in Minas Gerais, Brazil's biggest coffee region. Somar Meteorologia reported Monday that 46.8 mm of rain fell in Minas Gerais during the week, or 100% of the historical average, which should boost soil moisture levels and coffee yields. Coffee prices are also seeing downward pressure from ample coffee supplies after exporter group CeCafe on Monday reported that Brazil Jan green coffee exports rose +20% y/y to 3.05 mln bags, a record high for the month of January. Also, the International Coffee Organization (ICO) last Monday reported that global coffee exports during Oct-Dec were up +8.1% y/y at 30.9 mln bags. In addition, ICE-monitored coffee inventories are just below the 4-1/2 year high of 2.489 mln bags posted on Jan 23.Big Picture Coffee Market Factors: Bullish factors for coffee include (1) projections from Conab, Brazil's official government forecasting agency, that Brazil 2019/20 coffee production will fall -18% y/y to 50.5 mln bags as the crop moves into the lower-yielding half of a 2-year cycle, (2) ICO's forecast for a 2017/18 global coffee deficit of -3.5 mln bags, and (3) USDA projections that global 2018/19 coffee consumption will climb +2.9% to a record 163.219 mln bags. Bearish factors include (1) the +20% y/y surge in Brazil Jan green coffee exports to 3.05 mln bags, the highest ever for a January, (2) ample supplies as ICO data showed that global 2017/18 coffee exports rose +2% y/y to 121.9 mln bags and that global 2018/19 coffee exports Oct-Dec were up +8.1% y/y at 30.9 mln bags, (3) ICO's forecast for a global 2018/19 coffee surplus of 2.29 mln bags and its projection that a second year of surplus will depress coffee prices over the next few months, (4) heavy coffee supply as ICE-monitored coffee inventories climbed to a 4-1/2 year high of 2.489 mln bags, (5) Conab projections for Brazil's 2018 coffee production to climb +37% y/y to a record 61.7 mln bags as crops are in the higher-yielding half of their biennial cycle, and (6) USDA projections for global 2018/19 coffee production to climb +7.1% y/y to a record 171.166 mln bags and for global 2018/19 coffee ending stocks to increase by +11.6% to a 3-year high of 32.812 mln bags.