- Softs Report 02/20/19
COTTON General Comments: Cotton was a little higher in recovery trading yesterday. Trends are down on the daily and the weekly charts. Trends are [...]...
- Softs Report 02/19/19
COTTON General Comments: Cotton was lower last week and made new lows for the move. Trends are down on the daily and the weekly [...]
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Futures Market News and Commentary
March arabica coffee (KCH19) this morning is down -0.80 (-0.82%) and March ICE robusta coffee (RMH19) is -6 (-0.40%). Coffee prices are lower this morning, although Mar arabica coffee remained just above Tuesday's 2-month nearest-futures low. Signs of ample rain in Brazil's coffee-growing regions has pressured coffee prices the past two sessions after Somar Meteorologia reported on Monday that 79.6 mm of rain fell in the past week in Minas Gerais, Brazil's biggest arabica coffee-growing region, or 186% of the historical average, which should boost soil moisture levels and coffee yields. Mar robusta coffee is also seeing pressure on signs of increased supplies in Vietnam, the world's biggest robusta producer, after Vietnam's General Department of Customs reported that Vietnam Jan coffee exports rose +19.4% m/m +41.1% y/y to 183,693 MT. Coffee prices are also seeing downward pressure from ample coffee supplies after 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. The downside in arabica coffee was limited this morning after the Brazilian real rallied to a 2-week high against the dollar, which discourages exports by Brazil's coffee producers.
May ICE NY cocoa (CCK19) this morning is down -36 (-1.53%) and May ICE London cocoa (CAH19) is down -15 (-0.85%). Cocoa prices are lower this morning on signs of strong cocoa production in West Africa. Monday's data from the Ivory Coast, the world's biggest cocoa producer, showed that Ivory Coast farmers sent 1.451 MMT of cocoa to ports during Oct 1-Feb 17, up +8.3% from the same time last year. Last 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. Another bearish factor is an increase in current supplies after cocoa stockpiles held at port warehouses monitored by the ICE Futures U.S. exchange rose to a 3-1/2 month high of 3.87 mln bags on Monday. May NY cocoa rallied to a 1-month high Tuesday 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.
May NY world sugar #11 (SBK19) this morning is up +0.03 (+0.23%) and May ICE London white sugar (SWK19) is down -0.40 (-0.11%). Strength in the Brazilian real is lifting May NY sugar this morning as the real climbed to a 2-week high against the dollar, which discourages exports from Brazil's sugar producers. Sugar prices were undercut, however, by a decline in crude oil prices, which is negative for ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward sugar ethanol production rather than ethanol production, thus boosting sugar supplies. May NY sugar on Tuesday rallied to a 1-month high and May London sugar rose to a 3-week high on supply concerns and stronger demand. India's National Federation of Cooperative Sugar Factories Ltd. on Tuesday projected that India 2019/20 sugar production will fall by at least -5% y/y to a 3-year low of 30 MMT. Also, Indonesia, the world's largest sugar importer, may import more sugar this year after Indonesia's Sugar Refiners Association said refiners may import 3.2 MMT of raw sugar in 2019, up +5.3% y/y. In addition, Petrobras hiked Brazil's wholesale gasoline prices on Tuesday to 1.5970 reals/liter from 1.5581 reals/liter, which is positive for ethanol prices. Sugar prices are seeing underlying support from Unica's report last 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).
Cotton futures are trading 31 to 33 points higher in the front months this morning. They were up 7 to 33 points in most contracts on Tuesday. A weaker US dollar was supportive, along with higher crude oil. First Notice day for March Cotton deliveries is on Friday. The US/China trade talks are continuing this week in Washington DC, with the higher level talks taking place later in the week. Managed money spec funds were continuing to add to their CFTC net short position in the week of Jan 29, at -11,412 contracts in cotton futures and options on that date. The Cotlook A Index was up 10 points on February 18 to 80.05 cents/lb. The USDA Adjusted World Price is 62.27 cents/lb through this Thursday. --provided by Brugler Marketing & Management