- Sugar Prices Hit A 2 Month High
Here are my thoughts...
- Softs Report 01/15/19
COTTON General Comments: Cotton was a little higher . World production and supplies are going still lower due to bad weather in the growing [...]
- The overnight session gets us going in the Cocoa market!
Time to reward the market and move some stops...or take profits if satisfied. Well done to all those participating!!
- Softs Report 01/14/19
COTTON General Comments: Cotton was near unchanged last week and is consolidating just above major support near 7000 on the weekly charts. Weak overall...
- Here Are My Coffee Thoughts
All based On Weather
- Paragon Investments' Futures File: Cattle & Sugar Climbing
This week's column looks at the ongoing rallies in cattle and sugar.
Futures Market News and Commentary
Cotton futures posted 63 to 90 point losses in most contracts on Turnaround Tuesday. The Dollar was stronger on the day. The Cotton Association of India cut their crop estimate to 33.5 million lakh bales. They also reduced exports to 2.4 million lakh bales. This only 47% of last year’s exports, leaving some room for the US. Trade sources report that Asian demand is picking up with cotton futures down in the low 70’s. The Cotlook A Index was down 25 points on January 14 to 82.15 cents/lb.Mar 19 Cotton closed at 72.360, down 63 points,May 19 Cotton closed at 73.720, down 79 pointsJul 19 Cotton closed at 74.890, down 90 points--provided by Brugler Marketing & Management
March arabica coffee (KCH19) on Tuesday closed down -1.45 (-1.41%) and March ICE robusta coffee (RMH19) closed down -1 (-0.07%). Coffee prices fell to 1-1/2 week lows Tuesday after Cecafe reported Brazil Dec green coffee exports surged +27% y/y to 3.36 mln bags, the highest ever for a December. An overabundance of coffee supply continues to weigh on prices as ICE-monitored coffee inventories Monday climbed to a 4-1/2 year high of 2.475 mln bags. Also, the International Coffee Organization (ICO) last Thursday forecast a global 2018/19 coffee surplus of 2.29 mln bags and said a second year of surplus will depress coffee prices over the next few months. Losses in arabica coffee were limited as data from Somar Meteorolgia showed that rainfall in Minas Gerais measured 9.5 mm in the past week, only 13% of the historical average. Also, Brazilian exporter Comexim forecasts that Brazil 2019/20 coffee production will fall -7.7% y/y to 58.2 million bags as the crop is in the lower-yielding half of its biennial cycle. Robusta coffee has support on signs of smaller robusta supplies after Vietnam Customs last Thursday reported that Vietnam Dec robusta coffee exports fell -6.1% y/y to 153,906 MT. On the bearish side, the International Coffee Organization (ICO) reported last Tuesday that global 2018/19 coffee exports Oct-Nov rose +13% y/y to 20.6 mln bags. The outlook for a record coffee crop in Brazil and a global supply glut is a major bearish factor for coffee prices. Conab, Brazil's national supply agency, recently raised its Brazil 2018/19 coffee production estimate to a record 61.7 mln bags (+37% y/y) from a Sep forecast of 59.9 mln bags.
March ICE NY cocoa (CCH19) on Tuesday closed down -67 (-2.86%) and March ICE London cocoa (CAH19) closed down -12 (-0.72%). Cocoa prices closed lower Tuesday with Mar NY cocoa at a 3-week low and Mar London cocoa at a 4-week low on signs of robust cocoa production in West Africa. Monday's data from the Ivory Coast, the world's biggest cocoa producer, showed that Ivory Coast farmers sent 1.19 MMT of cocoa to ports during Oct 1-Jan 13, up +12.2% from the same time last year. Also, data from Ghana, the world's second-biggest cocoa producer, showed strong output after the Ghana Cocoa Board reported that cocoa purchases from Ghana cocoa farmers rose +4.7% y/y to 455,663 MT during the first twelve weeks of the harvest from Oct 5-Dec 28. Cocoa prices last week rallied to a 6-month high on crop concerns in West Africa after Radiant Solutions said "mid-crop growth will be minimal" for cocoa crops as weather conditions throughout the Ivory Coast and Ghana have been overwhelmingly dry. Also, signs of stronger demand are positive for cocoa prices after the Malaysia Cocoa Board reported Malaysia Q4 cocoa grindings rose +22.5% y/y to 72,451 MT. In another supportive factor, Commitment of Traders (COT) data showed that hedge funds boosted their net-long London cocoa positions in the week ended Jan 8 to 11,004 positions, the most in 5 months.
March NY world sugar #11 (SBH19) on Tuesday closed up +0.41 (+3.22%) and March ICE London white sugar (SWH19) closed up +11.30 (+3.29%). Sugar prices rallied to 5-week highs Tuesday on reduced output in Brazil after Unica reported 2018/19 Brazil Center-South sugar production through December was down -26.5% y/y at 26.339 MMT, with the percent of sugar cane used for ethanol at 65.53% (up from 53.07% last year) and the percent of cane used for sugar at 35.47% (down from 46.93% last year). Strength in crude oil prices Tuesday is another bullish factor for sugar since higher oil prices are positive for ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies. On the negative side, Brazil's hydrous ethanol prices fell for a second week to 1.6354 real per liter the week ended Jan 11, down -12% y/y and the lowest for this time a year in 3 years, which may prompt Brazil's sugar producers to divert more cane crushing toward sugar production with the lower ethanol prices.