- Softs Report 01/18/19
DJ U.S. Weighs Lifting China Tariffs to Hasten Trade Deal, Calm Markets By Bob Davis in Washington and Lingling Wei in Beijing U.S. [...]
- Coffee Prices Hovering Near 14 Year Low
- Arabica Coffee (KC) Weekly MACD Green Line Flattening
Arabica Coffee (KC) consolidated Wednesday's bounce yesterday, and appears to be forming a higher low versus the early Jan and December lows. Long...
- Softs Report 01/17/19
UPDATE 2-USDA recalls workers to help with farm loans, taxes; data uncertain – 16-Jan-2019 04:15:56 PM To view this story on Eikon, click [...]
- Softs Report 01/16/19
COTTON General Comments: Cotton was lower as the US Dollar moved a little higher and most ag markets found new speculative selling. Prices overall [...]...
- Sugar Prices Hit A 2 Month High
Here are my thoughts...
Futures Market News and Commentary
Cotton futures were 20 to 48 points lower in most contracts on Friday. Nearby March was up 1.93% this week. Traders were taking profits ahead of the long weekend, with pressure also from a higher US dollar. The markets will be closed on Monday in observance of Martin Luther King Jr. day. The Cotlook A Index was up 100 points on January 17 to 82.90 cents/lb. USDA showed that 14.949 million bales of upland cotton have been classed as of January 17, with the total including Pima at 15.545 million bales. Estimated AWP was 63.06 last week, and computes to 64.07 for the coming week.Mar 19 Cotton closed at 73.890, down 48 points,May 19 Cotton closed at 75.320, down 34 pointsJul 19 Cotton closed at 76.590, down 20 points--provided by Brugler Marketing & Management
March ICE NY cocoa (CCH19) on Friday closed down -28 (-1.20%) and March ICE London cocoa (CAH19) closed down -13 (-0.77%). Cocoa prices retreated Friday on demand concerns after the National Confectioners Association reported North American Q4 cocoa processing rose +1.2% to 117,526 MT, weaker than expectations of +2.5%. The European Cocoa Association earlier reported on Wednesday that Q4 European cocoa grindings rose +1.6% y/y to 359,103 MT, below expectations of +2.0% y/y. Losses were contained 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. Also, Asia 2018 full-year cocoa grindings rose +7.8% y/y to 780,956 MT, the highest since data began in 2011. Mar NY cocoa dropped to a 3-week low on Tuesday and Mar London cocoa fell to a 1-month 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. Crop concerns may limit losses in cocoa prices after Radiant Solutions said in a report Thursday that less soil moisture in cocoa regions of West Africa is "keeping mid-crop growth stressed." The most recent data from the U.S. Climate Prediction Center showed below-average rainfall in most of the Ivory Coast from Jan 6-12.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, (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, and (3) tighter supplies as cocoa inventories held at port warehouses monitored by ICE Futures have steadily declined over the past 7 months and are just above a 1-3/4 year low. 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 NY world sugar #11 (SBH19) on Friday closed up +0.18 (+1.40%) and March ICE London white sugar (SWH19) closed up +4.70 (+1.35%). Sugar prices moved higher Friday after crude oil prices rallied to a 1-1/2 month high. Stronger crude oil prices are positive for ethanol prices and provide incentive to Brazil's sugar mills to divert more cane crushing toward ethanol production rather than sugar production, thus reducing sugar supplies. Mar NY sugar climbed to a 2-1/4 month high Wednesday on signs that sugar exports from India, the world’s second-biggest sugar producer, may ease after India's Prime Minister's Office said it is considering raising the minimum selling price of sugar to 31 rupees/kg from 29 rupees/kg, which may curb India's sugar exports. Also, researcher Marex Spectron cut its India 2018/19 sugar export estimate to 2.8 MMT from a Nov estimate of 3.0 MMT. Sugar prices still have support from Tuesday's data from Unica showing that 2018/19 Brazil Center-South sugar production through December was down -26.5% y/y at 26.339 MMT. On the bearish side is Brazil shipping data showing that sugar awaiting loading in Brazil's ports rose to 586,400 MT as of Jan 16, up from last week's level of 382,113 MT. Also, Brazil's hydrous ethanol prices fell for a second week to 1.6354 real per liter in the week ended Jan 11, down -12% y/y and the lowest for this time of year in 3 years, which may prompt Brazil's sugar producers to divert more cane crushing toward sugar production with the lower ethanol prices.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, and (3) signs that sugar exports from India, the world’s second-biggest sugar producer, may ease after India's Prime Minister's Office said it is considering raising the minimum selling price of sugar to 31 rupees/kg from 29 rupees/kg, which may curb India's sugar exports. 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 +5.2% y/y to a record 35.87 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) the recent plunge in crude oil prices to a 17-month low, which is negative for ethanol prices and may prompt Brazil's sugar mills to divert less cane to making ethanol, thus increasing sugar supplies.
March arabica coffee (KCH19) on Friday closed up +2.55 (+2.49%) and March ICE robusta coffee (RMH19) closed up +9 (+0.59%). Coffee prices rallied to 1-week highs Friday on positive carry-over from Thursday's 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. Also, the Green Coffee Association reported Wednesday that U.S. Dec green coffee inventories fell -7.5% y/y to 6.13 mln bags. In addition, crop concerns remain after data from Somar Meteorolgia showed that rainfall in Minas Gerais measured 9.5 mm in the past week, only 13% of the historical average. Coffee prices posted 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 is limiting rallies as ICE-monitored coffee inventories Friday climbed to a 4-1/2 year high of 2.477 mln bags. Robusta coffee has support on signs of smaller robusta supplies after Vietnam Dec robusta coffee exports fell -6.1% y/y to 153,906 MT. 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.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 +27% y/y surge in Brazil Dec green coffee exports to 3.36 mln bags, the highest ever for a December, (2) ample supplies as ICO data showed global 2017/18 coffee exports rose +2% y/y to 121.9 mln bags and global 2018/19 coffee exports Oct-Nov are up +13% y/y to 20.6 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) overabundance of coffee supply as ICE-monitored coffee inventories climbed to a 4-1/2 year high of 2.477 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.