MORNING SOFTS COMMENTS

MORNING SOFTS COMMENTS

Jack Scoville

Thursday, June 04, 2020

Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

JSL, SA de CV

San Salvador, El Salvador (503) 2260-7806 jslsadecv@comcast.net

JSL, SA

jslsa@comcast.net

DJ U.S. April Coffee, Cocoa Imports-Jun 4

   In kilograms from the U.S. Commerce Department, converted to pounds

by Dow Jones.

                           —-Apr 2020—-                —-Mar 2020—-

  -coffee-                   kilograms          pounds       kilograms          pounds

coffee, unroasted          124,100,218     273,640,981     121,490,863     267,887,353

coffee, roasted              7,165,567      15,800,075       8,018,410      17,680,594

coffee, soluble

   instant                   4,605,552      10,155,242       5,354,592      11,806,875  

  -Cocoa-

cocoa beans                 39,807,122      87,774,704      57,260,960     126,260,417

sweetened bars/block

  10 lbs or over             2,501,668       5,516,178       2,669,352       5,885,921

for retail candy                     0               0               0               0

cocoa butter                10,468,851      23,083,816      13,158,783      29,015,117

cocoa paste,

  not defatted               8,202,894      18,087,381       6,033,968      13,304,899

cocoa paste

   defatted                  4,809,766      10,605,534       6,759,273      14,904,197

cocoa powder,

   unsweetened               9,611,826      21,194,076       8,590,548      18,942,158

cocoa powder,

    sweetened                   19,944          43,977          81,275         179,211

confectioners

   coating                   4,142,760       9,134,786       5,209,224      11,486,339

candy containing

 chocolate                   9,572,710      21,107,826       9,548,488      21,054,416

DJ Food Prices Fell for Fourth Consecutive Month in May But Rate of Decline Slowed

  By Will Horner  

  Global food prices continued their decline in May as the Covid-19 pandemic hit demand while supplies remained strong, the United Nations’ Food and Agriculture Organization said Thursday.

  The UN FAO’s Food Price Index dropped to 162.5 points in May, a 1.9% fall from the previous month.

  That marked the fourth consecutive monthly decline for the index which tracks the prices of common food commodities. However, the rate of decline slowed in May from April, suggesting the impact of the virus was waning.

  The index fell as meat, dairy, cereals and vegetable oil prices ticked lower. The only food-stuff to rise, according to the index, was sugar with the FAO’s Sugar Price Index rebounding 7.4% after hitting a 13-year low in April.

COTTON            

General Comments   Cotton was a little higher after July traded lower in the first part of the day.  It was partly a weather market as growing conditions are still difficult in the Texas Panhandle.  Support is coming from hopes for improved demand for US Cotton.  There is concern that China will stop fulfilling its obligations in the Phase One trade deal due to ramped up US rhetoric on the Chinese response to the Coronavirus epidemic and now the unrest in Hong Kong.  The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks.  The retail demand has been slow to develop as many consumers got hurt economically due to stay at home orders during the height of the pandemic and have little disposable funds to spend on clothes.  Demand will slowly improve but the industry should have plenty of supplies to work with in the short term.

Overnight News:  The Delta will get mostly dry conditions and Southeast will get mostly dry conditions.  Temperatures should be mostly above normal.  Texas will have dry conditions or isolated showers.  Temperatures will average near normal.  The USDA average price is now 55.98 ct/lb.  ICE said that certified stocks are now 11,279 bales, from 10,123 bales yesterday.  USDA said that net Upland Cotton weekly export sales were -10.1—balres this year and 12.400 bales next year.  Net Pima sales were 500 bales this year and 0 bales next year. 

Chart Trends:  Trends in Cotton are up with objectives of 6670 July.  Support is at 5980, 5940, and 5730 July, with resistance of 6120, 6220 and 6150 July.

DJ U.S. April Cotton Exports-Jun 4

    In kilograms and in running 480-pound bales. Source. U.S. Department

Commerce.

(*)NOTE: Year ago figures reflect data reported at that time.

Data includes Exports and Re-Exports.

                                      ——- In Kilograms ——-

                                Apr 20      Mar 20      Feb 20     Apr 19(*)

Upland, under 1 inch        15,456,112  25,245,674  19,598,835    23,711,754

  1 to 1 1/8 inch           86,853,480 141,742,437 155,619,386   103,818,495

  upland 1 1/8 and over    164,683,845 255,948,162 240,927,354   248,146,768

Amer pima, over 1 1/8 inc    6,164,247  13,279,934  12,520,410     7,205,404

All cotton                 273,157,684 436,216,207 528,665,985   382,882,421  

                              ——- In Running 480-Pound Bales ——-

                                Apr 20      Mar 20      Feb 20     Apr 19(*)

Upland, under 1 inch            70,989     115,952      90,017       108,907

  1 to 1 1/8 inch              398,915     651,018     714,754       476,834

  upland 1 1/8 and over        756,387   1,175,560   1,106,570     1,139,729

Amer pima, over 1 1/8 inc       28,312      60,994      57,506        33,094

All cotton                   1,254,603   2,003,525   1,968,847     1,758,565

FCOJ

General Comments:  FCOJ was higher.  Trends are still mostly up in the market.  Support is coming from the continued effects from the Coronavirus that are keeping people at home and drinking Orange Juice.  Demand from grocery stores has remained strong in response to the increased consumer demand.  Oranges production was estimated as less in the latest USDA reports at below 70 million boxes, but FCOJ inventories are holding.  There is increasing concern about the food service demand not improving even with the partial opening of the states.  The weather in Florida is currently good for the crops.  Southern areas are cool and have seen a few showers.  The Valencia harvest is in full swing.  More signs of growth on trees are reported.  Brazil has been dry and irrigation has been used. 

Overnight News:  Florida should get periods of showers.  Temperatures will average near normal.   Brazil should get dry conditions and near to below normal temperatures.    

Chart Trends:  Trends in FCOJ are mixed.  Support is at 125.00, 123.00, and 121.00 July, with resistance at 130.00, 133.00, and 136.00 July.

COFFEE 

General Comments:  Futures were higher in New York and in London.  New York rallied on reports of big rains in parts of Central America and despite weakness in the Brazilian Real.  El Salvador, Guatemala, southeast Mexico and western Honduras were hit hard with a lot of rain over the weekend.  Processing has taken a hit in these areas.  The demand from coffee shops and other food service operations has dropped to almost nothing.  Consumers are still drinking Coffee at home, but many smaller roasters are actively trying to unload green coffee already bought a there are only a few outlets for sales at this time.  This should change in the next few weeks as the US and EU economies slowly open up.  The logistics of moving Coffee from Central and South America remain difficult.  Producers have had trouble getting workers to pick the cherries and mills and processors have had trouble getting workers to staff the plants.  Shipping logistics have improved somewhat, but many are still having trouble getting the Coffee to ports to move to consumer nations.  Vietnamese producers are not selling due to the weaker prices paid currently and the effects of the Coronavirus.  Indonesian producers are more active sellers.

Overnight News:  ICE certified stocks are lower today at 1.745 million bags.  The ICO daily average price is now 100.46 ct/lb.  Brazil will get a dry week or maybe some isolated showers with near to above normal temperatures.  Vietnam will see light to moderate showers.   

Chart Trends:  Trends in New York are down with objectives of 96.00 July.  Support is at 95.00, 92.00, and 89.00 July, and resistance is at 102.00, 105.00 and 107.00 July.  Trends in London are mixed.   Support is at 1180, 1150, and 1120 July, and resistance is at 1210, 1230, and 1240 July.

SUGAR               

General Comments:  New York and London closed higher despite a weakening Real and due in part to stronger petroleum prices.  Prices in petroleum futures remained generally firm in the last week but still have a long way to go before Ethanol processing becomes profitable again.  Trends are now up in [petroleum markets as the world slowly opens up after the Coronavirus pandemic.  The Brazil mills are trying to cover the lack of White Sugar in the market but might switch back to producing ethanol soon if prices continue to improve for the ethanol.  Reports indicate that little is on offer from India in part due to logistical and harvest problems caused by the Coronavirus.  India is thought to have a very big crop of Sugarcane this year but getting it into Sugar and into export position has become extremely difficult.  Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season.  There are reduced flows from rivers from China as well. 

Overnight News:  Brazil will get a dry week or maybe isolated showers.  Temperatures should average near to above normal.

Chart Trends: Trends in New York are up with objectives of 1310 and 1420 October.  Support is at 1130, 1120, and 1100 October, and resistance is at 1180, 1220, and 1260 October.  Trends in London are mixed.  Support is at 363.00, 360.00, and 352.00 August, and resistance is at 379.00, 387.00, and 396.00 August.

COCOA              

General Comments:  New York closed a little lower and London closed a little higher.  The price action was static for much of the session with little trade interest.  The virus has complicated farming and marketing efforts.  Ideas are that deliveries can be slower on any contracted Cocoa and that the next crop could suffer as workers stay away.  The Coronavirus helps keep demand away and helps keep workers from grinding facilities and chocolate manufacturers.  The removal of the lockdowns should improve demand in the short term.  Harvest is now over for the main crop in West Africa and the results so far are very good.  The reports from West Africa imply that a big harvest in the region.  Ideas are that Southeast Asia also has good crops.

Overnight News:  Isolated to scattered showers are forecast for West Africa.  Temperatures will be near normal.  Malaysia and Indonesia should see showers.  Temperatures should average above normal.  Brazil will get mostly dry conditions and near to above normal temperatures.  ICE certified stocks are lower today at 4.242 million bags. 

Overnight News:

Chart Trends:  Trends in New York are mixed.  Support is at 2320, 2310, and 2280 July, with resistance at 2450, 2460, and 2490 July.  Trends in London are mixed to down with objectives of 1870 and 1820 July.  Support is at 1890, 1870, and 1830 July, with resistance at 1940, 1970, and 1990 July.

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