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COTTON       

General Comments:  Futures were lower yesterday on demand worries.  The weekly export sales report showed less demand yesterday.  Futures appear to be taking a break from the relentless up move seen over the last few months.  Chart trends are down on the daily charts.  The demand for US Cotton has been strong even with the Coronavirus.  The US Dollar has started to firm recently and could be hurting demand.  The US stock market has been generally firm to help support ideas of a better economy here and potentially increased demand for Cotton products.

Overnight News:  The Delta will get mostly dry conditions and near to below normal temperatures and Southeast will get isolated showers and below normal temperatures.  Texas will have mostly dry conditions and near to below temperatures.  The USDA average price is now 81.25 ct/lb.  ICE said that certified stocks are now 99,706 bales, from 99,789 bales yesterday.  ICE said that 0 notices were posted for delivery against March contracts and that total deliveries for the month are now 91 contracts.

Chart Trends:  Trends in Cotton are down with objectives of 8510 May.  Support is at 8580, 8400, and 8280 May, with resistance of 8920, 9010 and 9140 May.

DJ On-Call Cotton – Mar 4 

As of Feb 26. On-call positions represent spot cotton sold to or

purchased from a merchant, based on New York cotton futures contracts

of 500-pound bales. Prices are not yet fixed against these contracts.

Source: CFTC

*-denotes changes from the previous week are based on revised data from

last week.

Call  Previous   Change       Call  Previous  Change

Sales                     Purchases

Mar 21          132       649     -517          1        10      -9

May 21       27,063    32,523   -5,460      6,392     7,047    -655

Jul 21       34,133    36,217   -2,084      5,526     5,815    -289

Oct 21            0         0        0          0         0       0

Dec 21       21,630    19,692    1,938     22,061    19,470   2,591

Mar 22        6,303     6,383      -80      1,743     1,670      73

May 22        2,740     2,643       97        647       654      -7

Jul 22        7,024     6,835      189      1,611     1,611       0

Dec 22        2,219     1,519      700      5,657     4,925     732

Mar 23          176       176        0          0         0       0

May 23           18        18        0          0         0       0

Jul 23           18        18        0        220       220       0

Dec 23            0         0        0        227       227       0

May 24            0         0        0          0       441    -441

Jul 24            0         0        0        441         0     441

Total       101,456   106,673   -5,217     44,526    42,090   2,436

Open      Open   Change

Int       Int

Mar 21           15       190     -175

May 21      114,531   121,377   -6,846

Jul 21       57,111    57,303     -192

Oct 21           18        19       -1

Dec 21       55,931    53,639    2,292

Mar 22        6,502     6,504       -2

May 22        1,149     1,102       47

Jul 22        2,977     2,614      363

Dec 22        4,128     2,840    1,288

Mar 23            0         0        0

May 23            0         0        0

Jul 23            1         1        0

Dec 23            0         0        0

May 24            0         0        0

Jul 24            0         0        0

Total       242,363   245,589   -3,226

DJ U.S. January Cotton Exports-Mar 5 

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 ——-

Jan 21      Dec 20      Nov 20        Jan 20

Upland, under 1 inch        11,141,483  14,214,104  11,512,660    13,031,129

1 to 1 1/8 inch          152,725,602 128,004,424  89,908,226   160,698,460

upland 1 1/8 and over    178,550,486 160,856,513 171,784,969   190,159,094

Amer pima, over 1 1/8 inc    9,032,022   7,187,287  16,534,860     6,034,700

All cotton                 351,449,593 310,262,328 289,740,715   369,923,383

——- In Running 480-Pound Bales ——-

Jan 21      Dec 20      Nov 20        Jan 20

Upland, under 1 inch            51,172      65,285      52,877        59,851

1 to 1 1/8 inch              701,463     587,920     412,945       738,082

upland 1 1/8 and over        820,076     738,808     789,002       873,394

Amer pima, over 1 1/8 inc       41,484      33,011      75,944        27,717

All cotton                   1,614,195   1,425,023   1,330,768     1,699,044

FCOJ 

General Comments:  FCOJ closed mostly a little lower in range trading.  The tone of the market is weak.  Some damage to leaves and open flowers was possible in Texas and northern Mexico in the wake of the recent hard freeze, but ideas are that the overall damage was minor.  Moderate temperatures are expected for Florida this and next week.  The weather in Florida is good with a few showers to promote good tree health and fruit formation.  Showers are falling in Brazil now and crop conditions are called good even with drier than normal soils.  Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production.  It is dry in northern and western Mexican growing areas.

Overnight News:  Florida should get scattered showers tomorrow, otherwise dry conditions.  Temperatures will average near to below normal.   Brazil should get isolated showers and near to above normal temperatures.  ICE said that 0 notices were posted today for March delivery and that total deliveries for the month are now 0 contracts.

Chart Trends:  Trends in FCOJ are mixed.  Support is at 109.00, 106.00, and 103.00 May, with resistance at 112.00, 116.00, and 117.00 May.

COFFEE   

General Comments:  Futures were lower once again in both markets on better growing conditions in Brazil and a weaker Real.  Cash market buyers are not buying that much Coffee these days. Vietnam producers have not sold since the Tet holiday.  There are reports of good weather in Vietnam for the harvest.  Indonesia has had good weather but has little coffee to sell now.  Brazil has been dry for flowering and initial fruit development.  Rains are now falling that should be very beneficial.  Central America is also drier for harvesting but production might have been reduced due to very wet conditions during the growing season.  Good growing conditions are reported in Colombia and Peru.

Overnight News:  ICE certified stocks are higher today at 1.797 million bags.  The ICO daily average price is now 121.96 ct/lb.  Brazil will get scattered showers with near normal temperatures.  Central America will get scattered showers or dry conditions.  Vietnam will see mostly dry conditions.  ICE said that 6 notices were posted for delivery against March contracts and that total deliveries for the month are now 392 contracts.

Chart Trends:  Trends in New York are down with objectives of 131.00 and 126.00 May.  Support is at 131.00, 129.00, and 124.00 May, and resistance is at 137.00, 140.00 and 143.00 May.  Trends in London are mixed to down with objectives of 1320 and 1380 May.   Support is at 1390, 1360, and 1340 May, and resistance is at 1460, 1490, and 1520 May.

DJ Brazilian Specialty Coffee Assoc. Sees 30% Decline in 2021 Coffee Harvest 

By Jeffrey T. Lewis

SÃO PAULO–Brazil’s coffee crop will be about 30% smaller in 2021 than in 2020 because of bad weather last year that hurt the development of the plants, according to Guilherme Salgado Rezende, president of the Brazil Specialty Coffee Association.

Scant rain and higher-than-normal temperatures in coffee-growing regions during months vital to plant growth reduced productivity, and many coffee growers’ subsequent decision to prune their plants more than normal because of the poor conditions means the 2022 coffee crop will also be smaller than 2020’s record crop, Mr. Rezende said.

“It’s too late for us to have the same production in 2022 as in 2020, the plants just won’t recover enough,” said Mr. Rezende, who is also an agronomist specializing in coffee.

Brazil is the world’s biggest grower of coffee, accounting for about one-third of total global production. The country has a two-year coffee-growth cycle, producing bigger crops in even-numbered years and then smaller crops in odd-numbered years as the plants “rest.”

Brazil’s total coffee crop fell 20% in 2019 from 2018 to 49.3 million 132-pound bags, then rose to 63.1 million bags in 2020. Brazilian crop agency Conab in January forecast a 2021 coffee crop in a range of 43.9 million 132-pound bags to 49.6 million bags in its first report on the 2021 production season, which would mean a decline of 21.4% to 30.5% from 2020.

Coffee plants also have a two-year cycle for their development, with the branches that grow one year bearing the fruit that produces coffee beans in following years, so the bad weather in 2020 will also hit the 2022 crop.

The 2022 harvest could be helped by sufficient rains in the southern hemisphere winter months, but even then production won’t equal the 2020 crop and the quality of the 2021 crop would suffer, according to Mr. Rezende.

SUGAR                 

General Comments:  New York and London closed higher.  The chart trends remain down in New York and sideways in London.  The market appears to be searching for a new source of demand to complement the traditional buying.  Rains were reported again in Brazil.  It has been raining in south central Brazil and the production of cane is looking solid for the next harvest.  Production has been hurt due to dry weather earlier in the year.  India is producing less Sugar and more Ethanol.  Growing conditions are called good.  Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season.  The EU Sugar crop is less this year as is the crop in Russia.

Overnight News:  Brazil will get scattered showers.  Temperatures should average near normal.

Chart Trends: Trends in New York are down with objectives of 1590 and 1510 May.  Support is at 1600, 1580, and 1560 May, and resistance is at 1670, 1700, and 1720 May.  Trends in London are mixed.  Support is at 455.00, 451.00, and 446.00 May, and resistance is at 467.00, 477.00, and 485.00 May.

COCOA                

General Comments:  New York and London closed lower as nearest resistance held on the daily charts.  Demand should improve as the vaccinations get administered.  The ICCO said that the Cocoa surplus would be about 100,000 tons this year.  Ivory Coast estimates its main crop production at 1.65 million tons.  There were reports of demand for Cocoa in Ivory Coast, although the reports noted that there is a lot to sell there.  The grind data has been weaker again implying less demand for chocolate.  There are ideas of big supplies at origin.

Overnight News:  Mostly dry conditions are forecast for West Africa.  Temperatures will be near to above 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 higher today at 3.783 million bags.  ICE said that 0 contracts were delivered against March futures and that total deliveries for the month are now 1,142 contracts.

Chart Trends:  Trends in New York are mixed.  Support is at 2590, 2570, and 2540 May, with resistance at 2670, 2710, and 2760 May.  Trends in London are up with no objectives.  Support is at 1800, 1780, and 1770 May, with resistance at 1850, 1860, and 1880 May.

Questions? Ask Jack Scoville today at 312-264-4322
 
 
 
 

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