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COTTON
General Comments: Cotton closed higher and trends are up. USDA made a big cut in ending stocks projections in its WASDE updates yesterday. Production was cut back by a lot and export demand increased. Traders are optimistic about demand. There is a lot of confusion about the rollout of the Coronavirus vaccine and its effects on the economy. For now the vaccine is restricted to those most at risk and the general population might not get shot for quite a while. Meanwhile, the economy is starting to go down due to a lack of stimulus funding from the federal government. Harvest is ongoing amid drier weather conditions in West Texas and the Delta and Southeast. Reports indicate that some Cotton could have been damaged in Georgia and the Carolinas and into eastern Virginia due to the excessive winds and rains caused by the hurricanes. Export demand has held strong despite stay at home orders and weaker economies around the world. Traders now hope for even more demand later as the vaccines are given out and the world economies start to recover.
Overnight News: The Delta and Southeast will get mostly dry conditions except for some showers on Friday in the Delta. Temperatures should average near to below normal in the Delta and in the Southeast. Texas will have mostly dry conditions or isolated showers and above normal temperatures. The USDA average price is now 68.69 ct/lb. ICE said that certified stocks are now 86,544 bales, from 86,544 bales yesterday. ICE said that 0 notices were posted for delivery against December contracts and that total deliveries for the month are now 354 contracts.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7440, 7490, and 7740 March. Support is at 7250, 7200, and 7140 March, with resistance of 7450, 7430 and 7470 March.

U.S. Cotton Supply and Use 1/
================================================================================
2018/19 2019/20 Est. 2020/21 Proj. 2020/21 Proj.
Item Nov Dec
================================================================================
Million Acres
Planted 14.10 13.74 12.12 12.12
Harvested 9.99 11.61 9.01 9.01
Pounds
Yield per Harvested
Acre 882 823 911 850
Million 480 Pound Bales
Beginning Stocks 4.20 4.85 7.25 7.25
Production 18.37 19.91 17.09 15.95
Imports 0.00 0.00 0.00 0.00
Supply, Total 22.57 24.77 24.35 23.20
Domestic Use 2.98 2.15 2.50 2.50
Exports, Total 14.84 15.53 14.60 15.00
Use, Total 17.81 17.68 17.10 17.50
Unaccounted 2/ -0.09 -0.16 0.05 0.00
Ending Stocks 4.85 7.25 7.20 5.70
Avg. Farm Price 3/ 70.3 59.6 64.0 65.0
================================================================================
WASDE – 607 – 18 December 2020

World Cotton Supply and Use 1/
(Million 480-Pound Bales)
================================================================================
Supply Use
Region Beginning Produc- Loss Ending
Stocks tion Imports Domestic Exports 2/ Stocks
================================================================================
2020/21 Proj.
World
Nov 99.59 116.11 42.84 114.05 42.87 0.18 101.44
Dec 99.42 113.90 43.17 115.63 43.21 0.14 97.52
World Less China
Nov 62.69 88.61 33.34 76.55 42.75 0.18 65.16
Dec 62.52 86.40 33.17 77.63 43.08 0.14 61.25
United States
Nov 7.25 17.09 3/ 2.50 14.60 0.05 7.20
Dec 7.25 15.95 3/ 2.50 15.00 0.00 5.70
Total Foreign
Nov 92.34 99.02 42.83 111.55 28.27 0.13 94.24
Dec 92.17 97.95 43.16 113.13 28.21 0.13 91.82
Major Exporters 4/
Nov 40.74 57.83 1.71 31.88 24.42 0.02 43.96
Dec 40.72 57.26 1.71 32.88 24.36 0.02 42.44
Major Importers 8/
Nov 49.12 38.03 38.58 75.72 2.43 0.11 47.47
Dec 48.97 37.53 38.91 76.29 2.43 0.11 46.58
================================================================================
WASDE – 607 – 28 December 2020

FCOJ
General Comments: FCOJ was lower in response to the USDA reports that showed more production in Florida than expected by the trade. Production was estimated at 56 million boxes. The fundamentals remain mixed to negative. Florida has been spared any hurricanes or other serious storms this year. The Coronavirus is still promoting consumption of FCOJ at home. Restaurant and food service demand has been much less as no one is dining out. The weather in Florida is good with frequent showers to promote good tree health and fruit formation. Brazil has been too dry, but showers are falling in Brazil now and these need to continue to ensure good tree health. However, it could turn warm and dry again this week. Mexican crop conditions are called good with rains.
Overnight News: Florida should get isolated showers or dry conditions. Temperatures will average below normal. Brazil should get scattered showers and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 120.00, 118.00, and 113.00 January, with resistance at 124.00, 127.00, and 129.00 January.

DJ USDA Crop Production: U.S. Citrus Fruits – Dec 10
Citrus Fruits: Utilized Production by Crop, State, and
United States, Forecasted Dec 1, 2020
(The crop year begins with the bloom of the first year shown and ends
with the completion of harvest the following year.)
=========================================================================
Utilized Production Utilized production
Boxes 1/ Ton Equivalent
Crop and State ======================================================
2019-20 2020-21 2019-20 2020-21
=========================================================================
=== 1,000 Boxes === ==== 1,000 Tons ===
=========================================================================
Oranges
California, all 2/ 53,300 50,500 2,132 2,020
Early, mid, and Navel 3/ 44,300 42,000 1,772 1,680
Valencia 9,000 8,500 360 340
Florida, all 67,300 56,000 3,028 2,520
Early, mid, and Navel 3/ 29,650 22,000 1,334 990
Valencia 37,650 34,000 1,694 1,530
Texas, all 2/ 1,340 1,500 57 64
Early, mid, and Navel 3/ 1,150 1,300 49 55
Valencia 190 200 8 9
United States, all 121,940 108,000 5,217 4,604
Early, mid, and Navel 3/ 75,100 65,300 3,155 2,725
Valencia 46,840 42,700 2,062 1,879
========================================================================
(NA) Not available.
1/ Net pounds per box: oranges in California-80, Florida-90, Texas-85;
grapefruit in California-80, Florida-85, Texas-80; tangerines and
mandarins in California-80, Florida-95; lemons-80.
2/ Estimates for current year carried forward from an earlier forecast.
3/ Navel and miscellaneous varieties in California. Early (including Navel)
and midseason varieties in Florida and Texas.
4/ Estimates discontinued in 2020-2021.
5/ Includes tangelos and tangors.

COFFEE
General Comments: Futures were higher despite good world growing conditions and strong Brazil exports. It has been a weather market and the weather has improved in Brazil and in Vietnam. Central American weather is also improved as the dry season is getting started. Brazil is getting some rains now to improve flowering after an extended dry season. Vietnam is also drier after a series of tropical cyclones hit the country. The harvest is now about 25% complete. The demand from coffee shops and other food service operations is still at very low levels as consumers are still drinking Coffee at home. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. The Brazil harvest is over and producers are selling. Ideas are that production is very strong this year as it is the on year for the trees. Central America is offering at high differentials and with limited volumes. The weather is good in Colombia and Peru.
Overnight News: ICE certified stocks are lower today at 1.313 million bags. The ICO daily average price is now 113.02 ct/lb. Brazil will get scattered showers with near to above normal temperatures. Central America will get scattered showers after a hurricane earlier this week. Vietnam will see some big rains. ICE said that 0 contracts were tendered for delivery against December futures and that total deliveries for the month are now 1,589 contracts.
Chart Trends: Trends in New York are mixed. Support is at 116.00, 113.00, and 110.00 March, and resistance is at 125.00, 128.00 and 129.00 March. Trends in London are mixed. Support is at 1310, 1290, and 1280 January, and resistance is at 1340, 1370, and 1380 January.

SUGAR
General Comments: New York and London closed higher and trends are mostly up in both markets. Northern Brazil has been dry and production of cane in northern areas has been affected. It has been raining in south central Brazil, but these areas will turn warm and dry this week as the rains move farther to the north. The rains that have fallen have at least temporarily improved conditions. Brazil released its crush data yesterday. It showed that the first half November crush was down almost 20% from the previous period due to less cane availability. Sugar production was stronger than ethanol production due to price spreads. Brazil mills have been producing more Sugar and less Ethanol due to weak world and domestic petroleum prices. India has a very big crop of Sugarcane this year. The Indian government has not announced the subsidy for exporters of Sugar so no exports are coming out of India yet. Sources told wire services that any subsidy will need to be significant to get export sales on the books. Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season. It is dry again now. The EU is having problems with its Sugarbeets crop due to weather and disease. Coronavirus has returned to the world and has caused some demand concerns.
Overnight News: Brazil will get scattered showers. Temperatures should average above normal. ICE said that 326 delivery notices were posted for January Sugar 16 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 1510 and 1570 March. Support is at 1450, 1420, and 1400 March, and resistance is at 1510, 1530, and 1560 March. Trends in London are mixed to up with objectives of 414.00 and 439.00 March. Support is at 398.00, 394.00, and 391.00 March, and resistance is at 410.00, 414.00, and 419.00 March.

DJ Brazil Sugar Crush Down 19.7% in 2H Nov. as Cane Supplies Dwindled
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the second half of November compared with a year earlier after dry weather earlier in the season sped up processing and left less cane for crushing at the end of the season.
Center-south mills crushed 8.7 million metric tons of cane in the period, a decrease of 19.7% from the same period a year earlier, according to industry group Unica. They produced 427,000 tons of sugar, up 22.6%, and made 587 million liters of ethanol, a decline of 22.6%.
The dry weather in parts of the center south toward the start of the processing season helped accelerate cane harvesting and processing. With the season winding down, that has left less cane for the mills to crush and led to more mills closing earlier. By Dec. 1, 214 mills in the center-south had ended operations, up from 206 by the same date last year, with 61 mills closing in the second half of last month, Unica said.
Good prices for sugar on world markets has favored production of the sweetener over ethanol, while the closing of non-essential businesses because of the coronavirus hit demand for the alternative fuel, especially at the start of the pandemic.
The production mix for the second half of November was 35.55% sugar to 64.45% ethanol, compared with 23.85% sugar and 76.15% ethanol in the same period a year ago. Ethanol sales by center-south mills fell 3.2% from a year earlier, to 1.4 billion liters, according to Unica.
In the season from April 1 through Dec. 1, mills in the region crushed 594.9 million tons of cane, up 3.3% from the same period a year earlier. Sugar production rose 44.2% to a record 38.1 million tons, and ethanol output fell 9% to 28.9 billion liters.
The production mix for the season through Dec. 1 was 46.3% sugar to 53.7% ethanol, compared with 34.6% sugar and 65.4% ethanol in the same period a year ago.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com

DJ USDA Supply/Demand: U.S. Sugar – Dec 10
U.S. Sugar Supply and Use 1/
==============================================================================
Item 2019/2020 2020/2021
prev Dec 10 prev Dec 10
==============================================================================
1,000 short tons, raw value
Beginning stocks 1,783 1,783 1,623 1,618
Production 2/ 8,149 8,149 9,001 8,960
Beet sugar 4,351 4,351 4,899 4,859
Cane sugar 3,798 3,798 4,101 4,101
Florida 2,106 2,106 2,135 2,135
Hawaii 0 0 0 0
Lousiana 1,566 1,566 1,824 1,824
Texas 126 126 142 142
Imports 4,154 4,154 3,025 3,428
TRQ 3/ 2,071 2,071 1,711 1,808
Other program 4/ 432 432 350 350
Other 5/ 1,651 1,651 963 1,270
Mexico 1,376 1,376 888 1,160
Total supply 14,085 14,085 13,649 14,006
Exports 61 61 35 35
Deliveries 12,333 12,333 12,305 12,305
Food 12,235 12,235 12,200 12,200
Other 6/ 98 98 105 105
Miscellaneous 68 74 0 0
Total use 12,462 12,468 12,340 12,340
Ending stocks 1,623 1,618 1,309 1,666
Stocks to use ratio 13.0 13.0 10.6 13.5
==============================================================================
1/ Fiscal years beginning Oct 1. Data and projections correspond to category
components from “Sweetener Market Data” (SMD). 2/Production projections
for 2019/20 and 2020/21 are based on Crop Production and/or processor
projections/industry data and/or sugar ICEC analysis where appropriate.
3/ For 2019/20 WTO raw sugar TRQ shortfall (84) and for 2020/21 (99). 4/
Composed of sugar under the re-export and polyhydric alcohol programs. 5/
Imports from Mexico; and high-tier tariff sugar and syrups not otherwise
specified — for 2019/20 (275) and 2020/21 (110). 6/ Transfers
accompanying deliveries for sugar-containing products to be exported (SCP)
and polyhydric alcohol manufacture (POLY) and deliveries for livestock
feed and ethanol. Total refiner license transfers for SCP and POLY
inclusive of WASDE-reported deliveries: 2018/19 — 374; estimated 2019/20
— 340; projected 2020/21 — 353.
Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/
================================================================================
Supply Use
Fiscal Beginning Produc- Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
================================================================================

1000 Metric Tons, Actual Weight
Sugar
2019/20 Est.
Nov 1169 5278 77 4455 1212 858
Dec 1169 5278 77 4455 1212 858
2020/21 Proj.
Nov 858 5950 86 4488 1471 935
Dec 858 5950 105 4488 1490 935
================================================================================
WASDE – 607 – 17 December 2020

COCOA
General Comments New York and London closed mixed to higher once again as the down trend continues but might be running out of steam. Speculators were on both sides of the market and industry bought a little bit. Industry has not been an active buyer in the last week. Importers are still looking to find a way to source Cocoa without paying a premium demanded by Ivory Coast and Ghana. Both countries have instituted a living wage for producers there and are looking to tax exports to pay the increased wages. Buyers have been accused of using certified stocks from the exchange instead of buying from origin. However, it looks like the exchange buying has come to a halt for now. There are a lot of demand worries as the Coronavirus is making a comeback in the US. Europe is also seeing a return of the pandemic. The North American and European cocoa grinds were at least 4% lower than a year ago and the Asian cocoa grind was down 10% from last year.
Overnight News: Sporadic and light 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 2.985 million bags. ICE said that 1 contract was tendered against December Cocoa and that total deliveries for the month are now 1,250 contracts.
Chart Trends: Trends in New York are down with no objectives. Support is at 2450, 2440, and 2330 March, with resistance at 2630, 2650, and 2670 March. Trends in London are down with objectives of 1690 March. Support is at 1700, 1690, and 1630 March, with resistance at 1760, 1790, and 1800 March.

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

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