MORNING SOFTS COMMENTS

Jack Scoville

Thursday, October 14, 2021

Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

JSL, SA de CV

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

JSL, SA

jslsa@comcast.net

COTTON

General Comments: Futures were lower on what was called long liquidation from speculators. The USDA reports showed better production than anticipated but very good demand for US Cotton. Demand data was unchanged in the USDA reports Tuesday. Demand or US Cotton remains very strong and that is good news for sellers as the strong demand implies strong prices should continue. The demand is expected to be strong from Asian countries as world economies recover from Covid lockdowns. Analysts say the demand is still very strong and likely to hold at high levels for the future. Good US production is expected, but there are some questions about the overall production in Texas. There are ideas of less production from India due to recent adverse weather in Cotton areas there. Chinese Cotton areas have had too much rain as well, and Chinese demand is also strong as clothes makers use foreign Cotton to get away from domestic supplies that might have been produced by forced labor and might not be allowed in the US or other western countries

Overnight News: The Delta will get mostly dry conditions or isolated showers and much above normal temperatures but below normal temperatures this weekend. The Southeast should see mostly dry conditions and above normal temperatures but below normal starting Sunday. Texas will have mostly dry conditions or isolated showers and near to below normal temperatures. The USDA average price is now 103.17 ct/lb. ICE said that certified stocks are now 33,162 bales, from 33,162 bales yesterday. ICE said that 0 notices were posted for delivery against October contracts and that total deliveries for the month are now 115 contracts.

Chart Trends: Trends in Cotton are down with no objectives. Support is at 10200, 9960, and 9760 December, with resistance of 10860, 11030 and 11290 December.

FCOJ

General Comments: FCOJ closed lower on what appeared to be speculative selling that hit most commodities yesterday. The gains were moderate but were enough to push the short term trends back to sideways. The weather remains generally good for production around the world. Brazil has some rain is in the forecast and flowering will be possible in the next couple of weeks. Weather conditions in Florida are rated mostly good for the crops with scattered showers and near normal temperatures. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. Northeastern Mexico areas were too dry but have gotten good rains in recent weeks, and the rest of northern and western Mexico is rated in good condition. Florida is in the latter stages of the hurricane season but the storms have missed the state so far and crop conditions are good.

Overnight News: Florida should get dry conditions or isolated showers. Temperatures will average near to above normal. Brazil should get scattered to isolated showers and above normal temperatures.

Chart Trends: Trends in FCOJ are mixed to down with no objectives. Support is at 122.00, 119.00, and 116.00 November, with resistance at 129.00, 132.00, and 134.00 November.

COFFEE

General Comments: New York closed sharply higher and London closed lower but trends are still up in New York and mixed in London. The lack of Coffee and freight to move the Coffee that is available is still supporting futures. New York has found support from the lack of Coffee available in Brazil after extreme weather events. It has been dry in Brazil and there has been a big freeze there. New York and London are both having trouble sourcing Coffee from any country due to a shortage of containers to carry the Coffee out of the origin country. Scattered showers are still in the forecast for Brazil and some flowering could occur. Scattered showers are now in the forecast for Southeast Asia and big rains are possible in Vietnam from a tropical system. Good conditions are reported in northern South America with above average rains and good conditions reported in Central America with near average rains. Conditions are reported to be generally good in parts of Africa.

Overnight News: ICE certified stocks are lower today at 1.912 million bags. The ICO daily average price is now 184.51 ct/lb. Brazil will get scattered showers with near to below normal temperatures today, then near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.

Chart Trends: Trends in New York are up with objectives of 221.00 and 238.00 December. Support is at 205.00, 200.00, and 195.00 December, and resistance is at 215.00, 218.00 and 224.00 December. Trends in London are mixed. Support is at 2100, 2060, and 2020 November, and resistance is at 2150, 2180, and 2210 November[JS1] .

DJ Brazil Coffee Exports Fell 26.5% in September to 3.1 Million Bags, Cecafe Says

By Jeffrey T. Lewis

SÃO PAULO--Brazilian coffee exports fell in September amid a continuing shortage of shipping containers and other logistics problems, according to exporters group Cecafe.

The South American country exported 3.1 million 132-pound bags of coffee last month, a decline of 26.5% from the same month a year earlier, Cecafe said Wednesday. Sales abroad of the arabica variety of coffee dropped 24.9% to 2.4 million bags, while exports of robusta beans plunged 51.8% to 326,045 bags.

Exports of ground, roast and soluble coffee rose 10.1% to 363,591 bags, Cecafe said.

Shipping and supply problems have plagued industries around the world for months amid disruptions arising from the coronavirus pandemic.

"There are no changes in the scenario," Cecafe President Nicolas Rueda said.

"We continue with an intense struggle for containers and space on ships, and we're still facing successive booking cancellations, cargo rollovers and extremely costly shipping," he said.

SUGAR

General Comments: New York and London were lower yesterday on what appeared to be speculative selling that hit most commodities yesterday. Trends are mixed on the daily and weekly charts in New York but are still trying to turn up in London. Ideas are that the supplies available to the cash market are rather slim and that demand is increasing for both White and Raw Sugar. The reduced production potential from Brazil is still impacting the market. India is not offering as world prices are well below domestic prices and has had some weather problems of its own. Consumption of Sugar is said to be improving from previous low levels. Thailand is expecting improved production. It is raining in southern Brazil which will be good for the next crops there but the tight situation now must still be dealt with.

Overnight News: Brazil will get scattered showers. Temperatures should average below normal today, then above normal.

Chart Trends: Trends in New York are mixed. Support is at 1960, 1950, and 1920 March, and resistance is at 2040, 2090, and 2150 March. Trends in London are mixed to up with objectives of 537.00 and 560.00 December. Support is at 508.00, 500.00, and 496.00 December, and resistance is at 520.00, 527.00, and 532.00 December.

DJ Brazil Sugar Crush Down 11.4% in 2H September, Unica Says

By Jeffrey T. Lewis

SAO PAULO--Brazilian sugar mills in the country's center-south region crushed less cane in the second half of September compared with a year earlier, according to industry group Unica.

Center-south mills crushed 35.8 million metric tons of cane in the period, a decline of 11.4% from the same period a year earlier. Sugar output fell 19.1% to 2.3 million tons and total ethanol production declined 8.7% to 2 billion liters.

The production mix for the second half of September was 43.7% sugar to 56.3% ethanol, compared with 46.2% sugar and 53.8% ethanol in the same period a year earlier.

In the season starting on April 1, 2021, through Sept. 30, mills crushed 467.4 million tons of cane, a decline of 6.9%. Sugar production fell 9% to 29.2 million tons and ethanol output declined 3.3% to 22.8 billion liters.

The production mix for the season through Sept. 30 was 45.9% sugar to 54.1% ethanol compared with 46.9% sugar and 53.1% ethanol in the same period a year earlier.

COCOA

General Comments: New York and London closed a little lower on what appeared to be some chart based speculative selling. Ideas of short West African production for the coming year are still providing the best support. There are increasing concerns that Ghana will have less production this year and it has been raining in Ivory Coast to promote the return of disease to the pods. Ghana is the worlds second largest producer behind Ivory Coast so reduced production in both countries could mean short supplies for the world market this year. World economies are starting to reopen after Covid and the open economies are giving demand the boost. Cocoa production in Ivory Coast is expected to drop by up to 11% in the 2021/2022 season that starts on Oct. 1 from the previous year.

Overnight News: Isolated to scattered showers are forecast for West Africa. Temperatures will be 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 lower today at 5.425 million bags.

Chart Trends: Trends in New York are down with objectives of 2620, 2510, and 2470 December. Support is at 2600, 2560, and 2520 December, with resistance at 2680, 2730, and 2770 December. Trends in London are down with objectives of 1810 and 1770 December. Support is at 1810, 1800, and 1780 December, with resistance at 1850, 1890, and 1920 December.

DJ Nigeria's 2021-22 Cocoa Production Seen at 275,000 Tons

By Obafemi Oredein

Special to Dow Jones Newswires

IBADAN, Nigeria--Cocoa production in Nigeria for the 2021-22 season is expected at 275,000 metric tons, the country's national cocoa body said Thursday.

"Nigeria expects 275,000 tons of cocoa for the new season, we will see a good harvest of (main crop) cocoa as from November," said Muftau Abolarinwa, president of the Cocoa Association of Nigeria.

The figure constitutes both the midcrop and main crop output for the season that begins this month and will end in January or February. It will be higher than the 250,000 tons usually estimated for the country per season by trade groups.

Figures for the 2020-21 season haven't yet been released.

Production has been low so far in the 2021-22 season due to inopportune weather conditions, Mr. Abolarinwa said, adding however that harvests should pick up from November through to January.

Weather conditions are already improving and boosting the production prospects in the southweat and southeast regions, although harvests may be somewhat delayed, said Jibola Adetoun, a trader in Ibadan, capital of Oyo state.