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Softs Report 04/17/19


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DJ U.S. February Coffee, Cocoa Imports-Apr 17
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones.
—-Feb 2019—- —-Jan 2019—-
-coffee kilograms pounds kilograms pounds
coffee, unroasted 116,810,017 257,566,087 127,532,840 281,209,912
coffee, roasted 6,738,401 14,858,174 8,171,936 18,019,119
coffee, soluble
instant 3,736,164 8,238,242 5,032,774 11,097,267
-Cocoa-
cocoa beans 62,594,442 138,020,745 47,673,087 105,119,157
sweetened bars/block
10 lbs or over 2,640,241 5,821,731 1,590,633 3,507,346
for retail candy 0 0 0 0
cocoa butter 7,923,080 17,470,391 7,892,814 17,403,655
cocoa paste,
not defatted 2,628,753 5,796,400 2,953,225 6,511,861
cocoa paste
defatted 4,849,512 10,693,174 5,313,151 11,715,498
cocoa powder,
unsweetened 8,090,618 17,839,813 8,800,933 19,406,057
cocoa powder,
sweetened 141,291 311,547 121,757 268,474
confectioners
coating 3,288,298 7,250,697 3,408,099 7,514,858
candy containing
chocolate 10,522,202 23,201,455 9,286,452 20,476,627
Write to Rodney Christian at csstat@dowjones.com

COTTON
General Comments: Cotton was higher and got back almost all of the losses seen on Monday. It was an impressive recovery as there did not seem to be much news. USDA showed that planting progress was good and in line with the five-year average in data released after the close. Most of the progress this week will be in Texas after some big rains were reported over the weekend in the Delta. The Southeast also got some big rains. US sales have suffered so far this year in world markets, but have started to improve as other sellers run out of supplies. There are expectations that Cotton planted area can increase this season as farmers could be attracted to Cotton instead of grains such as Corn or Rice due to relative pricing. Anecdotal reports imply that industry is preparing for more production as new facilities such as gins are being opened. Cotton production is poised to make a comeback in the Delta and Southeast.
Overnight News: The Delta and Southeast should get showers on today through Friday. Temperatures should be mostly near to above normal this week. Texas will have dry weather after some rains today. Temperatures will average near to above normal. The USDA average price is now 73.10 ct/lb. ICE said that certified stocks are now 55,517 bales, from 54,897 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 7650, 7570, and 7550 May, with resistance of 7860, 7930, and 7980 May.

DJ U.S. February Cotton Exports-Apr 17
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 ——-
Feb 19 Jan 19 Dec 18 Feb 18(*)
Upland, under 1 inch 18,247,137 14,511,360 12,588,320 19,017,467
1 to 1 1/8 inch 94,958,960 102,469,785 75,198,002 137,705,129
upland 1 1/8 and over 199,117,394 140,268,013 114,741,456 255,300,485
Amer Pima, over 1 1/8 inc 10,838,794 9,402,435 9,948,468 19,194,488
All cotton 323,162,285 266,651,593 212,476,246 431,217,569
——- In Running 480-Pound Bales ——-
Feb 19 Jan 19 Dec 18 Feb 18(*)
Upland, under 1 inch 83,808 66,650 57,818 87,347
1 to 1 1/8 inch 436,143 470,640 345,382 632,474
upland 1 1/8 and over 914,539 644,246 527,003 1,172,586
Amer Pima, over 1 1/8 inc 49,782 43,185 45,693 88,160
All cotton 1,484,272 1,224,721 975,895 1,980,566

FCOJ
General Comments: FCOJ was lower, but held to the recent trading range. There was no real news to push the market, and prices overall remain low on the outlook for big crops in the coming year along with ample supplies this year. Trends are down as the market looks at a big oranges crop and little demand for FCOJ. Inventories inside the state of Florida are significantly higher than a year ago. The Oranges harvest remains active in Florida as the new crop begins to develop. The Early and Mid harvest is over and producers are concentrating on harvesting Valencia. The harvest is estimated at 76.5 million boxes. Fruit is developing and ideas are that the next crop is off to a very good start. Irrigation is being used frequently to help protect crop condition. Mostly good conditions are reported in Brazil.
Overnight News: Florida should get mostly dry weather today and tomorrow, than rain Friday and then a dry weekend. Temperatures will average near to above normal. Brazil should get mostly dry conditions on Friday and below normal temperatures.
Chart Trends: Trends in FCOJ are down with no objectives. Support is at 106.00, 103.00, and 100.00 May, with resistance at 115.00, 116.00, and 120.00 May.

COFFEE
General Comments: Futures were a little lower on the stronger US Dollar and weaker Brazilian Real. Price trends are still weak and there is room on the charts for prices to move lower as May prepares to go into delivery. The trade is still worried about big supplies, especially from Brazil and low demand. Brazil is dominating the market right now, and other exporters are having a lot of trouble finding buyers. Prices are generally below to well below the cost of production for world producers, and prices are getting to that point for producers in Brazil and Vietnam. Mostly dry conditions are in the forecast for this week. Vietnam is active in its harvest and the export pace has been good so far this year. Prices have been trending lower with the London futures.
Overnight News: ICE certified stocks are unchanged today at 2.479 million bags. The ICO daily average price is now 93.99 ct/lb. Brazil will get mostly dry conditions with near normal temperatures. Some showers are possible on Sunday. Near to above normal temperatures are expected next week. Vietnam will see mostly dry conditions.
Chart Trends: Trends in New York are down with objectives of 86.00 and 81.00 May. Support is at 88.00, 85.00, and 82.00 May, and resistance is at 93.00, 95.00 and 97.00 May. Trends in London are down with no objectives. Support is at 1370, 1360, and 1330 May, and resistance is at 1440, 1460, and 1480 May.

SUGAR
General Comments: Futures were mostly a little lower in reaction in part to the weaker Brazilian Real. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support big production ideas. Brazil weather is improving in all areas as there is less rain in southern areas and more to the north. Brazil has been using a larger part of its Sugarcane harvest to produce ethanol this year instead of Sugar, but Thailand has shown increased production this year. Ideas that production in India and Pakistan is being hurt by news that Indian mills are asking the government not to force them to sell Sugar into a depressed world market in order to try to maintain some control over operating losses. Current weather conditions are good, and the Indian Weather Service has forecast a normal monsoon this year. Very good conditions are reported in Thailand, but production could be les as farmers switch to other crops due to low world prices.
Overnight News: Brazil will get mostly dry weather, but showers are possible on Sunday. Temperatures should be near normal.
Chart Trends: Trends in New York are mixed. Support is at 1260, 1250, and 1240 July, and resistance is at 1290, 1300, and 1330 July. Trends in London are mixed. Support is at 333.00, 331.00, and 328.00 August, and resistance is at 340.00, 342.00, and 344.00 August.

COCOA
General Comments: Futures closed lower in both markets, but New York was the weaker market due to currency relationships between the US Dollar and the British Pound. Trends are turning down after the price action yesterday. The main crop harvest should be about over and mid crop harvest is still a month or more away. Ivory Coast arrivals are strong as are exports. The weekly arrivals pace is about 10% higher than a year ago and is holding this level. Arrivals are now estimated at 1.763 million tons. Arrivals were reported strong in the rest of West Africa as well. Demand appears strong and the market is expecting stronger grind data when the quarterly grind is released in the EU, North America, and Asia over the next couple of weeks. Growing conditions are generally good in West Africa. Conditions appear good in East Africa and Asia, but East Africa has been a little dry as has Malaysia.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average 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 higher today at 4.251 million bags. ICE said that 298 notices were posted against May contracts and that total deliveries for the month are now 298 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2320, 2290, and 2280 July, with resistance at 2380, 2420, and 2430 July. Trends in London are mixed to up with objectives of 1790 and 1830 July. Support is at 1710, 1690, and 1660 July, with resistance at 1770, 1800, and 1820 July.

DJ Asian Cocoa Grindings Rise 9.5% in 1Q On Year
By Lucy Craymer
Asian cocoa grindings rose 9.5% in the first quarter from the same period last year to 208,388 metric tons, according to figures issued by the Cocoa Association of Asia on Wednesday.
However, grindings were down 0.25% on the fourth quarter.
Grindings refer to the volume of cocoa beans processed into the butters and powders used to make chocolate and are often used as a proxy for chocolate demand.
The data reflect the compilation of grindings from Malaysia as well as from Cocoa Association of Asia members in Singapore and Indonesia.

DJ European Cocoa Grindings in 1Q Rise to Highest Since at Least 2002
By David Hodari
European processing volumes of raw cocoa beans hit their highest level in at least 17 years at the start of the 2018-19 season, according to data released Tuesday by the European Cocoa Association.
Cocoa grindings–the amount of raw cocoa processed into butter and powder for the manufacturing of confectionary and chocolate–accelerated to 3.3% on-year in the first quarter from 1.6% on-year growth in the fourth quarter. Still, that pace was slower than the 5.5% growth in the first quarter of 2018.
Grindings are interpreted by the market as a proxy for demand.
Despite gentle increases in the second half of the 2017-18 season, annual grindings grew at 4.2% last season to post the strongest rise in cocoa processing since 2010-11.
That looks set to continue this season, with a quarterly grind of 370,359 tons being the highest first-quarter figure since at least 2002.
Weather conditions in western Africa have been broadly conducive to crop growth and port arrivals have remained relatively strong, with first-quarter grindings largely in line with analysts’ expectations of traders surveyed by The Wall Street Journal, who expected a pickup in growth after mild expansion at the end of last year.
Grinding numbers for North America provided by the National Confectioners Association, and for Asia from the Cocoa Association of Asia, are expected to be released in the coming weeks.
The ECA represents 20 companies in the European Union and Switzerland, including Barry Callebaut AG (BARN.EB), Cargill Cocoa & Chocolate Inc., Ferrero SpA, Nestle SA (NESN.EB) and Mondelez International Inc. (MDLZ).



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About the author


Jack Scoville is a futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar.

He offers brokerage services to an international clientele of agricultural producers, processors, exporters, and other professional traders.

Jack writes daily comments of the many products he specializes in, in three languages, English, Spanish, and Portuguese.

He has been quoted by most major wire services including Dow Jones, AP, and Reuters. His comments have also appeared in newspapers around the world and on various radio and television shows.

Jack offers a dedicated and high quality service for his clients. His industry contacts in South America, Europe, Asia, and North America provide him with a unique view of the markets. He also uses his own charting program for technical traders.

Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles. He has been a broker off the floor since then and has been with The PRICE Futures Group since it was established in 1988.

Contact Jack Scoville: (800) 769-7021 or at jscoville@pricegroup.com

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