Softs Report 11/09/18

DJ USDA Supply/Demand: Crop Summary – Nov 8
U.S. ending stocks in million bushels, except soy oil in million pounds,
cotton in million (480 pound) bales and rice in million cwt. Exports and
Production in million metric tons except cotton in million (480 pound) bales.
Projections based on trends and analysts’ judgments, not survey
date. Source: USDA’s World Agricultural Outlook Board.
======U.S.====== ================WORLD========================
Ending Stocks Exports Production
18/19 17/18 16/17: 18/19 17/18 16/17: 18/19 17/18 16/17
Soybeans 955.0 438.0 302.0:155.44 153.19 147.39:367.50 338.57 348.95
Brazil na na: 77.00 76.19 63.14:120.50 119.80 114.60
Argentina na na: 8.00 2.11 7.03: 55.50 37.80 55.00
China na na: 0.10 0.15 0.11: 16.00 15.20 13.64
Soyoil 1,915 1,990 1,711: 11.21 10.36 11.25: 57.44 55.17 53.68
Corn 1,736 2,140 2,293:165.64 146.80 160.05:1,098.95 1,076.231,122.45
China na na: 0.05 0.02 0.08:256.00 259.07 263.61
Argentina na na: 28.00 23.00 25.99: 42.50 32.00 41.00
S.Africa na na: 1.90 2.30 2.29: 13.00 13.53 17.55
Cotton(a) 4.30 4.30 2.75: 41.13 40.94 37.90:119.39 123.70 106.66
All Wheat 949 1,099 1,181:178.79 181.25 183.35:733.51 763.06 756.51
China na na: 1.20 1.00 0.75:132.50 134.33 133.27
EU 27 na na: 23.00 23.29 27.43:137.60 151.26 145.37
Canada na na: 24.00 21.95 20.16: 31.50 29.98 32.14
Argentina na na: 14.20 12.00 13.83: 19.50 18.50 18.40
Australia na na: 11.50 14.00 22.64: 17.50 21.30 31.82
Russia na na: 35.00 41.42 27.81: 70.00 84.99 72.53
Ukraine na na: 16.50 17.78 18.11: 25.00 26.98 26.79
Sorghum 39.0 35.0 33.0: na na na
Barley 88.0 94.0 106.0: na na na
Oats 36.0 41.0 50.0: na na: na na na
Rice 46.7 29.4 46.0: 48.91 47.82 47.25:490.70 494.31 490.19

DJ USDA Report: Summary for U.S. Agriculture Supply, Demand Report
Following are key numbers from the USDA’s crop report Thursday and how the government’s estimates compared to analysts’ forecasts in a Wall Street Journal survey.
U.S. 2018 Corn, Soybean Production (million bushels)
Thursday’s Average USDA
USDA Est. Forecast Range Oct.
Corn Production 14,626.0 14,711 14,576-14,806 14,778
Corn Yield 178.9 180.0 178.2-181.4 180.7
Harvested Acres 81.8 81.8 81.5-81.8 81.8
Soybean Production 4,600.0 4,676 4,637-4,706 4,690
Soybean Yield 52.1 53.0 52.5-53.5 53.1
Harvested Acres 88.3 88.3 87.9-88.4 88.3
****
U.S. 2018-19 Stockpiles (millions)
Thursday’s Average USDA
USDA Est. Forecast Range Oct.
Corn 1,736.0 1,781 1,566-2,105 1,813
Soybeans 955.0 900 832-984 885
Wheat 949.0 966 925-1,025 956
****
World Stockpiles (million metric tons)
2017-18
Thursday’s Average USDA
USDA Est. Forecast Range Oct.
Corn 340.9 198.3 198.0-199.5 198.2
Soybeans 99.7 96.9 96.7-98.0 96.7
Wheat 279.0 275.0 274.5-276.0 274.9
2018-19
Thursday’s Average USDA
USDA Est. Forecast Range Oct.
Corn 307.5 158.6 156.9-160.2 159.4
Soybeans 112.1 110.8 107.3-113.5 110.0
Wheat 266.7 259.3 257.4-261.5 260.2

COTTON
General Comments Cotton was higher yesterday in response to bullish estimates from USDA. Speculators were the best buyers. USDA cut production estimates in a big way for the US and also cut world production estimates. Demand was also trimmed, but not as much as production, so ending stocks were lower. The market was limit up for much of the day, but than gave back most of the gains and closed mixed. Even so, ICE has said that the market will operate with extended limits today.. The market needs new demand. Export sales for the last few weeks have been poor and show no real signs of improvement for now. Export demand needs to improve soon for prices to rally significantly this year, but any increase in demand has to come with no purchases from China for a while.
Overnight News: The Delta should get mostly dry weather and cool temperatures. Some light rain is possible today and tomorrow. The Southeast will get dry weather except for rains today and tomorrow. Temperatures should trend to near to below normal. Texas will have mostly dry weather. Temperatures will be variable. The USDA average price is now 75.22 ct/lb. ICE said that certified stocks are now 59,164 bales, from 41,554 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 7830, 7780, and 7740 December, with resistance of 7980, 8010, and 8030 December.

DJ USDA Cotton Ginnings-Nov 8
Cotton Ginnings: Running Bales Ginned (Excluding Linters)
As of November 1, Crop Years 2015-2018
by Crop, State, and United States
==========================================================================
Crop and State Running bales ginned
——————————————————-
2015 2016 2017 2018
==========================================================================
number
Upland
US 3,622,250 4,931,050 4,824,800 4,776,350
American Pima
US 81,450 84,600 89,750 100,450
All Cotton
US 3,703,700 5,015,650 4,914,550 4,876,800
==========================================================================

DJ USDA Supply/Demand: U.S. Cotton – Nov 8
U.S. Cotton Supply and Use 1/
=========================================================================
Item 2017/2018 2018/2019
prev Nov 8 prev Nov 8
==========================================================================
Area
Million acres
Planted 12.61 12.61 14.04 14.04
Harvested 11.10 11.10 10.53 10.37
Pounds
Yield per harv. acre 905 905 901 852
Million 480 pound bales
Beginning stocks 2.75 2.75 4.30 4.30
Production 20.92 20.92 19.76 18.41
Imports 0.00 0.00 0.01 0.01
Supply, total 23.68 23.68 24.07 22.71
Domestic use 3.23 3.23 3.40 3.30
Exports 15.85 15.85 15.50 15.00
Use, total 19.07 19.07 18.90 18.30
Unaccounted 2/ 0.30 0.30 0.17 0.11
Ending stocks 4.30 4.30 5.00 4.30
Avg. farm price 3/ 68.00 68.60 69.00 – 77.00 71.00 – 77.00
==========================================================================
1/ Upland and extra-long staple; marketing year beginning August 1. Totals
may not add due to rounding. 2/ Reflects the difference between the
previous season’s supply less total use and ending stocks. 3/ Cents per
pound for upland cotton.

DJ USDA Crop Production: U.S. All Cotton/Cottonseed-Nov 8
Cotton: Area Harvested, Yield, and Production by Type, State,
and United States, 2017 and Forecasted Nov 1, 2018
=============================================================================
Area Harvested Yield Production 1/
State ======================================================================
2017 2018 2017 Oct 1 2018 2017 Oct 1 2018
=============================================================================
1,000 Acres ==Pounds== == 1,000 Bales 2/ ==
Upland
U.S. 10,850.0 10,129.0 895.0 887.0 836.0 20,223.0 18,992.0 17,637.0
Amer-Pima
U.S. 250.4 245.4 1,341.0 1,508.0 1,508.0 699.5 771.0 771.0
All
U.S. 11,100.4 10,374.4 905.0 901.0 852.0 20,922.5 19,763.0 18,408.0
=============================================================================
1/ Production ginned and to be ginned.
2/ 480-pound net weight bale.
Cottonseed: Production, United States,
2017 and Forecasted Nov 1, 2018
=============================================================================
Production
State ====================================================================
2017 2018 1/
=============================================================================
1,000 Tons
U.S. 6,422.0 5,799.0
=============================================================================
1/ Based on a 3-year average lint-seed ratio.

DJ USDA Supply/Demand: World Cotton – Nov 8
World Cotton Supply and Use 1/
(Million 480-pound bales)
=============================================================================
beginning domestic exports ending
stocks prod imports use loss 2/ stocks
=============================================================================
2018/19 (Projected)
World
Oct 80.89 121.66 41.44 127.76 41.45 0.33 74.45
Nov 80.39 119.39 41.11 126.88 41.13 0.27 72.61
United States
Oct 4.30 19.76 0.01 3.40 15.50 0.17 5.00
Nov 4.30 18.41 0.01 3.30 15.00 0.11 4.30
Total foreign
Oct 76.59 101.89 41.43 124.36 25.95 0.16 69.45
Nov 76.09 100.98 41.11 123.58 26.13 0.16 68.31
Major exporters 4/
Oct 26.61 54.86 2.22 34.70 21.77 0.02 27.21
Nov 26.10 54.44 2.22 34.45 21.97 0.02 26.31
Major importers 8/
Oct 47.89 44.02 36.72 85.56 2.86 0.14 40.07
Nov 47.91 43.53 36.40 85.04 2.84 0.14 39.82
=============================================================================

DJ On-Call Cotton – Nov 8
As of Nov 2. 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
Dec 18 18,131 21,079 -2,948 15,193 16,361 -1,168
Mar 19 39,331 38,700 631 5,330 4,852 478
May 19 19,795 19,682 113 947 720 227
Jul 19 29,609 28,541 1,068 2,140 1,938 202
Dec 19 16,604 16,527 77 17,780 17,817 -37
Mar 20 5,437 5,382 55 209 209 0
May 20 2,100 2,078 22 0 0 0
Jul 20 1,872 1,872 0 0 0 0
Dec 20 1,166 1,166 0 2,500 2,500 0
Total 134,045 135,027 -982 44,099 44,397 -298
Open Change
Int
Dec 18 116,433 127,153 -10,720
Mar 19 87,111 78,941 8,170
May 19 20,220 18,100 2,120
Jul 19 12,855 10,602 2,253
Oct 19 4 4 0
Dec 19 27,996 27,034 962
Mar 20 970 861 109
May 20 68 68 0
Jul 20 33 33 0
Dec 20 825 825 0
Total 266,515 263,621 2,894

FCOJ
General Comments: FCOJ was lower yesterday as the weather is good for harvesting. The move down came despite estimates from USDA that Florida Oranges production is 77 million boxes, down 2 million boxes from last month. US production was estimated at 128.4 million boxes, from 130.4 million last month. The market is holding a support area on the charts, and this created a little speculative buying. The Oranges harvest is active in Florida under good weather conditions. Chart trends are sideways.. Overall growing conditions in Florida are good to very good, and there is no storm development in the Atlantic at this time. Florida producers are seeing small-sized to good-sized fruit, and work in groves maintenance is active. Irrigation is being used in all areas. Packing houses are open to process fruit for the fresh market, and a couple of major processors are open in the state to take packing house eliminations.
Overnight News: Florida should get mostly dry conditions or light showers. Temperatures will average near to above normal. Brazil should get scattered showers and near to above normal temperatures. ICE said that 0 contracts were delivered against November futures and that total deliveries for the month are now 352 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 136.00, 133.00, and 130.00 January, with resistance at 139.00, 141.00, and 143.00 January.

COFFEE
General Comments: Futures were higher again in both markets again yesterday even as the US Dollar moved higher. Currency relationships, and especially the rate between the US Dollar and the Brazilian Real, continue to be the driving force in Coffee trading, but something else supported the markets yesterday. The Brazil crops are getting harvested now, but are not always finding their way to the market due to the overall Real strength against the Dollar. Producers are also looking ahead to next year. El Nino remains in the forecast and Coffee areas in Brazil could be affected by drought. This is the off-year for production there, anyway, and a drought would mean even less production. Vietnam is getting close to its next harvest. Production in Vietnam is estimated at or above 30 million bags. Producers in both countries are not selling much. Some problems with too much rain have been noted in Central America. Drier conditions are wanted for harvesting, and mostly dry weather is in the forecast as the calendar turns to November.
Overnight News: Certified stocks are higher today and are about 2.452 million bags. The ICO composite price is now 112.69 ct/lb. Brazil will get showers in the north and east today, then drier weather. Temperatures should be near to below normal. Colombia should get isolated showers. Central America and southern Mexico should get showers or dry conditions. Vietnam will get showers.
Chart Trends: Trends in New York are mixed. Support is at 113.00, 111.00, and 109.00 December, and resistance is at 119.00, 121.00 and 123.00 December. Trends in London are mixed to down with objectives of 1640 January. Support is at 1660, 1650, and 1620 January, and resistance is at 1710, 1730, and 1740 January.

DJ ICO Coffee Price Index Leapt 13% in October Amid Real Jump
By David Hodari
LONDON–The International Coffee Organization’s composite indicator price in October 2018 reversed its four-month fall to leap 13.3% on the month.
The ICO composite indicator rose to 111.21 U.S. cents a pound from 98.17 U.S. cents in September.
Prices climbed for all groups of arabica coffee. Among arabica types, Brazilian naturals leapt 15.7%, with other milds up 13.3% and Colombian mild prices increasing 12%. Robusta beans also sharply jumped, rising 11%.
The arbitrage between low-grade robusta and its higher-quality peer leapt 22.3%, while intraday volatility climbed to 7.2%, the ICO said in a report.
Total exports hit a new record in 2017-2018 with 121.86 million bags, up 2% from the previous coffee year.
World production in 2017-2018 is estimated at 163.5 million bags, 4.8% higher than last year, with arabica output expected up 1.7% at 101.23 million bags, the report said. Robusta production grew 10.5% to 62.28 million bags.
The ICO attributed a large proportion of coffee’s jump in October to the gyrations of the Brazilian real–Brazil is the world’s largest coffee grower–with the currency leaping amid the electoral victories of right-wing candidate Jair Bolsonaro, who is perceived as pro-business by markets.
London-traded robusta was last down 1.3% at $1,662 a ton, and arabica was down 2.1% at $1.14 a pound.

DJ Brazil Exported 3.7M Bags of Coffee in October — Cecafe
SAO PAULO–Brazilian coffee exports rose in October from a year earlier as sales abroad of both the arabica and robusta varieties jumped, according to exporters group Cecafe.
The South American country exported 3.7 million 132-pound bags of coffee last month, a record for the month and an increase of 29.1 from the same month a year earlier, Cecafe said Thursday.
Sales abroad of the arabica variety of coffee rose 20.2% to 3.1 million bags, while exports of robusta beans increased to 364,715 bags from 19,228 bags in October 2017.
Brazil is the world’s biggest producer of arabica beans, and the second-biggest of the robusta variety, after Vietnam. The country’s production of both varieties is up this year. The arabica harvest follows a two-year cycle in which even-numbered years usually produce bigger harvests, then output declines in odd-numbered years as the plants “rest.”
At the same time, the robusta crop is recovering from a two-year drought in the state of Espirito Santo, where most of Brazil’s robusta is grown.
Exports of roasted, ground and instant coffee declined 6.8% in October to 290,942 bags, Cecafe said.

SUGAR
General Comments: New York and London both closed lower on currency considerations and on new weakness in petroleum futures. A much stronger US Dollar created some fund selling interest. The US Dollar Index shows that a low might have been completed yesterday. The downside potential of the market should be limited on ideas that world production is in fact dropping and might be less than though just a few weeks ago. Production losses are expected in India due to hot and dry weather earlier in the growing season and some recent reports of pest attacks. Dry conditions continue in the EU, and Russia, but conditions are mostly good in Ukraine. Very good conditions are reported in Thailand. Brazil producers are worried about Cane production, and the market still talks about less production there this year. It was dry earlier, but most areas have had enough or too much rain now. The wet areas are mostly in the center-south region. The dry weather in much of Europe and in southern Russia near the Black Sea has hurt Sugar beets production potential in these areas.
Overnight News: Brazil will get showers in the north and east today, then drier weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are down with objectives of 1230 March. Support is at 1270, 1240, and 1230 March, and resistance is at 1320, 1350, and 1370 March. Trends in London are down with no objectives. Support is at 338.00, 336.00, and 330.00 March, and resistance is at 346.00, 351.00, and 355.00 March.

COCOA
General Comments Futures closed sharply lower as the US Dollar moved sharply higher. The biggest losses were in New York, but New York usually outpaces rallies or selloff when compared to London.. The outlook for strong production in the coming year is still around, but there are some disease concerns for West Africa as a lot of humid air has promoted some concerns that Black Pod Disease could spread. However, weather in the region is drier now and any production losses should be limited. The main crop harvest is in its earliest stages in some parts of West Africa. Main crop production ideas for Ivory Coast and Ghana are being reduced, with Ivory Coast now estimating its main crop production at 1.985 million tons, down from previous estimates just over 2.0 million tons. Conditions appear good in East Africa and Asia. Demand is said to be improving as offers from the new harvest start to increase.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average mostly 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 3.695 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 2430 and 2500 December. Support is at 2230, 2170, and 2150 December, with resistance at 2350, 2400, and 2420 December. Trends in London are mixed. Support is at 1640, 1610, and 1600 December, with resistance at 1680, 1700, and 1720 December.