Agriculture Markets Update – Wednesday, Sept. 15

Weekly US Cotton Futures

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Frozen Concentrated Orange Juice and Citrus

FCOJ closed higher on Friday and higher for the week and chart trends are still mostly upon weather concerns, especially for Brazil but also for Florida and Mexico. A freeze hit Sao Paulo state several weeks ago and reports of significant losses are being heard. 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 are too dry, but the rest of northern and western Mexico are rated in good condition.

Weekly FCOJ Futures

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New York and London closed lower last week as speculators appeared to liquidate some long positions and as chart trends started to turn down. London is having trouble sourcing Coffee from Vietnam due to a shortage of containers to carry the Coffee out of the country and the expansion of the Delta variant that has caused so many problems around the world and is really affecting the Vietnamese. Prices in New York have been firm as the current Brazil harvest starts to wind down with smaller production. The damage from the Brazil freeze several weeks ago is apparent. Some trees were killed and will have to be replaced. Scattered showers are now in the forecast for Southeast Asia. Good conditions are reported in northern South America and good conditions are reported in Central America. Colombia is having trouble exporting Coffee due to protests inside the country. Conditions are reported to be generally good in parts of Africa, but Ivory Coast and Ghana have been a little dry.

Weekly New York Arabica Coffee Futures

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Weekly London Robusta Coffee Futures

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New York and London were lower last week and the trends turned mostly down on the daily and weekly charts.  The reduced production potential from Brazil is still impacting the market, but the stronger US Dollar makes Sugar more expensive in local currency terms and the recently weaker Crude Oil prices mean that Ethanol prices will probably work lower. Wire reports suggest that Ethanol and Sugar prices are at parity so any lower Crude Oil prices now could mean that Ethanol prices move below those of Sugar. That idea is not seen in the latest UNICA data that showed a slightly greater percentage of Sugarcane processed for Ethanol than Sugar in the latest two-week period. The ISO has noted that this will be the second year of deficit production for the world, in large part because of the Brazil freeze that cut production. Consumption of Sugar remains on the light side. Fears that the Covid is returning and could reduce economic activity and demand are around. The market is still working through a short supply. The freeze and drought damage is there in Brazil as industry sources have said to expect a short season for processing. Thailand is expecting improved production.

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