About The Author

Jack Scoville

Jack Scoville is an often quoted market analyst in the grain and soft commodities sectors. You will find his commentary throughout the Reuters, Wall Street Journal, Dow Jones, Bloomberg, and Barron's publications. Contact Mr. Scoville at (312) 264-4322

COTTON
General Comments: Futures closed a little higher. The market remains worried about big supplies owned by the Chinese goverment. Tthe government owns huge supplies at this time and has little prospect to lower the stocks without pressuring the market. That could do big damage to export demand from the US as China is the biggest export customer for the Cotton. The US economic news this week was positive as the FED is now willing to cut back on the support for the US economy due to continued slow but steady expansión and reduced unemployment. Brazil conditions are reported to be very good in Bahia. Charts show that the market completed a major low last week and remains mostly in up trends.
Overnight News: The Delta and Southeast should see dry conditions, but a few showers are posible about today and tomorrow. Temperatures will average above normal this weekend and near to below normal next week. Texas will see dry conditions. Temperatures will average below normal this weekend and near to above normal next week. The USDA spot price is 79.71 ct/lb. today. ICE said that certified Cotton stocks are now 0.040 million bales, from 0.041 million yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 83.20, 82.30, and 81.80 March, with resistance of 83.70, 84.00, and 84.40 March.

DJ China Zhengzhou Cotton Futures Closing Prices, Volume
Friday, December 20 2013
Product Settle PrevSettle Change Open High Low Volume Open Int
CF401 18,750.00 18,915.00 -165.00 18,810.00 18,880.00 18,690.00 268 2,484
CF403 18,945.00 19,115.00 -170.00 18,990.00 18,990.00 18,840.00 10 62
CF405 18,840.00 18,850.00 -10.00 18,875.00 18,875.00 18,810.00 12,840 60,810
CF407 18,625.00 18,625.00 0.00 0.00 0.00 0.00 0 46
CF409 18,430.00 18,385.00 45.00 18,445.00 18,465.00 18,405.00 2,848 17,980
CF411 17,395.00 17,405.00 -10.00 17,385.00 17,405.00 17,380.00 312 11,248
Notes:
1) Unit is Chinese yuan a metric ton;
2) Change is the day’s settlement minus previous settlement;
3) Volume and open interest are in lots;
4) One lot is equivalent to 5 metric tons.

FCOJ
General Comments: Futures closed a little lower again. Florida remains warm and dry, and there does not seem to be anything going on with the weather systems to expect any dangers to the crop for the short term. The greening disease has affected crops in a big way and could cause reduced production for the next few years. Growing and harvest conditions in the state of Florida remain mostly good. It has turned mostly dry, but irrigation wáter is available and is being used. Harvest is very active, but fruit sizes are reported to be small. Brazil is seeing near normal temperatures and scattered showers.
Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average mostly above normal.
Chart Trends: Trends in FCOJ are mixed. Support is at 140.00, 136.50, and 133.50 January, with resistance at 145.00, 146.00, and 148.00 January.

COFFEE
General Comments: Futures were lower in quiet speculative and comercial selling. London remained down in part on speculative selling tied to ideas of increased offers from Vietnam and from other Robusta producting countries. Vietnamese differentials are dropping even as futures move lowr, implying that offers of Robusta have increased. Offers of Arabica into the cash market remain dfficult to find, at least in Central America. The increased Robusta price should hurt Arabica demand as roasters will find it easier to buy the Robusta now. Vietnamese exporters are talking about small beans this year, although they also say that the quality is better than last year. But, it seems that the overall volume of production is less than expected before the harvest, although still very good. The Arabica market is seeing only light offers, and buying interest for Arabica overall has increased.
Overnight News: Certified stocks are higher today and are about 2.675 million bags. The ICO composite price is now 107.44 ct/lb. Brazil will get scattered showers, mostly in the north and east. Temperatures will average near normal. Colombia should get scattered showers, and Central America and Mexico should get mostly dry weather. Temperatures should average near to above normal. Conab estimated Brazil 2013 Coffee production at 49.2 million bags, from 47.5 million in its previous estimate.
Chart Trends: Trends in New York are up with objectives of 122.00 March. Support is at 113.00, 112.00, and 111.00 March, and resistance is at 117.00, 120.00, and 122.00 March. Trends in London are down with objectives of 1690 and 1600 January. Support is at 1680, 1660, and 1620 January, and resistance is at 1780, 1850, and 1860 January. Trends in Sao Paulo are up with objectives of 143.00 and 151.00 March. Support is at 136.00, 135.00, and 131.00 March, and resistance is at 142.50, 145.00, and 146.00 March.

SUGAR
General Comments: Futures were highe on speculative short covering and on news that Indonesia could increase the import pace soon. The country is expected to drop its import tax in the near futures to encourge business. It expects to créate buffer stocks of 300,000 tons over the short term. The primary focus of the market remains big supplies with no mention of above normal demand anywhere. Increased offers from India and Thailand combined with good supplies available from Brazil keep overall trends down. However, the big offer from Brazil and the big harvest there is starting to wind down as mills start to shut doen finally for the season and as rains increase. Thai offers are big right now as the harvest is very active there and differentials have been steady to lower. Chart trends remain down in New York and London. Weather conditions in key production áreas around the world are rated as mostly good.
Overnight News: Brazil could see showers and near to above normal tempertures.
Chart Trends: Trends in New York are down with objectives of 1590 and 1570 March. Support is at 1590, 1580, and 1550 March, and resistance is at 1625, 1650, and 1685 March. Trends in London are down with objectives of 432.00 March. Support is at 432.00, 428.00, and 422.00 March, and resistance is at 442.00, 446.00, and 450.00 March.

DJ Brazil Sugar Cane Production Grew 12% in 2013-2014 Growing Season–Conab
SAO PAULO–Brazil’s farmers produced 12% more sugar cane in the 2013-2014 growing season, helped by good weather and an increase in the area planted, Brazil’s crop agency said Friday.
Farmers grew 660 million tons of sugar cane in the season, which is close to ending. Output of ethanol grew 17% from the 2012-2013 season to 27.7 billion liters and sugar production increased 1.2% to 38.8 million tons, according to Conab.
The area planted with cane increased to 8.8 million hectares (21.7 million acres) from 8.5 million hectares in the previous season.
Brazil is the world’s biggest producer and exporter of sugar, and the second-biggest producer of ethanol after the U.S.
Brazil has the biggest fleet of vehicles with that can burn either gasoline or pure ethanol, and most of the country’s production of ethanol is used to power its cars and trucks.

COCOA
General Comments: Futures closed higher in New York and in London, but both markets held to the recent trading ranges. Futures are holding well due to the longer term supply and demand fundamentals. Much of West Africa is now reporting that arrivals and purchases have been strong and above last year. The overall fundamental picture should support generally strong prices as the supply situation should be tight on strong demand for the longer term. Ideas are that demand can remain above production for at least the next couple of years. Much of the increased demand should come from Asia. A good midcrop production is expected in the Spring. Asian growing conditions are reported to be good.
Overnight News: Mostly dry conditions are expected in West Africa, but a few showers are possible. Temperatures will average mostly above normal. Malaysia and Indonesia should see scattered showers. Temperatures should average near to above normal. Brazil will get dry conditions and near normal temperatures. ICE certified stocks are higher today at 3.325 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2740, 2730, and 2690 March, with resistance at 2830, 2840, and 2870 March. Trends in London are up with objectives of 1810 March. Support is at 1770, 1740, and 1710 March, with resistance at 1800, 1820, and 1850 March.
Questions? Ask Jack Scoville today at 312-264-4322

 

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Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented is from sources believed to be reliable and all information is subject to change without notice.

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