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
Price Group Estimates of Major U.S. Planting Levels*
USDA Ag Forum Price Change
15/16 16/17 17/18 E- 17/18 vs. 2015/16
Corn 88.00 94.00 90.00 90.28 -3.724
Beans 82.65 83.43 88.00 88.30 4.867
Sprg Wht 13.37 11.61 11.52 11.35 -0.255
Durum 1.95 2.41 2.10 2.08 -0.337
Winter 39.68 36.14 32.38 32.33 -3.807
All Wheat 55.00 50.15 46.00 45.76 -4.394
Oats# 3.09 2.83 2.75 2.92 0.092
Barley# 3.62 3.05 2.85 2.90 -0.152
Sorghum# 8.46 6.69 6.10 6.30 -0.390
All Cotton 8.58 10.07 11.50 11.45 1.376
Rice 2.63 3.15 2.60 2.65 -0.500
Total 252.02 253.39 249.80 250.56 -2.83
* millions of acres #AG F 11.7 mln aggrete for these crops
General Comments: Cotton futures closed lower and trends started to turn down on the charts. The USDA reports on Friday will likely show the potential for a big US crop. The potential for a big crop has captured all of the attention this week, with demand pushed to the background. Export demand has remained strong and much stronger than expected by just about everyone. Unexpected buying by China has supplemented strong buying by Southeast Asia and the Middle East. Buying is also seen from India and Pakistan to cover short term needs after reduced crops last year. These two countries are now said to be looking at Australian Cotton for further imports. The USDA plantings intentions reports that could show a sharp increase in Cotton planted area. USDA had projected area at about 11.5 million acres in February, but some analysts look for area as high as 12 million acres due to the recent price strength. The average trade guess released by Reuters last week was just under 11.5 million acres. Cotton remains mostly a demand story as US export demand has been strong and US mills have yet to price a lot of on call purchases. Ideas that US buyers have a large amount of Cotton bought but unpriced also supported futures. These buyers will need to buy futures sooner or later to fix prices, and the number of contracts open through July is big.
Overnight News: The Delta and Southeast should get chances for showers and rains every few days, with best amounts and coverage on today and tomorrow and Sunday. Temperatures should will average above normal after a below normal day today. Texas will see chances for light showers through the weekend, although some western areas will stay mostly dry. Temperatures will be above normal. The USDA average price is now 73.21 ct/lb. ICE certified stocks are now 321,350 bales, from 327,251 bales yesterday. USDA said that net Upland Cotton export sales were 392,300 bales this year and 84,300 bales next year. Net Pima sales were 10,100 bales this year and 900 bales next year.
Chart Trends: Trends in Cotton are mixed to down with objectives of 7570, 7510, and 7420 May. Support is at 7600, 7550, and 7510 May, with resistance of 7720, 7820, and 7860 May.
General Comments: FCOJ closed a little lower in nearby months, but firm in new crop months. The market has moved back to the bottoming area that formed in January and February of this year and made a complete retracement of the move in just about a week and a half of trading. The charts show that the market failed at some important resistance areas last week, now it needs to hold near current levels. The market remains in a bullish supply market mode, with reduced domestic demand keeping prices relatively weak. Domestic production remains very low due to the greening disease and drought. Florida remains very dry. Trees are in bloom in all areas of the state, and petals are starting to drop in some areas as fruit is forming. Good rains are needed for the bloom and initial fruit development. Irrigation is being heavily used to prevent loss. There have been some showers reported in the last couple of weeks, but more is wanted. The harvest has been very active. Early and Mid Oranges are moving mostly to processors. The Valencia harvest is moving to processors and into the fresh market. Major freezes in southern Europe this Winter have damaged the citrus production. Brazil crops remain in mostly good condition.
Overnight News: Florida should see dry weather and mostly below normal temperatures. Brazil should get episodes of scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are down with no objectives. Support is at 167.00, 165.00, and 163.00 May, with resistance at 173.00, 176.00, and 180.00 May.
General Comments: New York and London both closed sharply lower and are now testing the contract lows set just a couple of weeks ago. The market is trying to prepare for a move, and given the weakness seen lately the next move might be up. There is no Business being done in the physical market at these levels, or at least not enough for the demand, and roasters remain the best buyers in futures. Ideas are that Robusta supplies are tight once again, and London has better chart patterns to promote a rally than New York. The cash market in Central America remains quiet, with little buying interest against moderate selling interest. Offers are less from El Salvador, Nicaragua, and Costa Rica, but good volumes are available from Honduras and Guatemala. Peru is also said to be offering good volumes. Vietnamese prices are now at or near record highs, and there does not seem to be much Robusta around from other sources, with both Brazil and Indonesia mostly out of the market.
Overnight News: Certified stocks are higher today and are about 1.351 million bags. The ICO composite price is now 132.93 ct/lb. Brazil will get mostly dry weather. Temperatures should average near to below normal this week and near to above normal this weekend. Colombia should get scattered to isolated showers. Central America and southern Mexico should get mostly dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are down with objectives of 137.00, 130.00, and 126.00 May. Support is at 135.00, 132.00, and 129.00 May, and resistance is at 140.00, 144.00 and 147.00 May. Trends in London are mixed. Support is at 2140, 2120, and 2090 May, and resistance is at 2200, 2230, and 2260 May.
General Comments: New York and London closed mixed, with nearby months a little lower. The short term trend direction remains down, and another attempt to make new lows is probably coming. The cyclone moving into Australia could be damaging Sugarcane crops there, but the market was not worried. It also no longer appears concerned about near term supply tightness as there are ideas of less demand. India especially has been out of the market. It had been expected to be a strong buyer due to reduced sugarcane production last year due to the neven monsoon. The world situation would imply that production can recover after El Nino induced losses last year. However, there are indications that El Nino could return, and smaller crops might be produced in India once again. The weather Service there is looking for a normal monsoon. Brazil could also have better crops this year as rains have been good in Center South areas. It remains much drier than normal in the Northeast. Southeast Asia has good growing conditions.
Overnight News: Brazil will get mostly dry weather. Temperatures should average near below normal this week and near to to above normal this weekend.
Chart Trends: Trends in New York are mixed to down with objectives of 1640 and 1570 May. Support is at 1680, 1650, and 1620 May, and resistance is at 1750, 1800, and 1820 May. Trends in London are mixed to down with objectives of 480.00 and 477.00 May. Support is at 482.00, 478.00, and 476.00 May, and resistance is at 494.00, 497.00, and 503.00 May.
General Comments: Futures markets closed lower as nearby Support areas were broken on the charts. Trends started to turn back down on the charts with the price action. The fundamentals suggest that the overall market can stay weak, as supplies still appear to be increasing but demand remains weak. The production this year could be a record in Ivory Coast and is above last year in Ghana, although not a record. Both countries ar eexperiencing moderate weather at this point in the dry season, with some showers now and without the extreme heat or Harmattan winds. Demand has been weak, but might start to improve soon as prices for Cocoa and products have turned much lower. Mostly good conditions are reported in Southeast Asia, but some producers have switched to other crops such as pepper as these producers look for better returns on their investments and work.
Overnight News: Mostly dry conditions are expected in West Africa, but some showers are possible. Temperatures will average near to above normal. Malaysia and Indonesia should see scattered showers in all areas. Temperatures should average near normal. Brazil will get mostly dry conditions or light showers and near to above normal temperatures. ICE certified stocks are higher today at 4.742 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2070, 2000, and 1830 May. Support is at 2080, 2040, and 2000 May, with resistance at 2120, 2190, and 2220 May. Trends in London are mixed to down with objectives of 1660 and 1610 May. Support is at 1660, 1630, and 1620 May, with resistance at 1730, 1760, and 1790 May.
Questions? Ask Jack Scoville today at 312-264-4322
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Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also involves a high degree of risk. The leverage created by trading on margin can work against you as well as for you, and losses can exceed your entire investment. Before opening an account and trading, you should seek advice from your advisors as appropriate to ensure that you understand the risks and can withstand the losses.
The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2017
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