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
General Comments: Cotton futures closed lower once again and broke some nearby Support areas on the charts. Trends have turned down again. It looks like production can increase sharply this year as US farmers plan to plant much more Cotton than they did last year. Planting is underway and planted area could be huge The USDA reports showed planted area potential above 12.2 million acres against the average trade guess of 11.4 million acres. However, yield expectations are less, so the overall increase in production might not be all that much. 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. US mills still have yet to price a lot of on call purchases. 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 on Wednesday, otherwise dry weather. Temperatures should will average above normal. Texas will see showers tomorrow, otherwise dry weather. Temperatures will be above normal. The USDA average price is now 72.00 ct/lb. ICE certified stocks are now 328,582 bales, from 327,415 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 7420 and 7400 May. Support is at 7440, 7410, and 7330 May, with resistance of 7550, 7610, and 7670 May.
General Comments: FCOJ closed a little higher after crashing to new lows on Monday. The recent selling has been related to expectations that supplies in Florida can inrease starting next month as a part of the Brazil harvest is expected to be exported to the US. It now appears that the market can continue to move lower now for the next few weeks until buying interest surfaces before the hurricane season that starts in June. Domestic production remains very low due to the greening disease and drought. Florida remains very dry, although there are showers being reported this week. Trees are in bloom in all areas of the state, and petals are starting to drop in some areas as fruit is forming. Small fruit is now being reported in áreas where blooming came early. Irrigation is being heavily used to prevent loss. 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.
Overnight News: Florida should see mostly dry weather and above normal temperatures. Showers are possible on Thursday and then temperatures should trend to below normal. Brazil should get episodes of scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 152.00 May. Support is at 151.00, 149.00, and 148.00 May, with resistance at 159.00, 162.00, and 165.00 May.
General Comments: Futures markets in both cities were a little lower yesterday after trading both sides of unchanged. Bearish traders tried to push the market down early, but failed and prices move to the plus side of the ledger. The half hearted rally attempt failed as well, and futures settled little changed. There is no business being done in the physical market at these levels as prices are low for producers and differentials remain generally weak. Roasters remain the best buyers in futures but are not real active in the cash market. Ideas are that Robusta supplies are tight once again, and that London has better chart patterns to promote a rally than New York. The cash market in Central America shows little buying interest against moderate selling interest. 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 1.361 million bags. The ICO composite price is now 132.75 ct/lb. Brazil will get mostly dry weather today and tomorrow, then increasing chances for showers through Friday, then drier weather over the weekend. Temperatures should average near to above normal. 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 mixed. Support is at 135.00, 132.00, and 129.00 May, and resistance is at 140.00, 143.00 and 144.00 May. Trends in London are mixed. Support is at 2120, 2090, and 2060 May, and resistance is at 2180, 2200, and 2230 May.
General Comments: New York and London closed lower again and both markets made new lows for the move. Ideas are that the current down move is overdone, but no one is brave enough to do much buying. The fundamentals of increasing supply and less than expected demand remain key to the price action. The short term trend direction remains down. Speculators were the best sellers. The market is no longer appears concerned about near term supply tightness because of less than expected 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. India has now decided to permit 500,000 tons of Sugar to be imported basically duty free as the government finally acknowledges the tight supply situation in the country.
Overnight News: Brazil will get mostly dry weather today and tomorrow, then increasing chances for showers. Temperatures should average near to to above normal.
Chart Trends: Trends in New York are down with objectives of 1570 May. Support is at 1590, 1560, and 1530 May, and resistance is at 1670, 1700, and 1720 May. Trends in London are down with objectives of 450.00 May. Support is at 463.00, 460.00, and 457.00 May, and resistance is at 474.00, 483.00, and 489.00 May.
Raw sugar prices surge as India allows duty-free imports
Raw sugar prices soared nearly 5% from an 11-month Low, on the long-awaited news that the Indian government approved the duty-free import of 500,000 tonnes of sugar.
“This is the government’s response to the drought-related production outages that have led to the first local supply deficit in seven years,” said Commerzbank.
“The window for the duty-free imports will remain open until 12 June, so the sugar price may well have bottomed out yesterday.”
May raw sugar futures in New York rose to as high as 16.95 cents a pound in early on the news, and were trading up 3.2% on the previous close, at 16.67 cents a pound, just before 8am New York time.
Exports will be necessary
India is usually a net-exporter of sugar, but the domestic crop, which is just finishing up, was hit hard this year by dry weather after a poor monsoon.
DJ Both Sugar Production and Consumption Set to Grow — Market Talk
0745 GMT Global sugar production and consumption will both increase this year, resulting in the market entering a second consecutive year of deficit in 2016-17, says Jose Orive, executive director of the International Sugar Organization, at an industry conference in Nairobi. While production is expected to rise 1.3% to 168.3 million tons, consumption is forecast to grow 1.6% to 174.2 million tons, he says. Meanwhile, a stronger currency in No. 1 grower Brazil could lift prices of the sweetener in the medium term as farmers hold onto their stocks, he adds. Raw sugar futures in New York are down 15% this year. (email@example.com, @alexandrawexler)
General Comments: Futures markets closed a little higher, but the market is still in the trading range seen for the last week. It was a quiet day. 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 experiencing 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 nvestments and work.
Overnight News: Scattered showers are expected in West Africa. 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 temperaturas. ICE certified stocks are higher today at 4.872 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2060, 2040, and 2000 May, with resistance at 2120, 2190, and 2220 May. Trends in London are mixed. Support is at 1650, 1630, and 1620 May, with resistance at 1710, 1730, and 1760 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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