Jack Scoville
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: Cotton was higher again, with May leading the way before the deliveries start next week. The export sales pace was diminished from recent weeks, but was still considered strong. First Notice Day for May futures is Monday, and some mills are finally covering on call positions that they made in the cash market. The mills did not price sales from producers at cheaper levels and now are forced to pay higher prices. The mills have the same problem in July contracts, so July futures could see similar activity in June. Strong export demand should continue to support futures in the short term. The demand has been much better than anyone expected and caused US farmers to indicate interest in planting much more Cotton this year. Planting has been slow due to the recent rains in most US production areas. The market is seeing that the US has mostly good conditions for planting and development. Enough rain has fallen now, so some dry weather would be favorable for fieldwork, but forecasts call for more showers into next week. Export demand has remained strong and much stronger than expected by just about everyone.
Overnight News: The Delta and Southeast should get more rain into the weekend, with dry conditions returning by Sunday. Temperatures should will average above normal. Texas will see the potential for rains again today and dry weather over the weekend. Temperatures will be above normal. The USDA average price is now 76.40 ct/lb. ICE certified stocks are now 300,959 bales, from 301,768 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 8290 May. Support is at 7940, 7890, and 7800 May, with resistance of 8060, 8120, and 8180 May.

FCOJ
General Comments: FCOJ closed lower on long liquidation after bullish traders could not penetrate resistance on the charts at about 165.00 May. The market has been trying to extend recent grains as the weather remains dry in Florida, but weak demand along with the threat of imports from Brazil is keeping a lid on prices. Dry weather in Florida has been the main reason for the buying interest. Domestic production remains very low due to the greening disease and drought. Trees have lost blooms and the fruit is developing. Small fruit is now being reported everywhere. Irrigation is being heavily used to prevent loss. The harvest has been very active. Early and Mid Oranges are moving mostly to processors, and this part of the harvest is winding down. The Valencia harvest is moving to processors and into the fresh market and is very active. Offers into the US from Brazil continue and will limit upside price potential from the short US crop. Demand reports remain poor.
Overnight News: Florida should see mostly dry weather and near to above normal temperatures. Showers are expected on Sunday and Monday Brazil should get episodes of scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 159.00, 155.00, and 151.00 May, with resistance at 164.00, 168.00, and 169.00 May.

DJ Florida FCOJ Movement And Pack – Apr 21
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 4/15/2017
Corresponding
Current Week Last
Week Season
4/15/2017 4/16/2016 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 189.65 260.07 -27.1%
Retail/Institutional 7.53 7.78 -3.2%
Total 197.18 267.85 -26.4%
Pack
Bulk 3.27 5.84 -44.1%
Retail/Institutional 1.07 1.53 -29.9%
Total Pack 4.34 7.37 -41.1%
Reprocessed -1.99 -3.18 37.5%
Pack from Fruit 2.35 4.18 -43.9%
Receipts & Losses
Net Gain or Loss -0.08 -0.23 64.5%
Imports – Foreign 9.77 6.08 60.8%
Domestic Receipts 0.09 – 100.0%
Receipts of Florida Product
from Non-Reporting Entity – – NC
Chilled OJ used in FCOJ – 0.83 -100.0%
Reprocessed FCTJ 0.03 – NC
Total Carry Over, Receipt & Pack
Bulk 200.74 269.41 -25.5%
Retail/Institutional 8.60 9.31 -7.6%
Total 209.34 278.71 -24.9%
MOVEMENT
Bulk
Domestic 4.30 4.37 -1.4%
Exports 0.22 0.16 32.8%
Total (Bulk) 4.52 4.53 -0.2%
Retail/Institutional
Domestic 1.34 1.84 -27.4%
Exports – – NC
Total (Retail/Inst) 1.34 1.84 -27.4%
Total Movement 5.86 6.37 -8.1%
ENDING INVENTORY
Bulk 196.22 264.87 -25.9%
Retail/Institutional 7.26 7.47 -2.7%
Ending Inventory 203.49 272.34 -25.3%
Total Same
Total Season Period Last
To Date Season
15-Apr-17 16-Apr-16 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 212.24 281.45 -24.6%
Retail/Institutional 6.78 7.81 -13.2%
Total 219.03 289.26 -24.3%
Pack
Bulk 107.92 136.46 -20.9%
Retail/Institutional 40.11 45.60 -12.0%
Total Pack 148.03 182.06 -18.7%
Reprocessed -92.90 -104.67 11.2%
Pack from Fruit 55.13 77.38 -28.8%
Receipts & Losses
Net Gain or Loss -3.25 -1.25 -100+%
Imports – Foreign 124.70 109.31 14.1%
Domestic Receipts 5.09 8.16 -37.6%
Receipts of Florida Product 0.71 0.13 100+%
from Non-Reporting Entity 2.01 5.13 -60.8%
Chilled OJ used in FCOJ 0.39 1.60 -75.4%
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 356.92 436.32 -18.2%
Retail/Institutional 46.90 53.41 -12.2%
Total 403.81 489.73 -17.5%
MOVEMENT
Bulk 125.02 142.21 -12.1%
Domestic 35.67 29.23 22.0%
Exports 160.69 171.44 -6.3%
Total (Bulk)
Retail/Institutional
Domestic 39.63 45.94 -13.7%
Exports – – NC
Total (Retail/Inst) 39.63 45.94 -13.7%
Total Movement 200.33 217.39 -7.8%
ENDING INVENTORY
Bulk 196.22 264.87 -25.9%
Retail/Institutional 7.26 7.47 -2.7%
Ending Inventory 203.49 272.34 -25.3%

COFFEE
General Comments: New York and London both closed sharply lower on what appeared to be fund selling. The big move was a surprise for many traders and pushed the cash market into a quiet state. Buyers did not want to bid fearing even more moves lower and sellers are now losing too much money. Futures are now moving to major Support areas just underneath the closing values of yesterday. A lot of analysts say that the market needs to rally due to the reduced production this year and next. However, the current market tone and fundamentals suggest that there is Coffee around. The world cash market remains slow, with a lack of demand the primary problem. Prices are low for producers and differentials remain generally weak. Ideas are that Robusta supplies are tight once again, and London is holding a sideways trend. New York continues to show a generally sideways pattern, but closed at or just above resistance areas yesterday. Many participants are on the way to Seattle for the SCAA convention that is late this week and into the weekend.
Overnight News: Certified stocks are lower today and are about 1.405 million bags. The ICO composite price is now 128.75 ct/lb. Brazil will get showers today, then dry weather again. 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. ICE said that 294 notices were posted for delivery against May Contracts and that total deliveries for the month are 305 contracts.
Chart Trends: Trends in New York are down with objectives of 128.00 July. Support is at 134.00, 132.00, and 128.00 July, and resistance is at 138.00, 140.00 and 142.00 July. Trends in London are down with objectives of 2080 and 1990 July. Support is at 2110, 2100, and 2070 July, and resistance is at 2150, 2180, and 2210 July.

DJ Tanzania February Coffee Export Volume Drops From Prior Year, but Sales Value Rises
By George Mwangi
Special to DOW JONES NEWSWIRES
Tanzania’s coffee export volume fell 15% to 5,800 tons in February compared with 6,800 tons in February 2016, the Bank of Tanzania said.
The value of Tanzanian overseas coffee sales rose 1% to $17.9 million in February from $17.7 million a year earlier on reduced volumes that pushed up unit price 19% to $3,084.40 per ton, the bank said Friday in its monthly economic review for March, citing provisional data from the Tanzania Revenue Authority.
Global prices, however, for both Arabica and robusta coffee decreased in the year to February because of an increase in inventory and a favorable outlook for the 2017-18 season, the bank said.
Tanzanian arabica auctions use New York ICE futures prices as their benchmark, while robusta prices follow the London-traded contract on ICE.
Tanzania’s production of arabica and robusta coffee this season is expected to drop 20%, reflecting unfavorable weather and the natural biennial arabica cycle, in which a bumper harvest is followed by a smaller one, according to Primus Kimaryo, acting director-general of the Tanzania Coffee Board.
Tanzania–like most other East African coffee-growing nations–exports nearly all of its beans.

DJ Uganda’s March Coffee Exports Up 65% On Year
By Nicholas Bariyo
KAMPALA Uganda–Uganda’s March coffee exports rose 65% on the year as more newly planted trees entered the production phase, the state-run Uganda Coffee Development Authority said Friday.
Shipments from Africa’s top coffee bean exporter hit 409,916 60-kilogram bags, up from the 247,798 bags in the same month last season.
February shipments brought cumulative total exports to 2.25 million bags since the 2016-17 season started in October, a 35% increase from the corresponding period last season.
February’s export were the highest by volume since December as Uganda’s shipments rose for the fifth month in a row. The value of the country’s exports rose 69% to $273 million, boosted by higher volume and improved global prices.
Uganda, which mainly exports the bitter tasting robusta coffee variety used in blends and instant drinks, is benefiting from recovering prices amid concerns over supplies from Brazil and Asia.
After rising to five-and-half-year highs in January, robusta prices have largely remained flat in February and March due to strong shipments from Asian producers, according to the International Coffee Organization.
Higher prices are convincing Ugandan farmers to release some carryover stocks from last season, boosting exports, trade officials say.
Uganda’s 2016-17 coffee exports are projected to hit 3.8 million bags, from 3.32 million bags last season.

SUGAR
General Comments: New York and London closed lower. The daily charts show generally mixed trends and that the markets are both in trading ranges. New York closed near the bottom end of its trading range and acts weak. The EU has short stocks as does India, and prices have been firm in both areas. The EU said it was studying the idea of imports, but the Indian government has approved the import of Sugar with no duty. The amount authorized to import was at the low end of expectations at 500,000 tons. The government is also moving to impose price and volume controls to avoid hoarding. The Indian weather Service expects a normal monsoon this year and the government and producers hope for production to recover in a big way in the nest production cycle. The world situation would imply that production can recover after El Nino induced losses last year. 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 dry weather or light showers this week and showers this weekend. Temperatures should average above normal.
Chart Trends: Trends in New York are mixed. Support is at 1630, 1620, and 1620 July, and resistance is at 1700, 1720, and 1790 July. Trends in London are mixed. Support is at 467.00, 465.00, and 458.00 August, and resistance is at 480.00, 485.00, and 489.00 August.

COCOA
General Comments: Futures markets closed sharply lower and were lower all day. The Asian grind was improved, but the fear was that the North American data would be weak. The chart patterns imply that the market is oversold and in need of a recovery rally. However, perceived fundamentals remain bearish. Production is improved this year and demand has not improved as much as hoped, according to the recent EU grind data. The North American grind data will be released today and is expected to show an increase in Cocoa bean demand from last quarter and last year. The production this year could be a record in Ivory Coast and is above last year in Ghana. Both countries ar experiencing moderate weather as rains have returned. 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. The demand remains a question, with everyone expecting continued weaker demand in Europe. Ideas are that the US demand might be somewhat improved, but no one has real confidence in those ideas.
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 temperatures. ICE certified stocks are higher today at 5.093 million bags. ICE said that 434 contracts of Cocoa were delivered against May futures, and that total deliveries for the month are 434 contracts.
Chart Trends: Trends in New York are down with no objectives. Support is at 1740, 1710, and 1680 July, with resistance at 1830, 1880, and 1900 July. Trends in London are down with no objectives. Support is at 1360, 1330, and 1300 July, with resistance at 1460, 1520, and 1560 July.

DJ North America Cocoa Grindings Rise in First Quarter
By Julie Wernau
North America’s yen for the main ingredient in chocolate showed signs of a modest recovery Thursday as North American factories reported a bump to the number of cocoa beans processed in the first quarter.
North American cocoa processors reported a 1.2% increase in beans processed during the first quarter of 2017 from a year earlier, the highest first-quarter tonnage since 2015.
The 120,152 tons of cocoa beans processed by North American factories in the first quarter was also an increase over last quarter when 117,588 tons of beans were processed.
Skyrocketing cocoa bean prices in 2016 lowered demand for the key ingredient in chocolate in the last quarter of the year as consumers pushed back on consumption due to price increases across the industry. Analysts have been awaiting news of more buying now that prices are struggling at 10-year lows.
Thursday’s data were largely in line with analyst expectations and followed European processing volumes of raw cocoa beans. The tonnage rose 1.1% in the first quarter from a year earlier to 339,485 metric tons, falling below industry expectations, according to data released Tuesday by the European Cocoa Association.
Europe is the world’s largest consuming region for chocolate. While the increase in cocoa beans processed above last year, quarterly figures remain relatively flat and demand for cocoa has failed to recover to 2015 levels, when tonnage reached 342,442 tons in the fourth quarter.
The Cocoa Association of Asia also reported grindings Thursday at 177,450 tons, a 19% increase over the same quarter last year but a drop from the preceding quarter, when processing reached 188,493 tons.
Following a bull run for most of 2016, cocoa prices dropped sharply in the fourth quarter and have suffered further losses so far this year, with cocoa prices down at 10-year lows as of Thursday’s close.
The most actively traded contract, for July, ended down 4% at $1,799 a ton on the ICE Futures U.S. exchange on Thursday, before the data were released.
The quarterly data of cocoa beans processed into cocoa powder and other products are considered a barometer for chocolate demand.
Data were collected from 17 plants in Canada, the U.S. and Mexico, the same number as the previous year.
Companies that supplied data for the North American grindings report included Barry Callebaut AG, Blommer Chocolate Co., Hershey, Mars Inc., Nestle SA, Ghirardelli Chocolate Co., Cargill Inc. and Guittard Chocolate Co.

Asia’s 1Q Cocoa Grindings Rise 19.17 % to 177,450 Tons: CAA
2017-04-20 07:57:06.654 GMT
By Anuradha Raghu
(Bloomberg) — Processing rose from 148,911 metric tons in
same period in 2016, according to email from Singapore-based
Cocoa Association of Asia.
* Down 5.9% q/q from 188,493 tons in 4Q
* NOTE: Report covers grindings from Malaysia, and members in
Singapore and Indonesia
* NOTE: Survey est. 1Q grindings +10% y/y to 163,802 tons Link
* NOTE: European Cocoa Processing Rose 1.1% Y/y in 1Q, ECA

 

Questions? Ask Jack Scoville today at 312-264-4322

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