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 was limit down in July and lower in the new crop months. The charts imply that the current up move is fast coming to an end. It will be up to the buy side of the market to push futures higher, and the buyers might have problems doing so as the rally has brought Cotton into the cash market and also into certified stocks. The market anticipates continued good demand for the current crop. Futures are finding support from mills who sold basis levels but never covered these positions in futures. They are being squeezed now, but wire reports suggest that they are3 finding ways to get covered. USDA on Wednesday showed a sharp year on year increase in production due to higher planted area. Demand estimates showed stable trends, so ending stocks for the coming crop were high. Planting conditions remain mixed due to recent cold and wet weather. Warmer temperatures and more wet weather is expected this week. The overall planting pace was good last week, but the annual planting pace is still behind the five year average. Certified stocks have moved sharply higher in the last month as an indication of increased farm selling and somewhat reduced overall demand.
Overnight News: The Delta and Southeast should get more rain this weekend. Temperatures should will average near to above normal. Texas will see mostly dry weather. Temperatures will be above normal. The USDA average price is now 78.59 ct/lb. ICE certified stocks are now 384,842 bales, from 374,699 bales yesterday. ICE said that 0 contracts were tendered for delivery for May and that total deliveries for the month are now 735 contracts.
Chart Trends: Trends in Cotton are up with no objectives. Support is at 8080, 8020, and 7970 July, with resistance of 8250, 8360, and 8480 July.
General Comments: FCOJ closed lower and price action remains weak. The daily chart are starting to show a down trend again, but futures are holding above the lows of last week. The crop is still small, but does not appear to be getting smaller as USDA showed a slight increase in Florida production and IBGE showed an increase in Brazil production in reports released Wednesday. Weak domestic demand is helping keep prices under pressure, as are the expectations of increased imports of FCOJ from Brazil. Domestic production remains very low due to the greening disease and drought. Trees now are showing small fruit. Irrigation is being heavily used to prevent loss as the state is in drought and there are no forecasts for rain for the next week. The Valencia harvest is moving to processors and into the fresh market and is starting to wind down. Brazil crops remain in mostly good condition.
Overnight News: Florida should see mostly dry weather and near to above normal temperatures, Brazil should get mostly dry conditions and near normal temperatures. ICE said that 0 contracts were tendered for May delivery today and that total deliveries for the month are now 26 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 135.00 July. Support is at 142.00, 139.00, and 136.00 May, with resistance at 148.00, 150.00, and 153.00 May.
General Comments: New York and London closed lower on what appeared to be fund selling. The US Dollar was weaker once again against other currencies including the Real, but prices moved lower anyway on ideas of weak demand and increasing supplies. Ideas of better world production were seen once again as many look for stronger crops with coming harvests, and demand ideas remain very soft as most roasters are still not buying much in world cash markets. The overall price action shows that both markets are still in a range trade as the market waits for the increased offer from Brazil to hit the market, but price action is weak and trends are turning down. The big shorts in New York are the commercials who apparently are finally closing short positions at least in part as they close positions on Coffee bought at higher prices. It feels as if some news is needed or increased offers in the cash market are needed to push prices lower. Differentials are stable.
Overnight News: Certified stocks are higher today and are about 1.437 million bags. The ICO composite price is now 124.03 ct/lb. Brazil will get light showers early this week and showers and storms this weekend. Dry weather returns next week 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 1 notice was posted for delivery against May contracts and that total deliveries for the month are 666 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 128.00 July. Support is at 131.00, 128.00, and 125.00 July, and resistance is at 135.00, 138.00 and 140.00 July. Trends in London are down with objectives of 1920 and 1860 July. Support is at 1940, 1900, and 1870 July, and resistance is at 2010, 2040, and 2070 July.
General Comments: New York and London both closed higher in response to the weaker US Dollar. New York is holding a trading range, but is now pressing against the top end of the range and could break through today. London broke support from its trading range Monday and climbed back into the range yesterday. Ideas are that world Sugar production will be higher as long as Brazil keeps the current percentages of Sugar and Ethanol production. Ideas are also that India and Thailand will have bigger crops this year after the failed monsoon cut Sugarcane production in both countries last year. The Indian weather Service expects a 96% normal monsoon this year and the government and producers hope for production to recover in a big way in the next production cycle. Brazil could also have better crops this year as rains have been good in Center South áreas. It remains much drier than normal in the Northeast, but there has been some rain. Southeast Asia has good growing conditions.
Overnight News: Brazil will get a few showers this week and big rains this weekend. Temperatures should average near to below normal.
Chart Trends: Trends in New York are mixed. Support is at 1550, 1530, and 1500 July, and resistance is at 1600, 1630, and 1650 July. Trends in London are mixed. Support is at 439.00, 437.00, and 434.00 August, and resistance is at 454.00, 458.00, and 463.00 August.
General Comments: Cocoa futures closed a little lower in consolidation trading. Both New York and London gapped higher and indicated that the market is strong. The recovery has come as the West African main crop harvest has ended and the mid crop harvest has started. It has also come as Ivory Coast soldiers have rated against the government in search of higher pay. The mutiny is fading now, and prices have also faded a bit. That makes less supply available to the market, although supplies should still be big enough for any demand at this time. The recovery in demand has been weak so far, but demand is expected to continue to grow in the next few months. Traders look for demand to improve as lower prices filter down to the retail level, but chocolate prices have been holding strong at stores. The fundamentals remain mostly bearish, but are now part of the price. Production is improved this year and demand has not improved as much as hoped, according to the recent EU grind data.
Overnight News: Scattered showers and storms 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 sharply higher today at 5.690 million bags. ICE said that 0 contracts of Cocoa were delivered against May futures, and that total deliveries for the month are 591 contracts.
Chart Trends: Trends in New York are up with objectives of 2150 July. Support is at 1980, 1960, and 1940 July, with resistance at 2070, 2100, and 2130 July. Trends in London are up with objectives of 1710 Juy. Support is at 1540, 1520, and 1490 July, with resistance at 1630, 1650, and 1670 July.
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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