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 lower and trends are down on the charts. Ideas of good crop progress and improving condition helped the selling interest. However, USDA showed lower condition ratings from a week ago, so a short term rally is possible starting today. The daily charts show that futures could be oversold and in need of a short covering rally, but it is possible now that the market is in an extended trend lower that could last at least through the rest of the year. The growing weather in the US is generally good and crop conditions are reported to be mostly good by producers and observers. Warmer temperatures have arrived to support development and there has been enough rain. Warmer and drier weather is expected this week in most production areas, and growing conditions should remain good. The US and maybe the world will produce much bigger crops this year. Monsoon rains are appearing in India and Pakistan and ideas of bigger production in that part of the world. On the other hand, China has been too dry
Overnight News: The Delta and Southeast should get a few showers today, and more precipitation late in the week. Temperatures should average near to above normal. Texas will see mostly dry weather until showers appear this weekend. Temperatures will be above normal. The USDA average price is now 67.72 ct/lb. ICE certified stocks are now 480,461 bales, from 478,113 bales yesterday.
Chart Trends: Trends in Cotton are down with no objectives. Support is at 7080, 7010, and 6950 July, with resistance of 7290, 7340, and 7560 July.
Date 18-Jun 11-Jun 2016 Avg
Cotton Planted 94 92 94 96
Cotton Squaring 22 15 21 20
Very Poor Poor Fair Good Very Good
Cotton This Week 1 5 33 51 10
Cotton Last Week 1 4 29 54 12
Cotton Last Year 1 7 38 45 9
General Comments: FCOJ closed lower last week on forecasts for more beneficial rains in Florida this week. There is a big storm in the Gulf of Mexico that looks likely to miss the state with any damaging winds, but it could provide a lot of rain to crops that could use it. Selling from producers has abated with the Valencia harvest coming to a close. It is hurricane season, and an above average year is expected in the Atlantic. Some systems have been forming in the Gulf of Mexico and Caribbean and one even formed off the coast of Africa, a rare occurrence for so early in the season. Florida weather has shown improvement as rains continue in the state. These rains have been very beneficial as the state had been in drought. There are no systems in the Atlantic to cause concern about tropical storm development that could be detrimental to trees and fruit. The demand side remains weak and there are plenty of supplies in the US. Brazil has been exporting FCOJ to the US to cover the short Florida crop. Domestic production remains very low due to the greening disease and drought. Trees now are showing fruit of varying sizes and overall conditions are called good because of the irrigation. The Valencia harvest is moving to processors and into the fresh market and is almost over. Brazil crops remain in mostly good condition.
Overnight News: Florida should get dry conditions or light showers, Brazil should get mostly dry conditions and near normal temperatures this week and a few showers this weekend.
Chart Trends: Trends in FCOJ are mixed. Support is at 138.00, 136.00, and 134.00 July, with resistance at 143.00, 145.00, and 148.00 July.
General Comments: New York was a little higher and London was a little lower in corrective trading. It was not a big moved day, and nothing really changed on the fundamental side or on the charts.. The New York market action remains weaker overall due to ideas of good supplies and reports of weak demand. These ideas were reinforced last week as the ICO projected adequate supplies for the coming year and the GCA showed record supply levels in the US. The cash market remains very slow with almost no interest seen from roasters as they see the big US supplies and think that prices will remain cheap. Offers remain in the cash market, and differentials are stable. Speculators and commercials are still mostly bearish. London had been strong as news surfaced that supplies in the cash market are tight due to reduced Vietnamese selling and tight supplies in the country. Offers are less and seen at high prices from Robusta countries such as Vietnam. Indonesia and Brazil are also very low on supplies. The Robusta market is still relatively strong compared to Arabica and due to the short supplies available to the market as it works to curb demand through the higher prices. The spread between the two markets is tight.
Overnight News: Certified stocks are lower today and are about 1.512 million bags. The ICO composite price is now 123.05 ct/lb. Brazil will get mostly dry weather. Temperatures should average near to above normal. Colombia should get scattered to isolated showers. Central America and southern Mexico should get scattered showers, with big storms today in southern Mexico. Temperatures should average near to above normal.
Chart Trends: Trends in New York are down with objectives of 120.00 and 115.00 July. Support is at 122.00, 119.00, and 116.00 July, and resistance is at 126.00, 129.00 and 134.00 July. Trends in London are up with objectives of 2145, 2165, and 2310 July. Support is at 2090, 2050, and 2030 July, and resistance is at 2140, 2150, and 2170 July.
General Comments: Futures in both London and New York were mixed, with nearby months finding some buying interest and deferred months trading lower all day. London weakened on spreads against New York. Frequent reports of increased supplies to the market keeps pressure on the prices. Production conditions have been better this year in Brazil, and a better harvest is anticipated in the next couple of months as the Sugarcane harvest moves to its peak. Production in India and Thailand is expected to improve in the coming year as both countries anticipate better monsoons than the failed monsoons of last year. It is raining in parts of India now as the monsoon arrived a few weeks ago. The Indian weather service estimates that the monsoon will be within the normal range. Thailand also hopes for an improved monsoon season this year and is getting rains now. China is still importing significantly less Sugar so far this year. The weather in Latin American countries away from Brazil appears to be mostly good. Most of Southeast Asia has had good rains and rains continue.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1340 and 1260 October. Support is at 1330, 1300, and 1270 October, and resistance is at 1400, 1440, and 1470 October. Trends in London are down with objectives of 375.00 October. Support is at 382.00, 379.00, and 376.00 October, and resistance is at 393.00, 397.00, and 403.00 October.
General Comments: Futures markets were lower yesterday and short term trends are down. However, this could be only a correction trade as the market acts like a bottom is foring for the longer term. Harvest activities in West Africa are completed. That means that there is less offer in the cash market as much of this Cocoa has already been sold. The demand from Europe is reported weak over all, and the North American demand has been weaker. However, chocolate prices are falling in Germany and should be falling in other parts of the world now to help move product and to get the market flowing again as input costs are much lower now. The next production cycle still appears to be big as the growing conditions around the world are generally very good. West Africa has seen much better rains this year and now getting warm and dry weather. Growing conditions are good. East African conditions are now called good. Good conditions are still being reported in Southeast Asia.
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 to above normal. Brazil will get mostly dry conditions or light showers and near to above normal temperatures. ICE certified stocks are a little higher today at 5.613 million bags. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are 0 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 1900 September. Support is at 1900, 1870, and 1840 September, with resistance at 1970, 2000, and 2040 September. Trends in London are mixed to down with objectives of 1500 September. Support is at 1520, 1500, and 1460 September, with resistance at 1600, 1620, and 1660 September.
DJ CMAA Spot Cocoa Bean And Price Indications – Jun 20
Ex-dock or warehouse U.S. Eastern Seaboard North of Hatteras, in U.S. dollars
per metric ton. Settling price for June 16, 2017. All pricing is considered
nominal. Source: Cocoa Merchants Association of America.
N/A denotes not available.
Type Differential/ Price
Main Crop Ghana, Grade 1 340 2,367.00
Main Crop Ivory Coast, Grade 1 250 2,278.00
Main Crop Nigerian, Grade 1 200 2,228.00
Ecuador 100 2,128.00
Sanchez f.a.q. NA NA
PPP Natural African Type Carton Cocoa Butter 2.60 5,272.80
Cocoa Press Cake – Natural 10/12% Butterfat NA NA
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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