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 a little lower on speculative selling as the market kept an eye on the direction of Hurricane Maria. The storm track for the new systems is away from the US. There will probably be some quality losses from the previous storms, and USDA did show deteriorating quality on Monday night. The charts suggest that futures can trade between 6500 and 7500 for a while. Production and yield estimates from USDA were much higher than expected and led to larger than expected ending stocks in the monthly updates last week. USDA was able to show increased production potential instead of a slight decrease that had been expected by much of the trade. Bolls are opening and big rains now could mean even further damage due to the open bolls.
Overnight News: The Delta and the Southeast should be mostly dry. Temperatures should average above normal. Texas will see mostly dry conditions this week and chances for showers this weekend. Temperatures will be above normal. The USDA average price is now 67.80 ct/lb. ICE said that certified stocks are now 2,414 bales, from 2,414 bales yesterday. USDA said that net Upland Cotton export sales were 219,900 bales this year and 37,100 bales next year. Net Pima sales were 58,500 bales this year and 19,700 bales next year.
Chart Trends: Trends in Cotton are mixed to down with no objectives. Support is at 6840, 6830, and 6750 December, with resistance of 7000, 7040, and 7120 December.
General Comments: : FCOJ closed higher again as Hurricane Maria continued to spin in the Atlantic. It is slated to hit Florida, but the threat is enough to cause prices to jump as there has already been a lot of damage to trees and fruit this year.. Ideas remain that the Orange groves are badly damaged in Florida due to Irma. Ideas are that at least 10% of the crop was lost. Both the daily and weekly charts are now showing up trends. Florida weather is now drier, but showers are still around, and the damage is done. The demand side remains weak and there are plenty of supplies in the US. Trees that are still alive now are showing fruit of good sizes, although many have lost a lot of the fruit. Brazil crops remain in mostly good condition and production estimates are climbing after recent rains.
Overnight News: Florida should get scattered showers and storms and near to above normal temperatures. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 delivery notices were posted against September contracts today and that total deliveries are 19 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 165.00 November. Support is at 151.00, 146.00, and 142.00 November, with resistance at 159.00, 160.00, and 165.00 November.
General Comments: New York and London closed higher before the CONAB estimates today.. Both markets remain in up trends for now. Some forecasts for some rain to develop in Brazil over the next couple of weeks was a reason to see increased selling yesterday. The weather in Brazil and the condition of the trees is an important market factor as La Nina is coming and Coffee areas are already dry. Early flowering has been reported in Brazil due to early rains, but it has turned dry again. Some producers are worried that the rains created premature flowering and that these flower will fall and hurt overall production potential. There are some reports that trees are defoliating and that would mean less production overall. This is usually a dry time, and most producers say they are not real concerned. But, the market has started to take notice. The cash market remains quiet. Production for the next crop is starting to be offered in Central America as the harvest has started in the region.
Overnight News: Certified stocks are higher today and are about 1.810 million bags. The ICO composite price is now 128.01 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. Temperatures should average near to above normal. ICE said that 0 notices were posted against September contracts today and that total deliveries for the month are now 884 contracts
Chart Trends: Trends in New York are mixed to up with objectives of 142.00 December. Support is at 135.00, 132.00, and 129.00 December, and resistance is at 139.00, 143.00 and 145.00 December. Trends in London are mixed to up with objectives of 2030 and 2090 November. Support is at 1960, 1920, and 1910 November, and resistance is at 2010, 2030, and 2060 November.
DJ Brazil Cuts Estimate for 2017 Total Coffee Harvest to 44.8 Million Bags
SÃO PAULO–Brazilian coffee farmers grew 44.8 million 132-pound bags of coffee in the 2017 season, crop agency Conab said Thursday, cutting its forecast from May.
Conab in May forecast a crop of 45.56 million bags of coffee for this year. In the 2016 season Brazil produced 51.4 million bags of coffee.
The country grew 34.1 million bags of the arabica variety of beans this year, down from 43.4 million bags last year, Conab said. Production of the robusta variety rose to 10.7 million bags from 8 million bags last year.
In May, Conab forecast 35.43 million bags of arabica and 10.13 million bags of robusta for 2017.
General Comments: Futures were higher in both New York and London on changes in the US Dollar and despite more forecasts for rains in Brazil production areas within the next week or two. The rains could help push yields at this time. Cash markets show weakening differentials between whites and raws. Weaker differentials imply either too much production or too little demand or both. Brazil mills are now processing more for ethanol than Sugar as the ethanol pays better and can get some better tax treatment in the country. Upside price potential is limited as there are still projections for a surplus in the world production, and these projections for the surplus seem to be getting bigger over time. Trends are turning up despite the big production and surplus projections. Production potential in Thailand seems strong as monsoon rains have been better than last year. It is raining in much of India now as the monsoon is active, and reports indicate good to heavy rains in many areas. The rest of Southeast Asia is seeing average to above average rains so far this year.
Overnight News: Brazil should feature warm and dry weather for the next week.
Chart Trends: Trends in New York are mixed. Support is at 1430, 1410, and 1380 March, and resistance is at 1490, 1520, and 1550 March. Trends in London are mixed. Support is at 364.00, 360.00, and 354.00 December, and resistance is at 374.00, 384.00, and 391.00 December.
General Comments: Futures closed higher. Both markets are back in a trading range, but New York acts firm. Harvest reports show good to very good production will be seen this year in West Africa. Cocoa is offered in all countries, although Ivory Coast has sold a big part of their expected production. Traders talk now of increased demand to go against big world production as prices are now attractive for grinders and chocolate manufacturers. Ivory Coast is expected to have a big crop starting harvest this Fall, but smaller than last year. Ghana also expects a good crop this year. Nigeria and Cameroon are reporting good yields on the initial harvest. The growing conditions in other parts of the world are generally good. East African could use more rain, but Cocoa is growing. Good conditions are still seen 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 lower today at 4.783 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2000, 1960, and 1920 December, with resistance at 2060, 2080, and 2100 December. Trends in London are mixed. Support is at 1460, 1450, and 1430 December, with resistance at 1500, 1520, and 1550 December.
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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