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 higher on reports that a couple of hundred thousand bales of Cotton could have been lost in West Texas due to freezing temperatures. It was a positive day as traders factored in the potential weather related losses and also waited to see the effects of the indian governments move to increase support prices for Cotton producers. The moves in India are widely viewed as an attempt to shore up the farm vote by the ruling party as elections are coming next month. The Indian subsidies will be higher than trade expectations and ideas are that the US could see new demand due to higher Indian prices that will need to be charged now. A freeze in Texas could cause the loss of about half a million bales. Even so, production would be very large. USDA showed that bolls are now open and that the harvest i son an average pace. The harvest ahead seems to be the most important factor as USDA is expecting a huge crop. Bolls are opening and harvest is expanding under relatively good conditions as it has been relatively dry. Good harvest weather is expected this week.
Overnight News: The Delta and the Southeast should get light precipitation tomorrow through Friday, then drier weather this weekend. Temperatures should average mostly below normal through tomorrow, then above normal. Texas will see mostly dry conditions. Temperatures will be much below normal today, then above too much above normal. The USDA average price is now 67.10 ct/lb. ICE said that certified stocks are now 2,031 bales, from 2,031 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 6750, 6690, and 6670 December, with resistance of 6900, 7000, and 7020 December.
Date 29-Oct 22-Oct 2016 Avg
Cotton Bolls Opening 93 87 95 95
Cotton Harvested 46 37 45 45
Very Poor Fair Good Very Good
Cotton This Week 5 10 30 41 14
Cotton Last Week 5 9 30 42 14
Cotton Last Year 4 13 34 40 9
General Comments: FCOJ closed higher. The market has not been able to fill a gap left in reaction to Irma and the losses seen in Florida as a result of the devastating storm. Futures are still reacting to t the USDA reports that showed big production loss potential from the hurricane, but not the losses expected by the trade. USDA is expected by many to show further dramatic cuts in production in coming reports. USDA will have more time to do a more complete survey and it is expected that as USDA learns more about the damage it will be able to drop production estimates even more than it has. It should find that crops in many areas were almost completely destroyed. Other areas suffered losses of 50% or more of the crop. Some growers say that trees will be stressed again next year due to the winds and rains from Irma. 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. Florida producers are actively harvesting what is left. The emphasis is on the fresh fruit market now, with processors only getting packing house eliminations at this time. Brazil crops are stressed from hot and dry weather.
Overnight News: Florida should get dry weather and near normal temperatures. Some showers are possible on Sunday. Brazil should get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 150.00, 149.00, and 146.00 November, with resistance at 156.00, 159.00, and 160.00 November.
General Comments: New York and London were lower. The charts in New York show the chance for a doublé bottom, and the close on Friday might mean that the low is confirmed. London charts show that futures fell to a key support level yesterday. New York charts imply that further rallies are possible this week. The trade is waiting to see the precipitation and the crop condition in Brazil. The precipitation is expected to be light and might not help all that much. Ideas that the coming Brazil crop could be big remain, even through Coffee areas remain generally dry. Most areas will need to see some consistent rainfall now to keep the potential for a big crop alive as trees need to recover from stress from the production year last year and also the cold and dry Winter. However, the market might not have much concrete to work with until the cherries develop in coming mn=onths. The weather in Brazil and the condition of the trees is getting attention as La Nina is coming and Coffee areas are already dry.
Overnight News: Certified stocks are higher today and are about 1.911 million bags. The ICO composite price is now 119.50 ct/lb. Brazil will get drier weather this week and more showers this weekend. Temperatures should average near to below normal today and tomorrow, then 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.
Chart Trends: Trends in New York are mixed. Support is at 125.00, 123.00, and 121.00 December, and resistance is at 128.00, 130.00 and 133.00 December. Trends in London are mixed. Support is at 1980, 1970, and 1960 November, and resistance is at 2020, 2040, and 2060 November.
General Comments: Futures were higher as Brazil mills started to produce more ethanol. The market is holding as UNICA showed reduced production of Sugar as mills in Brazil decided to make more Ethanol. Trends are still sideways on the daily charts. Weekly charts also show trading ranges. Traders remain generally bearish on ideas of strong world production and lackluster demand. There was some talk of Far East demand that is now being filled by India and the Middle East due to higher prices from Thailand. But there does not seem to be any big demand coming from any real direction, especially as China has cut back on imports. The fundamental side of the market remains mostly negative due to ideas of big world production. Brazil has turned dry after recent rains, and more rain is needed after the dry Winter. Some showers could appear early this week. 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 bigger.
Overnight News: Brazil should feature dry conditions this week and scattered showers this weekend. Temperatures should be near to below normal today and tomorrow, then near to above normal
Chart Trends: Trends in New York are mixed to up with objectives of 1510, 1530, and 1560 March. Support is at 1430, 1400, and 1380 March, and resistance is at 1470, 1490, and 1520 March. Trends in London are mixed to up with objectives of 389.00 and 403.00 December. Support is at 375.00, 368.00, and 366.00 December, and resistance is at 384.00, 391.00, and 3404.00 December.
General Comments: Futures closed lower. The market appears ready for a small correction at this time. The trends are still mostly up in New York and in London on both the daily and weekly charts. World production ideas remain high. Harvest reports show good to very good production will be seen this year in West Africa. Ghana and Ivory Coast expects a very good crop this year. Nigeria and Cameroon are reporting good yields on the initial harvest, and also good quality. The growing conditions in other parts of the world are generally good. East Africa is getting better rains now along with cooler temperatures. Good conditions are still seen in Southeast Asia. Traders talk of increased demand to go against big world production as prices are now attractive for grinders and chocolate manufacturers.
Overnight News: A few isolated showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see mostly dry conditions. Temperatures should average above normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 4.102 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 2220, 2280, and 2370 December. Support is at 2070, 2030, and 2000 December, with resistance at 2130, 2160, and 2210 December. Trends in London are mixed. Support is at 1530, 1520, and 1480 December, with resistance at 1600, 1610, and 1630 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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