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 higher in consolidation trading. The futures market is not showing much movement, and deliverable stocks have dropped to low levels. Trade attention is shifting to the USDA production reports next week and estimates of production losses due to hurricanes and cold weather. Reports that a couple of hundred thousand bales of Cotton could have been lost in West Texas due to freezing temperatures are thought now to be high-end estimates as almost all bolls are open. There were losses from the hurricanes, but only big enough losses that futures have held, not rallied sharply. Harvest conditions are good in just about all areas. The market hopes for increased US export demand, and demand has improved over the last few weeks.
Overnight News: The Delta and the Southeast should get light precipitation through Friday, then drier weather this weekend. Temperatures should average mostly above normal. Texas will see mostly dry conditions. Temperatures will be above too much above normal. The USDA average price is now 66.62 ct/lb. ICE said that certified stocks are now 1,711 bales, from 2,031 bales yesterday. USDA said that net Upland Cotton export sales were 209,500 bales this year and 47,100 bales next year. Net Pima sales were 19,100 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 6780, 6750, and 6690 December, with resistance of 6920, 7000, and 7020 December.
General Comments: FCOJ closed lower again and is now testing the lower end of the recent trading range. The market is shifting focus to the next crop production reports from USDA that will be released next week. The. USDA reports last month 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, but production has already been cut severely from last year and initial estimates for production this year, so how much additional loss needs to be calculated remains to be seen. USDA has had 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 some 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. Brazil should get mostly dry conditions and near to above normal temperatures. Some showers are possible this weekend. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 150.00, 146.00, and 142.00 January, with resistance at 158.00, 163.00, and 165.00 January.
General Comments: New York and London were lower, with London the leader as that market broke support and turned trends down on the daily charts. Much of the selling there was tied to liquidation on November Contracts before First Notice Day. The trade is waiting to see the precipitation and the crop condition in Brazil. The precipitation has been good in the last few days and reports from producers indicate that conditions for production have improved. Ideas that the coming Brazil crop could be big remain, even through Coffee areas have been 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 months. 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 lower today and are about 1.910 million bags. The ICO composite price is now 116.42 ct/lb. Brazil will get drier weather this week and more showers this weekend and early next week. 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 down with objectives of 120.00 and 116.00 December. Support is at 121.00, 119.00, and 116.00 December, and resistance is at 125.00, 128.00 and 130.00 December. Trends in London are down with objectives of 1820 and 1710 January. Support is at 1820, 1810, and 1770 January, and resistance is at 1880, 1900, and 1930 January.
General Comments: Futures were lower again on forecasts for improved growing weather in Brazil. Trends are still up on the daily charts. Weekly charts show trading ranges, but it could be that the extended sideways range is coming to an end. Traders remain generally bearish on ideas of strong world production and lackluster demand. There does not seem to be any big demand coming from any real direction, especially as China has cut back on imports and other demand seems to be more or less routine. 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 off and on for the next 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 1490, 1520, and 1530 March. Trends in London are up with objectives of 394.00 and 406.00 March. Support is at 380.00, 376.00, and 372.00 March, and resistance is at 393.00, 399.00, and 405.00 March.
General Comments: Futures closed higher. 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, but bullish traders have not been able to extend the gains so far this week. World production ideas remain high. Harvest reports show good to very good production will be seen this year in West Africa. 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 4.062 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 2160, 2210, and 2230 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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