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 futures closed near the low-end of the recent trading range. Chart patterns imply that further weakness is coming, although real prices moves might have to wait until the USDA reports are released tomorrow. Speculators were the best sellers, and some were reducing long positions before the reports and then before December goes into delivery later in the month. Trade estimates of production losses due to hurricanes and cold weather will be compared to the USDA data. Reports that Cotton could have been lost in West Texas due to freezing temperatures are thought to be fairly minimal. 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 Wednesday, then drier weather through this weekend. Temperatures should be on both sides of normal. Texas will see mostly dry conditions after some light precipitation today. Temperatures will be on both sides of normal. The USDA average price is now 66.51 ct/lb. ICE said that certified stocks are now 39,322 bales, from 34,322 bales yesterday.
Chart Trends: Trends in Cotton are mixed to down with objectives of 6580 December. Support is at 6780, 6750, and 6690 December, with resistance of 6920, 7000, and 7020 December.
Wire: Bloomberg News (BN) Date: Nov 6 2017 13:10:00
Cotton Production, Inventory Survey Before USDA WASDE Report
By Dominic Carey
(Bloomberg) — The following table shows results of a Bloomberg News survey
of as many as nine analysts for the USDA’s World Agricultural Supply and Demand
report on the 2017-18 cotton crop, which is scheduled for release at noon in
Washington on Nov. 9. Figures are in millions of bales.
|——Survey Results——|USDA Priors
2017-18:| Avg | Low | High | Oct. | 2016-17
US Production | 20.9| 20.1| 21.5| 21.1| 17.2
US Exports | 14.5| 14.2| 15.0| 14.5| 14.9
US End Stocks | 5.6| 5.3| 6.1| 5.8| 2.8
World Production | 120.3| 118.5| 121.4| 120.9| 106.6
World Consumption| 118.2| 117.8| 119.0| 118.0| 113.7
World End Stocks | 91.6| 89.0| 92.4| 92.4| 89.6
Analyst |————U.S.————| ——World—-
| | | End | | | End
Estimates: |Production |Exports |Stocks |Production |Consumption |Stocks
Cottonexperts.com | 20.6| 14.5| 5.3| 118.5| 119.0| 89.0
Doane | 21.0| 14.8| 5.5| 120.0| 118.5| 91.0
Love Consulting | 20.8| 14.5| 5.5| 120.5| 118.0| 92.1
Price Futures Group| 20.9| 14.5| 5.5|n/a |n/a |n/a
Rabobank | 21.1| 14.2| 6.1| 120.5| 118.0| 91.8
Rose Consulting | 21.5| 15.0| 5.9| 121.4| 118.6| 92.3
Texas A&M; Robinson| 21.1| 14.5| 5.8| 120.9| 118.0| 92.4
Varner Bros. | 20.1| 14.5| 5.4| 120.3| 118.0| 91.9
Wedbush Securities | 21.0| 14.3| 5.7| 120.5| 117.8| 92.2
SOURCE: Bloomberg News
General Comments: FCOJ closed narrowly mixed as the market waits for the USDA production reports on Thursday. Ideas are that USDA can show another significant drop in Oranges production in Florida. 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. The demand side remains weak.
Overnight News: Florida should get dry weather and near to above 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 to up with objectives of 163.00, 166.00, and 171.00 January. Support is at 157.00, 155.00, and 152.00 January, with resistance at 163.00, 165.00, and 166.00 January.
Wire: Bloomberg News (BN) Date: Nov 6 2017 13:45:00
Florida Orange Production Survey Before USDA’s Citrus Report
By Dominic Carey
(Bloomberg) — The following table shows results of a
Bloomberg News survey of three analysts about the 2017-18
Florida orange crop. The USDA will release their estimate at
noon in Washington on Nov. 9. Figures are in millions of 90-lb
Summary of Results: | Output
Survey Avg | 48.3
Survey Range | 35-58
USDA Oct. Estimate | 54.0
USDA 2016-17 Crop | 68.75
Price Futures Group | 52.0
Optionsellers.com | 58.0
Infinity Trading | 35.0
SOURCE: Bloomberg News
General Comments: New York and London were lower on ideas that there is plenty of Coffee available despite reduced offers from Brazil and on reports of little damage to crops from the typhoon that hit Vietnam over the weekend. Ideas are that the funds and industry need to buy in New York, but Arqabica demand is tepid and differentials bids remain weak. Europe is paying better than the US, but differentials overall are not strong. Ideas that the coming Brazil crop could be big remain, even through Coffee areas have seen stress until recently. 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 1.905 million bags. The ICO composite price is now 117.36 ct/lb. Brazil will get drier weather today and more showers late this week and 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 122.00, 121.00, and 119.00 December, and resistance is at 128.00, 130.00 and 133.00 December. Trends in London are down with objectives of 1710 January. Support is at 1800, 1770, and 1740 January, and resistance is at 1850, 1880, and 1900 January.
DJ Correct: ECF Data Glut Reveals Falling European Coffee Stocks
By David Hodari
LONDON– European coffee stocks slightly fell in the four months to the end of September, the European Coffee Federation said Tuesday.
In a glut of data–ECF port figures are often released two months at a time–the numbers reveal that stocks rose for a third consecutive month in June, by 2,795 tons (0.4%).
That, though, preceded sharper falls in the ensuing three months, with stocks falling 1.6% in July, 0.54% in August, and 1.8% in September.
Total beans in five major European coffee ports fell from 706,047 tons at the end of May to 681,458 tons at the end of September.
The ECF tracks stocks in Antwerp, Hamburg, Genoa, Le Havre and Trieste.
Of those five ports, the data revealed falls at Antwerp and Hamburg–which account for the two largest stocks of coffee–as well as Trieste, the fourth largest.
Antwerp stocks fell by 1.9%, Hamburg fell by 18.2%–the sharpest fall–and Trieste’s inventory slipped by 2.7%, the ECF said.
As for the other two ports, coffee inventories at Genoa rose by 2.4%, while Le Havre stocks rose 24.9%, although remained the lowest of the five ports.
The body previously also tracked Bremen, but ceased doing so at the end of January after a 14-month period during which figures for the port were unavailable.
With Bremen’s last-known 103,706 tons subtracted from the ECF’s total for January, official stocks fell in that month. Excluding Bremen, the total from the other five ports rose for eight consecutive months to July.
London-traded robusta futures were last down 2.31% at $1,859.00 a ton and New York-traded arabica beans were down 1.27% at $1.24 a pound.
DJ ICO Price Metric Falls Again in October on Arabica Weakness
By David Hodari
LONDON–The International Coffee Organization’s composite indicator price fell during October, with prices an average of 2.9% lower in a month of falling prices.
That decrease saw the ICO composite indicator drop to 120.01 U.S. cents a pound from 124.46 U.S. cents in September. That drop took the metric to its lowest since May 2016.
“Coffee prices have drifted downwards since the end of August 2017, though prices in October were fairly stable with a drop at the end of the month,” the report said.
All three groups of premium-grade arabica beans saw price drops despite small gains in October’s first week, with Colombian mild down 4.8%, other mild down 4% and Brazilian mild down 3.9%.
Robusta prices fell less sharply than arabica beans, ticking down just 0.8% overall in the month. The arbitrage between the low-grade bean and its higher quality peer fell by 7.9% after three months of increases, the reported.
While last month’s report charted a fall in the ICO index for the final month of the 2016/17 season, the October report noted that total exports from countries of origin reached 122.45 million bags–up 4.8% on the previous season.
Stronger-than-expected production out of Honduras and rebounding Brazilian yields were partly behind that increase, the ICO said.
In addition to that, a 5.5% increase in exports from Vietnam and a 3.5% increase in Colombian exports also had a hand in growing inventory during the 2016/17 season, the report said.
London-traded robusta was last 0.21% down at $1,867.00 a ton, while arabica was down 0.8% at $1.25 a pound.
General Comments: Futures were higher again for technical reasons as funds were said to be the main buyers. Trends are turning up in London and should turn up in New York today. The market was able to move higher despite news that the ISO was once again looking for more production than 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, but the reduced Brazil output seems to be offsetting the demand concerns at this time. The fundamental side of the market remains mostly negative due to ideas of big world production. 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 today and scattered showers late this week and 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. 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 377.00, 374.00, and 370.00 March, and resistance is at 393.00, 399.00, and 403.00 March.
DJ World Sugar Output to Rise in 2017-2018 — Market Talk
0758 ET – World sugar production will rise to 179.3 million metric tons in the 2017-2018 growing season, according to Jose Orive, executive director of the International Sugar Organization. That would be an increase of 11.5 million tons from 2016-2017, Orive said during a conference in Sao Paulo. Sugar consumption will increase 1.77% in the 2017-2018 season from the previous season to 174.7 million tons, Orive said. (firstname.lastname@example.org)
General Comments: Futures closed higher and trends are now up in New York. London trends could turn up with follow through buying today. The market has been in a uptrend since August and held the uptrend line in the last few sessions. 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 3.982 million bags.
Chart Trends: Trends in New York are up with objectives of 2220, 2280, and 2370 December. Support is at 2150, 2120, and 2100 December, with resistance at 2210, 2230, and 2260 December. Trends in London are mixed to up with objectives of 1620 December. Support is at 1560, 1530, and 1520 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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