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. Trends remain up and the tone of the market remains positive. Current buying is reflecting the fact that merchants need to buy futures to cover on call positions Rather than the overall fundamentals presented in the USDA reports last week. The reports showed that there is plenty of Cotton here and around the world, but getting it out of producers hands has been difficult and prices have been much higher than most commercials had expected. Commercials are being forced now to buy Cotton at higher levels to cover the big on call position of unpriced Cotton that they have contracted for. Trends are still up. The hurricanes and the freeze appear to have really damaged quality and the quality losses have forced mills and exporters to pay up for better quality Cotton. Producers remain limited sellers at best.
Overnight News: The Delta and the Southeast will get precipitation today and late this weekend. Temperatures should be below normal today and above normal by the weekend. Texas will see mostly dry conditions. Temperatures will be warm through the weekend. The USDA average price is now 79.03 ct/lb. ICE said that certified stocks are now 48,067 bales, from 46,110 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 8000, 7940, and 7870 March, with resistance of 8280, 8400, and 8460 March.
General Comments: FCOJ closed a little lower in consolidation trading. Trends are up on the daily charts due to strong buying seen on Tuesday. There is no cold weather in the forecast for Florida, although some readings in the upper 20’s F were seen overnight in some northern areas. The current weather is good as temperatures are turning warmer and there is little rain around, but the crop is small. The harvest is progressing well and fruit is being delivered to processors and the fresh fruit packers. Trees in Florida 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 and performing maintenance on land and trees. Processors mostly getting field run fruit.
Overnight News: Florida should get mostly dry weather and above normal temperatures. Brazil should get scattered showers and near to above normal temperatures. ICE said that no January deliveries were posted yesterday and that total deliveries for the month are now 140 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 141.00, 145.00, and 151.00 March. Support is at 137.00, 134.00, and 132.00 March, with resistance at 141.00, 145.00, and 148.00 March.
General Comments: Futures were higher in New York and in London yesterday, and chart trends turned up in London on the daily charts. New York is still mostly in down trends. New York traders are noting the good weather currently being reported in Brazil and expect another bumper crop. Meanwhile, London has broken out higher on short covering from speculators and some industry buying. Internal prices in Vietnam remain at high levels compared to London and producers and exporters appear to be waiting to see if the market can rally further. The price action yesterday suggests that the Vietnamese sellers might be rewarded for the patience, but they might consider fixing differentials now if the differentials are holding strong. The situation seems little changed in Latin America. Brazil exports are reduced at about 2.9 million bags in the latest report on what is called reduced inventories held by exporters and producers. Many are concerned about the potential for reduced Brazil production due to earlier drought and the cold and dry Winter. There is plenty of rain in some areas now and the good weather now has caused a lot of speculative and some commercial selling. There are also reports of short crops in parts of Central America and some areas in South America due to the lack of farmer investment from the low prices. However, Honduras has been a very active exporter and appears to be in position to make up the difference in exports from reduced offers in the rest of Central America and Colombia. Differentials in Central America are low.
Overnight News: Certified stocks are little changed today and are about 2.006 million bags. The ICO composite price is now 115.41 ct/lb. Brazil will get light showers each day with best amounts and coverage expected over the weekend. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get isolated showers or dry conditions. Vietnam will get mostly dry weather, but some storms are possible in the far south. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 116.00 March. Support is at 120.00, 118.00, and 113.00 March, and resistance is at 126.00, 128.00 and 130.00 March. Trends in London are up with objectives of 1840 and 1940 March. Support is at 1730, 1700, and 1670 March, and resistance is at 1770, 1780, and 1810 March.
DJ Brazil Forecasts 2018 Total Coffee Harvest of 54.4M-58.5M Bags
By Jeffrey T. Lewis
SAO PAULO–Brazilian farmers will produce a bumper crop of coffee in 2018, thanks to increasing productivity and good weather conditions, the country’s agriculture agency said Thursday.
The agency, known as Conab, forecast a total crop in a range of 54.4 million to 58.5 million 132-pound bags. The harvest of the arabica variety of beans will be in a range of 41.7 million to 44.6 million bags, and the robusta crop will be in a range of 12.7 million to 14 million bags, Conab said. The numbers don’t add up because of rounding.
Brazil produced about 45 million bags of coffee in 2017, according to Conab, with 34.2 million bags of arabica and 10.7 million bags of robusta.
Production of arabica coffee in Brazil is strongly affected by a two-year cycle in which a bigger crop is produced in even-numbered years, followed by a smaller crop in odd-numbered years as the plants “rest.”
Production of robusta coffee is recovering after the end of a drought that hit the state of Espirito Santo, source of most of Brazil’s production of the variety.
Brazil is the world’s biggest producer and exporter of coffee.
DJ Ugandan Indicative Robusta Coffee Export Prices for Jan. 18
By Nicholas Bariyo
KAMPALA, Uganda–Below are the indicative cash export prices for Ugandan robusta coffee as provided by the Uganda Coffee Development Authority, or UCDA, on Thursday.
Grade Nearby Prices
Screen 18 86.24 (83.29)
Screen 15 80.24 (77.29)
Screen 12 77.24 (75.29)
*All prices are in U.S. cents for a pound of beans. Prices in brackets are the ones quoted by the UCDA a week ago.
Nearby delivery means within 45 days. Prices include transport costs to the Kenyan port of Mombasa, but not shipping costs.
General Comments: Futures were lower again yesterday and trends are sideways to down on the daily and weekly charts. Futures are now at or near contract lows in New York and also in London. Ideas that Sugar supplies available to the market can increase in the short-term have been key to the selling this week. Brazil is considering the end of import tariffs on US ethanol and this has triggered selling in Sugar as more cane can now be processed into sweetener. Price action had been strong due to the strong demand for ethanol that has diverted some Brazil mill production away from Sugar. However, prices fell apart on forecasts for excessive production from the ISO and from private analytical firms. Mills in Brazil have decided to make more Ethanol as world Crude Oil and products prices have been very strong. Ideas are that petroleum prices can continue strong as OPEC and Russia have agreed to keep production constrained compared to world demand.
Overnight News: Brazil should feature light showers each day. Temperatures should be near to above normal
Chart Trends: Trends in New York are down with objectives of 1260 March. Support is at 1320, 1290, and 1260 March, and resistance is at 1370, 1390, and 1410 March. Trends in London are down with no objectives. Support is at 358.00, 355.00, and 352.00 March, and resistance is at 367.00, 371.00, and 379.00 March.
General Comments: Futures closed higher in New York and in London. New York broke through some major resistance yesterday and might have complete dan impressive bottom on the charts. London is now at the upper end of its trading range and could follow New York higher today. The West African main harvest has started to wind down and focus is shifting to the next round of grind data and the weather for the West African midcrop. Ideas are that Cocoa demand from grinders can be strong this quarter due to the weaker prices, and the EUJ grind announced last week was very strong and well above grade expectations. The market is also on alert for the Harmattan winds that can suck moisture from the soil and trees and really hurt bean quality and production. These winds have not developed as of yet, but could at any time. It has become hot and dry in many parts of West Africa, so conditions are very good for the winds to form. Some crop losses might be possible if the current conditions persist even without the winds. Arrivals in West Africa remain behind year ago levels when they were expected to be above year ago levels.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get cry conditions and near to above normal temperatures. ICE certified stocks are higher today at 3.665 million bags.
Chart Trends: Trends in New York are up with objectives of 2100 and 2250 March. Support is at 1950, 1900, and 1870 March, with resistance at 2000, 2030, and 2070 March. Trends in London are mixed. Support is at 1370, 1330, and 1320 March, with resistance at 1440, 1450, and 1460 March.
Questions? Ask Jack Scoville today at 312-264-4322
A Subsidiary of Price Holdings, Inc. – a Diversified Financial Services Firm. Member NIBA, NFA
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. ©2018