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 as the buyers appeared once again to cover short cash market positions. 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 late this weekend. Temperatures should be above normal by the weekend. Texas will see mostly dry conditions. Temperatures will be warm through the weekend. The USDA average price is now 79.56 ct/lb. ICE said that certified stocks are now 48,067 ba1es, from 46,067 bales yesterday. USDA said that net Upland Cotton export saleswere 275,100 bales this year and 104,600 bales next yerar. Net Pima sales were 11,100 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 8000, 7940, and 7870 March, with resistance of 8400, 8460, and 8520 March.
General Comments: FCOJ closed higher as the trade assessed the potential for damage to crops from the current cold weather in Florida. Trends are up on the daily charts. There is no more cold weather in the forecast for Florida, although some readings in the upper 20’s F were seen overnight in some northern áreas for the second night in a row Any fruit damaged this week by a freeze will now be sent quickly to processors to be made into FCOJ. 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 prefoming 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 145.00 and 151.00 March. Support is at 137.00, 134.00, and 132.00 March, with resistance at 145.00, 148.00, and 150.00 March.
General Comments: Futures were lower in New York in response to the CONAB production estimatese, but higher in London. Chart trends remain 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. These ideas got support from CONAB as the estimate was higher than expected by the trade and was very much in line with many private estimates. CONAB is usually the low estimate in the crowd. 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 aznd exporters appear to be ewaiting 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 consier 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 higher today and are about 2.012 million bags. The ICO composite price is now 114.67 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 posible 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 1810, 1830, and 1850 March.
General Comments: Futures were lower again yesterday and trends are 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 tarriffs on US etanol 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 1290, 1260, and 1230 March, and resistance is at 1370, 1390, and 1410 March. Trends in London are down with no objectives. Support is at 352.00, 349.00, and 346.00 March, and resistance is at 367.00, 371.00, and 379.00 March.
General Comments: Futures closed slightly higher in New York and a little lower in London. New York broke through some major resistance on Wednesday and trends are up. It was a consolidation day yesterday as the world waited for the North American grind data. The data showed a lower grind and should be a negative surprise for the trade today. London is now at the upper end of its trading range. 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 gtrade 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 posible 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 seefrequent showers. Temperatures should average above normal. Brazil will get cry conditions and near to above normal temperaturas. ICE certified stocks are slightly lower today at 3.664 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 2010, 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.
DJ Cocoa Beans Ground Falls 1.3% in Latest Quarter — Commodity Comment
By Bowdeya Tweh
The quarterly Cocoa Grinds Report from the National Confectioners Association was released Thursday. Here’s what you need to know:
On Cocoa Beans:
The amount of cocoa beans ground in North America in the fourth quarter last year was 116,080 metric tons, down 1.3% from the prior year. The result was calculated using data from 17 plants, the same total as in 2016.
On Companies Included in the Survey:
The survey included Barry Callebaut, Guittard Chocolate Co., Blommer Chocolate Co., Hershey Co., Cargill Cocoa & Chocolate Co., Mars Wrigley Confectionery, ECOM Nestlé, and Ghirardelli Chocolate Co.
The next release is scheduled for April 19.
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. ©2018
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