Jack Scoville
About The Author

Jack Scoville

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

COTTON
General Comments: Cotton was a little higher as the big speculative selling seen in the last few days started to dry up and as commercials used the current price break to fix some on call purchases. The weekly charts suggest that a bigger correction might be coming as futures could work lower in the short-term to find new demand. If so, the downside could be limited if the US Dollar keeps working lower. However, the charts suggest that prices could move to 7500 March before finding significant new buying. Current buying has been reflecting the fact that merchants need to buy futures to cover on call positions. There is plenty of Cotton here, 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.
Overnight News: The Delta and the Southeast will get precipitation this weekend. Temperatures should be on both sides of normal. Texas will see mostly dry conditions. Temperatures will be on both sides of normal. The USDA average price is now 74.70 ct/lb. ICE said that certified stocks are now 66,341 bales, from 66,341 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 7500 March. Support is at 7650, 7590, and 7490 March, with resistance of 7800, 7870, and 7940 March.

FCOJ
General Comments: FCOJ was a little higher in recovery trading. It is turning cold again in the US, and there are some fears that the cold weather could damage crops as the cold weather moves into the US over the next couple of weeks. The forecasts are mixed in this regard as the intensity of the cold snap is still highly variable in the weather forecasting models. There has apparently been some minor damge from the freeze episodes earlier in the month But, it will be colder in much of the country as a blocking ridge sets up in the ocean off the East Coast and is noted along the West Coast. The cold weather seen early in the month probably improved fruit quality for the majority of the production. The current weather is good as temperatures are warm 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. The Valencia harvest is well underway and the early to mid harvest is winding down. Florida producers are actively harvesting. Some early flowering has been reported in the groves. Processors mostly getting field run fruit.
Overnight News: Florida should get mostly dry weather and variable temperatures. Brazil should get scattered showers and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 144.00, 141.00, and 140.00 March, with resistance at 149.00, 150.00, and 153.00 March.

COFFEE
General Comments: Futures closed lower after trading both sides of unchanged. The Brazilian Real remains firm against the US Dollar, and the Dollar is still likely to move lower against major currencies over time. The charts present a sideways appearance for now and speculators remain very short and might want to reduce part of those positions. New York traders are noting the good weather currently being reported in Brazil and expect another bumper crop. Traders are also noting very good production in Vietnam this year. However, ideas of huge crops might now be part of the futures price and might not really be there as the weather in Brazil and other parts of Latin America has not been perfect. Producers there do think an adequate to good crop is possible, though, as rains in general have been timely. Reports from Vietnam have suggested that producers there are willing to wait through Tet for better prices before selling much. The situation seems little changed in Latin America. Differentials in Central America are weak.
Overnight News: Certified stocks are lower today and are about 1.965 million bags. The ICO composite price is now 115.04 ct/lb. Brazil will get drier weather. 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. Support is at 120.00, 118.00, and 113.00 March, and resistance is at 124.00, 126.00 and 128.00 March. Trends in London are mixed. Support is at 1730, 1700, and 1670 March, and resistance is at 1770, 1780, and 1790 March.

Global coffee exports rose 0.7 pct in Dec – ICO – Reuters News
31-Jan-2018 10:35:05 AM
LONDON, Jan 31 (Reuters) – Global coffee exports rose 0.7 percent in December from a year earlier to 10.62 million 60-kg bags, data from the International Coffee Organization (ICO) showed on Wednesday.
For the first three months of the 2017/18 season, which began on Oct. 1 last year, coffee exports fell 6.7 percent to total 28.36 million bags.
Arabica coffee exports in December were at 6.60 million bags, 1.7 percent lower than a year earlier.
Cumulative arabica exports for the season to date fell 4.0 percent to 18.66 million bags.
Robusta coffee exports rose 5.1 percent in December, from a year earlier, to 4.03 million bags.
Cumulative robusta exports for the season to date fell 11.5 percent to 9.70 million bags.
(Reporting by Nigel Hunt; Editing by Mark Potter)

DJ Ugandan Indicative Robusta Coffee Export Prices for Feb. 1
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 USDA, on Thursday.
Grade Nearby Prices
Screen 18 84.92 (85.51)
Screen 15 78.92 (79.51)
Screen 12 75.92 (76.51)*
*All prices are in U.S. cents for a pound of beans. Prices in brackets are the ones quoted by the USDA a week ago.
Nearby delivery means within 45 days. Prices include transport costs to the Kenyan port of Mombasa, but not shipping costs.

DJ Kenyan Arabica Coffee Prices Rise at Auction
By George Mwangi
NAIROBI–Kenyan arabica coffee prices rose by an average of 8.4% at this week’s auction, the Nairobi Coffee Exchange said Thursday.
The average price across all grades for the Jan. 31 auction was $259.37 for a 50-kilogram bag compared with $239.02 at the auction a week earlier.
The higher prices are generally attributable to better quality coffee beans arriving at the market from the Mount Kenya region, said Daniel Mbithi, chief executive of exchange. “It is anticipated this trend may persist in the next few sales.”
A total of 27,124 bags were offered for this week’s auction compared with 27,471 bags last week.
Mr. Mbithi said prices were higher due because of a resumption of sales following the year-end break. Buyers usually purchase more coffee after the break in order to meet their contracts. The auction was in recess from Dec. 13 until Jan. 9.
Below are prices in dollars for a 50-kilogram bag of arabica.
GRADE LOW HIGH WEIGHT AVG.PRICE PREVIOUS AVG.
AA 71 476 325,011 349.64 356.99
AB 31 480 825,642 269.84 236.76
C 54 289 307,219 200.20 173.69
E 181 181 133 96.41 N/A
PB 68 371 71,469 259.55 191.35
T 56 140 22,105 259.55 74.44
TT 66 249 19,385 184.02 217.25
UG N/A N/A N/A N/A N/A
UG1 31 138 28,364 95.84 92.93
UG2 43 130 17,721 70.59 59.89
UG3 N/A N/A N/A N/A N/A
Kenya’s arabica auctions use New York ICE futures prices as their benchmark. Almost all Kenyan arabica is sold at the Nairobi Coffee Exchange auction, although direct sales are allowed.

SUGAR
General Comments: Futures were lower and virtually erased the gains seen in the last couple of weeks. There was some talk of increased Brazil offers for the market due to the recent strength in the Real, but offers usually increase when the Real is weak. The overall feel of the market is that prices for now are cheap enough, but both New York and London appear to need a catalyst to work higher in a big way. Ideas that Sugar supplies available to the market can increase in the short-term have been key to the selling. Mills in Brazil have decided to make more Ethanol as world Crude Oil and products prices have been very strong. Ideas are that these prices can continue strong as OPEC and Russia have agreed to keep production constrained compared to world demand. Petrograd has cut gasoline prices twice this week, and this has been a negative factor for the ethanol production. India reports that it has a big crop and might export 1.0 million tons this year. The government is working on ways to make this happen.
Overnight News: Brazil should feature drier weather. Temperatures should be near to above normal
Chart Trends: Trends in New York are mixed to up with objectives of 1390 and 1440 March. Support is at 1320, 1300, and 1290 March, and resistance is at 1350, 1370, and 1390 March. Trends in London are mixed. Support is at 351.00, 349.00, and 346.00 March, and resistance is at 355.00, 358.00, and 363.00 March.

DJ Pakistan to Expand Sugar-Export Subsidy Program — Market Talk
0315 GMT – Pakistan is continuing to subsidize sugar exports as it tries to reduce large supplies, quadrupling the volume of product eligible for export breaks to 2 million tons, the USDA says. The possibility of increased imports won’t help sugar prices, which have been under pressure to start 2018. Exports were about 400,000 tons in the year through September. (lucy.craymer@wsj.com)

COCOA
General Comments: Futures were higher, but once again held the recent trading range. Traders are waiting for more news on the size of the crop, but this news might have to wait a while. Traders are also keeping an eye on the weather. Traders are worried about potential for the Harmattan winds to develop 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 is mostly hot and dry in many parts of West Africa, so conditions are good for the winds to form. Some crop losses might be possible if the current conditions persist even without the winds. Cocoa prices can hold in a sideways or up pattern until the mid crop is better defined and starts to move to the market.
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 4.025 million bags.
Chart Trends: Trends in New York are mixed. Support is at 1950, 1930, and 1900 March, with resistance at 2010, 2030, and 2070 March. Trends in London are mixed. Support is at 1370, 1350, and 1330 March, with resistance at 1440, 1450, and 1460 March.
Questions? Ask Jack Scoville today at 312-264-4322

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