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 sharply higher to limit up in early trading in reaction to the very strong export sales report. Some selling from producers and speculators took futures off the best levels of the day, but it was still a very firm close. The reports yesterday showed that world demand for Cotton is still very strong. Current buying is also 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 75.61 ct/lb. ICE said that certified stocks are now 66,341 bales, from 66,341 bales yesterday. USDA said yesterday that net weekly Upland Cotton export sales were 303,300 bales this year and 30,700 bales nerxt year. Net Pima sales were 9,500 bales this year and 1,300 bales next year.
Chart Trends: Trends in Cotton are mixed to down with objectives of 7500 March. Support is at 7820, 7650, and 7590 March, with resistance of 8000, 8100, and 8190 March.
DJ On-Call Cotton – Feb 1
As of Jan 26. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
*denotes changes from the previous week are based on revised data from
Call Previous Change Call Previous Change
Mar 18 28,905 38,366 -9,461 5,575 5,992 -417
May 18 37,222 35,825 1,397 1,151 1,243 -92
Jul 18 40,994 38,941 2,053 3,145 3,057 88
Oct 18 0 0 0 0 0 0
Dec 18 23,566 22,194 1,372 14,203 13,423 780
Mar 19 11,488 10,651 837 577 577 0
May 19 3,440 3,264 176 10 10 0
Jul 19 3,658 3,570 88 617 617 0
Dec 19 4,109 4,111 -2 6,403 6,229 174
Mar 20 1,273 1,273 0 146 146 0
Total 154,655 158,195 -3,540 31,827 31,294 533
Mar 18 152,384 169,881 -17,497
May 18 86,543 70,798 15,745
Jul 18 32,345 27,867 4,478
Oct 18 1 1 0
Dec 18 39,785 38,747 1,038
Mar 19 4,253 3,549 704
May 19 150 75 75
Jul 19 468 426 42
Dec 19 1,463 1,179 284
Mar 20 0 0 0
Total 317,392 312,523 4,869
General Comments: FCOJ was higher in nearby months, but lower in deferred months. Futures are now in a range and traders appear to be waiting for weather and production news. Production news will come the next week with a new round of USDA reports. Overall Florida production could be very close to the previous report at about 45 million boxes. 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, but it does not appear likely at this time that Florida will see freezing temperatures again. There has apparently been some minor damge from the freeze episodes earlier in the month The cold weather seen early in the month probably improved fruit quality for the majority of the production. 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 150.00, 153.00, and 156.00 March.
General Comments: Futures closed a little lower again even though the US Dollar moved lower. The Dollar is still likely to move lower against major currencies over time. The charts present a sideways appearance for now and speculators are still doing the selling. 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, so there is talk of big worldwide production. Producers in Brazil do think an adequate to good crop is possible, as rains in general have been timely. Vietnam production estimates are also high and could be at or above 27 million bags. 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 1.964 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.
General Comments: Futures were higher and prices held support area at the recent lows. A weaker US Dollar provided some reason to buy. 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. Surplus production estimates range to about 6.0 million tons. Mills in Brazil have decided to make more Ethanol as world Crude Oil and products prices have been very strong. Crude Oil is now starting to work a little lower in a correction trade. However, petroleum prices are expected to remain generally strong. Ideas are that these prices can continue strong as OPEC and Russia have agreed to keep production constrained compared to world demand. Petrobras 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 358.00, 363.00, and 365.00 March.
General Comments: Futures were higher and trends are turning up again in New York. The market is between harvests and is staging a post harvest recovery. 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 firm 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 lower today at 4.009 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 2100 and 2250 March. Support is at 1970, 1950, and 1930 March, with resistance at 2030, 2070, and 2080 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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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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