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 after trading lower in the first part of the day. It was an impressive recovery that appeared to start with comments by the new FED chairman that the economy was in good shape. The cash market fundamentals remain strong at this time. Demand has been strong and merchants have had trouble finding the Cotton in domestic cash markets. However, the on call short position held by merchants has been largely erased for now as merchants have become bigger buyers on the recent price break. Attention will shift to the May position and both May and July feature big on call positions that seem to be getting a little smaller. Prices overall have been much higher than most commercials had expected. Prices could remain strong until closer to harvest. There have also been quality concerns left over from the hurricanes and the freeze during the growing season.
Overnight News: The Delta and the Southeast will get precipitation starting the middle of this week. Temperatures should be on both sides of normal. Texas will see mostly dry conditions. Temperatures will be warm. The USDA average price is now 79.68 ct/lb. ICE said that certified stocks are now 103,640 bales, from 103,406 bales yesterday. ICE said that 12 notices were posted for delivery and that total deliveries for the month are now 589 contracts.
Chart Trends: Trends in Cotton are up with objectives of 8250 May. Support is at 8080, 8030, and 7920 May, with resistance of 8250, 8350, and 8440 May.
General Comments: FCOJ was a little lower one more time yesterday. The rally remains stalled as the weather has not been threatening in Florida or in Brazil. Trends are still up on the weekly charts, but sideways on the daily charts, and the market is still dealing with a short crop against weak demand. USDA estimated the crop at about 45 million boxes in its last report, and there does not seem to be any reason to expect a big production increase in its data for the marketing year. The current weather is good as temperatures are warm and it is mostly dry, 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 are showing fruit of good sizes, and producers are now into the Valencia crop with the early and mid harvest completed. Florida producers are actively harvesting and performing maintenance on land and trees. Some early flowering has been reported in the groves, and some fruit is forming. Irrigation is being used.
Overnight News: Florida should get mostly dry weather and warm temperatures. Cool temperatures are likely this weekend. Brazil should get scattered showers and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 139.00 and 131.00 May. Support is at 143.00, 140.00, and 138.00 May, with resistance at 147.00, 150.00, and 152.00 May.
General Comments Futures were a little lower in both markets, but both markets remain in a short-term trading range. Both markets are looking for news to cause a move in either direction. The funds remain very short, and now are adding to those positions. They anticipate big crops from Brazil and from Vietnam this year and think that buyers are well covered right now. Other speculators seem interested in buying, but have not found real good reasons to do so. New York traders are noting the good weather currently being reported in Brazil and expect another bumper crop. There were reports from London of increased Vietnamese selling, and prices are near the lows of the recent trading range. The Tet holiday is about over, so sales and offers should be on the increase. The situation seems little changed in Latin America. There are 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. Honduras has been a very active exporter and offers from most other countries are seen. Differentials in Central America are low.
Overnight News: Certified stocks are higher today and are about 1.896 million bags. The ICO composite price is now 113.30 ct/lb. Brazil will get daily chances for showers. 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. ICE said that 0 notices were posted for delivery today and that total deliveries are the month are now 1,535 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 118.00 May. Support is at 119.00, 116.00, and 113.00 May, and resistance is at 124.00, 126.00 and 128.00 May. Trends in London are mixed. Support is at 1730, 1720, and 1680 May, and resistance is at 1790, 1800, and 1830 May.
General Comments: Futures were lower, and short-term trends turned down on the daily charts. Trends are sideways on the weekly charts. Speculative selling remains the main feature of trade. Futures could drift in a sideways to lower pattern if no bullish news is found, and there is not any around right now. Ideas that Sugar supplies available to the market can increase in the short-term have been key to the selling. India will export up to 1.0 million tons of Sugar this year after being a net importer for the last couple of years. Ethanol demand continues strong, although Corn based ethanol has been cheaper and the choise for many buyers. Ideas are that petroleum prices can continue strong as OPEC and Russia have agreed to keep production constrained compared to world demand. Even so, there are ideas that world Sugar supplies are still enough to meet any demand.
Overnight News: Brazil should feature daily chances for showers. Temperatures should be near to above normal
Chart Trends: Trends in New York are down with objectives of 1290 and 1250 May. Support is at 1280, 1250, and 1220 May, and resistance is at 1320, 1340, and 1360 May. Trends in London are down with objectives of 350.00 and 341.00 May. Support is at 350.00, 347.00, and 344.00 May, and resistance is at 355.00, 356.00, and 360.00 May.
General Comments Futures closed higher again in New York and in London, and new highs for the move were made in both markets. Trends are up in both markets on the daily and weekly charts. It has been hot and dry in many parts of West Africa, but showers and more seasonal temperatures have been seen in the last week to improve overall production conditions. The gut slot for offers from the main crop is passing, and the sales by the government suggest that offers down the road can be less. The mid crop harvest is just a round the corner, and wire reports indicate that some initial mi crop harvest is underway in Nigeria. The recent grind data was weaker for North America, but positive for Europe and Asia. Demand is not universally strong, but has been improving and is likely to continue to improve as long as prices stay generally weak as processing margins are said to be very strong.
Overnight News: Scattered showers are expected in West Africa. Temperatures will average near to 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 a little higher today at 4.491 million bags.ICE ssid that 55 delivery notices were posted today and that total deliveries for the month are now 498 contracts.
Chart Trends: Trends in New York are up with objectives of 2250 and 2300 May. Support is at 2170, 2150, and 2140 May, with resistance at 2230, 2250, and 2290 May. Trends in London are up with no objectives. Support is at 1540, 1520, and 1510 May, with resistance at 1590, 1610, and 1630 May.
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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