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

DJ World Food Prices Up 1.1% in February: FAO Index
By David Hodari
LONDON–World food prices rose in February, after three straight months of falls, as the prices among cereals and dairy products rose, the Food and Agriculture Organization of the United Nations said Thursday.
The FAO’s food-price index increased by 1.1% last month from January. Despite the early year rise, average food prices were still 2.7% lower than they were in the same month last year, the report said.
The cereal-price index climbed 2.5% from January, with prices “underpinned by a brisk trade activity and concerns over unfavourable weather adversely affecting the U.S. winter wheat and Argentina’s maize growing regions,” the U.N. body’s report said.
Dairy prices gained 6.2%, the FAO said, with strong import demand and lower-than-expected output from New Zealand partly responsible, the report said.
The price of vegetable oil slumped a further 3.1% on the month, hitting a 19-month low. Most vegetable-oil prices dropped given growing expectations of a global surplus this year. Higher-than-expected palm oil inventories in Malaysia and Indonesia also continued to weigh on prices, the report said.
Sugar prices were also weaker, dropping 3.4% on the month, hitting their lowest level in two years. Widespread expectations of production surpluses in Thailand and India added to concerns of gluts in Russia, China and the European Union.
Meat prices stayed the same from January, and were 5% lower on year, with more expensive bovine meat being balanced by cheaper poultry and pig-meat quotations.

COTTON
General Comments: Cotton was mostly higher, but May and July closed lower. The weakness cameo n less than expected export sales even though the sales were still strong. 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 dry weather into the middle of next 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 78.58 ct/lb. ICE said that certified stocks are now 104,279 bales, from 104,281 bales yesterday. ICE said that 0 notices were posted for delivery and that total deliveries for the month are now 589 contracts.
Chart Trends: Trends in Cotton are up with no objectives. Support is at 8100, 8080, and 8030 May, with resistance of 8350, 8440, and 8500 May.

DJ On-Call Cotton – Mar 1
As of Feb 23. 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.
Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Mar 18 0 2,895 -2,895 100 1,941 -1,841
May 18 33,641 33,128 513 3,512 2,329 1,183
Jul 18 42,853 41,548 1,305 4,449 4,494 -45
Oct 18 0 0 0 0 0 0
Dec 18 29,525 28,364 1,161 17,411 17,155 256
Mar 19 17,298 16,867 431 777 667 110
May 19 6,509 5,728 781 53 53 0
Jul 19 5,751 6,048 -297 639 617 22
Dec 19 4,710 4,644 66 7,275 7,144 131
Mar 20 1,471 1,471 0 146 146 0
May 18 66 66 0 0 0 0
Total 141,824 140,759 1,065 34,362 34,546 -184
Open Change
Int
Mar 18 240 13,204 -12,964
May 18 129,247 120,414 8,833
Jul 18 57,215 53,736 3,479
Oct 18 4 3 1
Dec 18 58,261 54,496 3,765
Mar 19 8,883 8,488 395
May 19 254 232 22
Jul 19 762 682 80
Dec 19 3,543 3,439 104
Mar 20 0 0 0
May 18 0 0 0
Total 258,409 254,694 3,715

FCOJ
General Comments: FCOJ was lower, with the biggest weakness seen in March despite no deliveries on First Notice Day. Futures remain in a trading range and Florida remain mostly warm and dry. Trends are 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. ICE said that 0 delivery notices were posted today against March Contracts and that total deliveries for the month are 0 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 139.00 and 131.00 May. Support is at 140.00, 138.00, and 136.00 May, with resistance at 146.00, 147.00, and 150.00 May.

COFFEE
General Comments Futures were higher in New York and in London yesterday, and daily trends are sideways in both markets. The funds remain very short. 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. Increased Vietnamese selling is being seen. 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 slightly lower today and are about 1.895 million bags. The ICO composite price is now 115.23 ct/lb. Brazil will get chances for showers through the weekend and will turn drier next week. Temperatures should be near to above normal through the weekend and near to below normal for the first half of next week. 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 1 notice was posted for delivery today and that total deliveries are the month are now 1,538 contracts. Vietnam exports are 656,145 tons so far this marketing year, from 703,000 tons in the previous year.
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 to down with objectives of 1700 and 1650 May. Support is at 1680, 1650, and 1620 May, and resistance is at 1750, 1790, and 1800 May.

SUGAR
General Comments: Futures were higher, and the market is now dealing with the idea that an important low could have een made in this market. Futures are back in sideways trends, but trends ould start to turn up by next week. If so, it could mean the end of the major bear market. Deliveries for the New York Raws contract featured Olam and Alveon on the buy side. The Sugar came from Brazil and Guatemala, and it was the lowest delivery amount in several cycles. 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 and Brazil are both selling into the world market. 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 will get chances for showers through the weekend and will turn drier next week. Temperatures should be near to above normal through the weekend and near to below normal for the first half of next week. ICE said that 14,618 contracts were posted for March delivery against Raw Sugar futures today.
Chart Trends: Trends in New York are mixed. Support is at 1340, 1320, and 1280 May, and resistance is at 1380, 1400, and 1440 May. Trends in London are mixed. Support is at 360.00, 355.00, and 353.00 May, and resistance is at 374.00, 376.00, and 380.00 May.

DJ ISO Raises 2017/18 Sugar Surplus Forecast at Record High
By David Hodari
LONDON–Global sugar production is expected to hit a record high this season, said the International Sugar Organization in its quarterly market report on Thursday.
In its quarterly assessment, the global sugar supply demand balance, the ISO said it expected production to increase 6% to hit 178.698 million tons, its highest-ever level “on the back of massive production gains projected for China, the EU and India, as well as record production in Thailand.”
Since the ISO released its previous quarterly report, raw sugar futures have remained in a low, narrow range due to continuing–even growing–expectations of huge inventories at the end of the season.
With production expected to rise by 10.5-million tons, consumption was not forecast to keep up, rising only 2.8-million tons, or 1.6%, on year.
As a result, global supplies are expected to swing from a 2.5-million ton deficit in 2016-17 to a 5.2-million ton surplus in 2017-18, the ISO said.
That large surplus is expected in spite of a significant production drop projected for Brazil, “where millers’ preference is swinging away from sugar to ethanol,” amid rising oil prices, the report said.
Nevertheless, prices are expected to remain weak, if not grow weaker.
“Since November 2016, the ISO has been emphasising that the 2017/18 fundamentals do not support world prices. The downward drift from above 20 cents/lb in January 2017 to the present level below 14 cents/lb is confirmation of this,” the report said.
“Our recent revision of global fundamentals indicates that the size of global surplus may be even slightly higher than was assumed at earlier stages of the season. Moreover, early indications point towards a high probability for this surplus phase to last one more season,” the ISO said.
World export availability, though, is not expected to rise significantly “due to some large stock rebuilding projected for several exporters,” the report added, noting an expected 372,000-ton increase on the previous season.
Raw sugar prices were last up 0.15% at 13.41 U.S. cents a pound.

COCOA
General Comments Futures closed higher in both markets. Ideas of increasing demand and less production supported the market. Most in the trade anticipate the increased demand, and current West Africa weather is hot enough and dry enough to create production concerns. 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 lower today at 4.542 million bags.ICE ssid that 5 delivery notices were posted today and that total deliveries for the month are now 525 contracts.
Chart Trends: Trends in New York are up with objectives of 2300 May. Support is at 2220, 2180, and 2170 May, with resistance at 2290, 2320, and 2340 May. Trends in London are up with no objectives. Support is at 1570, 1540, and 1520 May, with resistance at 1610, 1630, and 1650 May.

DJ CMAA Spot Cocoa Bean And Price Indications – Mar 1
Ex-dock or warehouse U.S. Eastern Seaboard North of Hatteras, in U.S. dollars
per metric ton. Settling price for February 23, 2018. All pricing is considered
nominal. Source: Cocoa Merchants Association of America.
N/A denotes not available.
Type Differential/ Price
Ratio
Main Crop Ghana, Grade 1 353 2,569.50
Main Crop Ivory Coast, Grade 1 245 2,462.00
Main Crop Nigerian, Grade 1 193 2,409.50
Ecuador 195 2,412.00
Sanchez f.a.q. NA
PPP Natural African Type Carton Cocoa Butter 2.98 6,595.58
Cocoa Press Cake – Natural 10/12% Butterfat 0.59 1,300.00
Questions? Ask Jack Scoville today at 312-264-4322

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Questions? Ask Jack Scoville today at 312-264-4322