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 lower after an early push higher. Bullish traders could not take out resistance near the 8400 May level in New York. The weak close implies that the market will take a new leg down in the next week or so. It has turned drier in the Delta and Texas after some big rains, and drier weather will be seen in the Southeast once the latest storm moves out, or so producers hope. Demand has been strong and merchants have had trouble finding the Cotton in domestic cash markets. Export sales have been very strong and above many trade expectations at the beginning of the marketing year. Prices overall have been much higher than most commercials had expected, but the carry spread weakness could be a sign that merchants have been able to get covered in the last couple of weeks. Prices could remain strong until closer to harvest, but there is a chance that the highs have been seen. The market expects increased plantings in the western Great Plains due to all of the problems with the Winter Wheat crops in the region.
Overnight News: The Delta and the Southeast will get mostly dry conditions over the next few days and some precipitation next week. Temperatures should be mostly near to above normal. Texas will see mostly cry conditions. Temperatures will be warm. The USDA average price is now 79.88 ct/lb. ICE said that certified stocks are now 62,624 bales, from 69,167 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 8200, 8100, and 8070 May, with resistance of 8380, 8420, and 8550 May.
General Comments: FCOJ was a little lower again and the market seems to be losing small amounts each day while it waits for some news to excite buyers. Futures show a weak appearance on both the daily and weekly charts and Florida remains mostly warm and dry. The market is still dealing with a short crop against weak demand. The current weather is good as temperatures are warm and it is mostly dry, but some big rains are reported in northern parts of the state. The harvest is progressing well and fruit is being delivered to processors. 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. Flowering has been reported in the groves, and some fruit is forming. Irrigation is being used.
Overnight News: Florida should get mostly dry weather. Temperatures will average near to above normal. Brazil should get scattered showers and near to below normal temperatures. The best precipitation should be this weekend. ICE said that 0 delivery notices were posted today against March contracts and that total deliveries for the month are 16 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 131.00 May. Support is at 137.00, 135.00, and 134.00 May, with resistance at 140.00, 142.00, and 143.00 May.
General Comments Futures were little changed in quiet trading. Trends are sideways to down on the charts. Funds and other speculators were on both sides of the market as they waited for the FED announcement on interest rates. However, traders sense underlying interest in buying the market amid ideas that the bearish news is finally priced in. Origin is offering in Central America and is till finding weak differentials. Some business is getting done. Traders anticipate big crops from Brazil and from Vietnam this year and have seen no reason to cover the short position in a big way. New York traders are talking about good weather currently being reported in Brazil and expect another bumper crop. Robusta remains the stronger market as Vietnamese producers and merchants are not willing to sell at current prices and are willing to wait for a rally
Overnight News: Certified stocks are slightly lower today and are about 1.933 million bags. The ICO composite price is now 112.75 ct/lb. Brazil will get chances for showers today and drier conditions 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 showers from north to south over the next few days. Temperatures should average near to above normal.
Chart Trends: Trends in New York are down with no objectives. Support is at 116.00, 113.00, and 110.00 May, and resistance is at 122.00, 125.00 and 126.00 May. Trends in London are mixed to down, with objectives of 1700 and 1650 May. Support is at 1730, 1710, and 1680 May, and resistance is at 1780, 1800, and 1830 May.
General Comments: Futures were higher, and New York is back in a trading range. London is still the weaker market as the market expects big offers. 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. Traders hear about big production form the world producers and have no real reason to buy even if they have no interest in selling. Ideas that Sugar supplies available to the market can increase in the short-term have been key to any selling. India will export up to 4.0 million tons of Sugar this year after being a net importer for the last couple of years. The government there is reducing or eliminating export taxes in an effort to promote selling i world markets. It has a significant surplus after several years of lower production. Thailand has produced a record crop and is selling. Mills in Brazil have decided to make more Ethanol as world Crude Oil and products prices have been very strong. Brazil still has plenty of Sugar to sell even with the different refining mix.
Overnight News: Brazil will get chances for showers starting today, then drier weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1250, 1230, and 1200 May, and resistance is at 1290, 1320, and 1340 May. Trends in London are mixed to down with objectives of 341.00 and 340.00 May. Support is at 347.00, 345.00, and 344.00 May, and resistance is at 360.00, 364.00, and 370.00 May.
General Comments Futures closed higher in correction trading. Short term trends remain down in both New York and London. It has been a big supply based rally that could be running out of steam right now, but the rally overall has been impressive. Ideas of smaller world production that has been largely sold remain part of the rally, and ideas of strong demand from processors remains the other part of the rally. Most in the trade anticipate the increased demand, and current West Africa weather is hot enough and dry enough to create production concerns. There have been reports recently of delayed deliveries to ports. 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 mid crop harvest is starting, and wire reports indicate that some initial mid crop harvest is underway in Nigeria. No yield reports have been seen yet. Demand has been improving and is likely to continue to improve 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 little changed today at 4.619 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2440 and 2360 May. Support is at 2430, 2400, and 2340 May, with resistance at 2580, 2600, and 2620 May. Trends in London are mixed to down with objectives of 1710 May. Support is at 1710, 1680, and 1650 May, with resistance at 1790, 1830, and 1860 May.
Questions? Ask Jack Scoville today at 312-264-4322
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