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 lower and acts weak again. The market is concerned about the unfavorable US weather. US farmers in just about all production areas plan to plant more Cotton. It is drier in the Delta and Texas, and drier weather will be seen in the Southeast. The drier Delta and Southeast weather will be welcome after some big rains in recent days. Warmer temperatures would be beneficial. The Texas Panhandle needs rain badly. Prices overall have been much higher than most commercials had expected, but the recent 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.
Overnight News: The Delta and the Southeast will get drier weather this week, but some rains are likely this weekend. Temperatures should be mostly below normal. Texas will see mostly cry conditions. Temperatures will be below normal. The USDA average price is now 79.18 ct/lb. ICE said that certified stocks are now 71,883 bales, from 71,797 bales yesterday. USDA said that net Upland Cotton export sales are now 290,200 bales this year and 229,800 bales next year. Net Pima sales are 4,900 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 8230, 8070, and 7860 May, with resistance of 8330, 8410, and 8440 May.
General Comments: FCOJ was lower yesterday on profit taking. The market is in a trading range and could be forming a low. USDA left its Florida oranges production estimates unchanged on Tuesday as had been expected. 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 is mostly over, and fruit is forming and starting to develop. Irrigation is being used.
Overnight News: Florida should get mostly dry weather this week. Temperatures will average near to below normal. Brazil should get mostly dry weather and near to above normal temperatures. The best precipitation should be this weekend.
Chart Trends: Trends in FCOJ are up with objectives of 145.00 May. Support is at 140.00, 138.00, and 136.00 May, with resistance at 145.00, 146.00, and 148.00 May.
General Comments Futures in New York were higher as strong commercial buying met fund selling and origin price-fixing. London was also higher. Origin is still offering in Central America and is still finding weak differentials. Good business is getting done and exports are active. Traders anticipate big crops from Brazil and from Vietnam this year and have remained short in the market. 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. Vietnamese cash prices were steady last week.
Overnight News: Certified stocks are higher today and are about 1.965 million bags. The ICO composite price is now 111.64 ct/lb. Brazil will get drier conditions until showers appear on Sunday. 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 in the north starting tomorrow.
Chart Trends: Trends in New York are down with objectives of 111.00 May. Support is at 113.00, 110.00, and 108.00 May, and resistance is at 118.00, 119.00 and 121.00 May. Trends in London are mixed. Support is at 1690, 1670, and 1640 May, and resistance is at 1760, 1780, and 1800 May.
General Comments: Futures were a little higher in consolidation trading. Trends are mostly down in both markets, but London is trying to put at least a short-term low together at this time. The fundamentals remain little changed, and there does not seem to be much for now that can shake the market out of its current trend. Traders hear about big production from the world producers and little in the way of special demand that could absorb some of the surplus. Ideas that Sugar supplies available to the market can increase in the short-term have been key to any selling. India will export Sugar this year after being a net importer for the last couple of years. 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 dry weather until some showers return on Sunday. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1180 and 1120 July. Support is at 1170, 1140, and 1110 July, and resistance is at 1200, 1240, and 1270 July. Trends in London are mixed. Support is at 336.00, 333.00, and 331.00 August, and resistance is at 345.00, 346.00, and 348.00 August.
General Comments Futures were sharply higher on the strong European crush data. The market is starting to look ahead at the next round of quarterly grind reports and expects increased demand. The reports should show a slight increase in demand for Cocoa beans for processing. Grinders are making good money in the processing right now and will be looking for any beans they can find. For example, Callebrut in Europe reported stronger earnings last week amid improved demand for products. Ideas of smaller world production that has been largely sold remain part of the rally. Showers and more seasonal temperatures have been seen in the last few weeks to improve overall production conditions in West Africa. 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, but estimates from the country imply that variable yields can be expected. The harvest should begin soon in Ivory Coast and Ghana.
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 higher today at 5.132 million bags. ICE said that 0 delivery notices were posted against May Contracts and that total deliveries for the month are now 2 contracts.
Chart Trends: Trends in New York are up with no objectives. Support is at 2700, 2670, and 2630 July, with resistance at 2860, 2890, and 2920 July. Trends in London are up with objectives of 1910 July. Support is at 1830, 1810, and 1780 July, with resistance at 1890, 1910, and 1940 July.
DJ European Cocoa grinding Buoy London Futures — Market Talk
1342 GMT – London cocoa futures are up 2.4% at GBP 1,829 a metric ton after the European Cocoa Association said grinding–the amount of raw cocoa processed into butter and powder to make confectionary and chocolate–rose 5.5% in 1Q. That’s the highest first-quarter percentage rise on record and a sign that cocoa demand remains strong in Europe. Though prices of cocoa butter rose sharply, companies were still able to use the cocoa beans they had bought at low prices, Commerzbank analysts say. However, “cocoa prices have soared in the past two months…driving margins back down again. Grinding in the second quarter is therefore likely to be considerably lower,” they say. (email@example.com; @davidhodari)