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 higher in recovery trading and as US and world weather and growing conditions remained questionable. Ideas are that US Cotton especially is in a bad spot due to the extreme dry and hot weather in western Texas. The current weather is less than ideal in West Texas and at other producing areas around the world. The Southeast US is too wet. The weather is bad in India and China, with big heat seen in India and Pakistan and too much rain in China. Lost Chinese production could mean increased sales for the US, especially now since the US will have the quality the Chinese need. Futures traders are looking at a market that still has strong export demand and has seen some very uneven planting and growing conditions in the US. Much of the Southeast and parts of the Delta have seen big rains, especially in the last couple of days. Texas has seen some precipitation, but dryland areas are still very dry. Temperatures have turned hot. Oklahoma and Kansas have improved conditions due to recent rains. It has been hot and dry on the Indian Subcontinent and also in China. There are ideas that the US is now running short of high quality Cotton to deliver to the exchange and to overseas buyers. Demand remains strong in export markets.
Overnight News: The Delta will be mostly dry after some rain today and the Southeast will get drier weather over the next couple of days, then showers over the weekend. Temperatures should be mostly below normal. Texas will see mostly dry conditions. Temperatures will be above normal. The USDA average price is now 88.39 ct/lb. ICE said that certified stocks are now 76,385 bales, from 74,361 bales yesterday. USDA said that net Upland Cotton export sales were 16,700 bales this year and 238,100 bales next year. Net Pima sales were 21,500 bales this year and 7,600 bales next year.
Chart Trends: Trends in Cotton are up with objectives of 9940 July. Support is at 9180, 9120, and 9060 July, with resistance of 9380, 9440, and 9500 July.
DJ On-Call Cotton – May 31
As of May 25. 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
May 18 0 0 0 0 25 -25
Jul 18 41,499 46,553 -5,054 4,590 4,776 -186
Oct 18 0 0 0 0 0 0
Dec 18 43,859 40,484 3,375 21,500 21,828 -328
Mar 19 32,300 32,167 133 1,541 1,629 -88
May 19 16,058 16,088 -30 273 122 151
Jul 19 15,145 14,812 333 984 974 10
Dec 19 10,718 10,232 486 13,184 13,403 -219
Mar 20 2,470 2,470 0 208 208 0
May 20 643 643 0 0 0 0
Jul 20 1,035 1,035 0 0 0 0
Dec 20 353 353 0 262 262 0
Total 164,080 164,837 -757 42,542 43,227 -685
May 18 0 0 0
Jul 18 115,725 129,164 -13,439
Oct 18 34 36 -2
Dec 18 144,386 122,478 21,908
Mar 19 24,972 22,858 2,114
May 19 5,105 3,860 1,245
Jul 19 2,784 2,199 585
Dec 19 10,559 9,377 1,182
Mar 20 46 0 46
May 20 0 0 0
Jun 20 0 0 0
Dec 20 114 70 44
Total 303,725 290,042 13,683
General Comments: FCOJ was lower on what appeared to be long liquidation from speculators. Traders are worried about demand and are noting improved production prospects for Florida. In particular, President Trump announced tariffs on metals imports from Mexico, Canada, and the EU. The EU imports a lot of FCOJ and these exports could be hurt by any retaliation made by Europe. Some drought busting rains have been reported in Florida in the last week, and most areas should have plenty of precipitation for now. The situation in the state should continue to improve as the rainy season appears to be underway/ The market is still dealing with a short crop against weak demand. Florida producers are seeing golf ball sized fruit. Conditions are reported as generally good. Irrigation is being used, but less now after the rains. Brazil also could use more rain as Sao Paulo has been hot and dry. Generally good conditions are reported in Europe and northern Africa.
Overnight News: Florida should get showers and storms. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to above normal temperatures.
Chart Trends: Trends in FCOJ are down with objectives of 161.00 and 154.00 July. Support is at 157.00, 155.00, and 152.00 July, with resistance at 166.00, 169.00, and 172.00 July.
General Comments Futures in New York and London were higher as the ruckers strike in Brazil continued to delay shipments of Coffee from the country and on some forecasts for cold temperatures in southern Brazil over the weekend. It is not clear that the cold will move far enough north to hurt Coffee. More cold weather is coming sooner or later as the Winter season has just started. It remains mostly dry in Arabica areas, and there is no rain in the forecast for the next week. Origin is still offering in Central America and is still finding weak differentials. It has been a little dry so far this year in the region. Speculators anticipate big crops from Brazil and from Vietnam this year and have remained short in the market. Robusta remains the stronger market as Vietnamese producers and merchants have not been willing to sell at current prices. Vietnamese cash prices are weaker this week with good supplies noted in the domestic market. Current rains in the country are favorable for the crops.
Overnight News: Certified stocks are higher today and are about 2.019 million bags. The ICO composite price is now 112.94 ct/lb. Brazil will get drier conditions. Temperatures should be near to below normal. Colombia should get isolated showers. Central America and southern Mexico should get isolated showers or dry conditions. Vietnam will get showers.
Chart Trends: Trends in New York are up with objectives of 124.00 and 127.00 July. Support is at 120.00, 119.00, and 117.00 July, and resistance is at 124.00, 126.00 and 128.00 July. Trends in London are mixed. Support is at 1730, 1720, and 1700 July, and resistance is at 1760, 1780, and 1800 July.
General Comments: Futures were higher in New York and in London on what appeared to be more speculative short covering. Prices were supported by the dry weather in Brazil and also the truckers strike there that is now over 10 days old. Shipments to mills and ports have stopped due to the action. The cold air in southern Brazil could get cold enough to damage Sugarcane still in the fields. Most traders remain focused on the big world production. It is dry in parts of Brazil, including some Sugarcane production areas, and there is some talk of losses to the crop in the near future unless rains return soon. There are no real rains in the forecast for now. However, the initial harvest has been big and processing has been more active than last year. India is back to export Sugar this year after being a net importer for the last couple of years. The government is subsidizing industry and producers to help maintain an active market flow and to prevent the buildup of Sugar in storage. India could raise the internal price or try to stockpile supplies in meetings that are now scheduled for this week. Thailand has produced a record crop and is selling. Middle East and North African buyers are reported to be buying normal or less than normal amounts of Sugar in the world market right now.
Overnight News: Brazil will get dry weather. Temperatures should be near to below normal.
Chart Trends: Trends in New York are up with objectives of 1300, 1340, and 1370 July. Support is at 1250, 1230, and 1200 July, and resistance is at 1280, 1310, and 1330 July. Trends in London are mixed to up with objectives of 368.00 August. Support is at 347.00, 345.00, and 340.00 August, and resistance is at 356.00, 361.00, and 367.00 August.
General Comments Futures were lower and the down trend on the charts appeared once again. The move came even through the ICCO cut its production surpluses for 2017-18 to 10,000 tons, down from an estimate of 105,000 tons in February. Production was estimated at 4.744 million tons, from 4.748 million in February.. It is possible that Cocoa has now made a significant top in both markets. Funds have turned sellers and appear ready to continue to liquidate long positions due in part to the trend change. Fears that developed about the EU economy over the weekend spilled into Cocoa as Europe is the largest per capita consumer of chocolate in the world. Italy is having problems again and there are fears that the problems there could spread to other EU states. Showers and more seasonal temperatures have been seen in the last few weeks to improve overall production conditions in West Africa. Conditions also appear good in East Africa and Asia. The mid crop harvest is active in West Africa.
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 dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 5.151 million bags.
Chart Trends: Trends in New York are down with no objectives. Support is at 2420, 2360, and 2250 July, with resistance at 2500, 2540, and 2600 July. Trends in London are down with objectives of 1760 and 1670 July. Support is at 1750, 1730, and 1690 July, with resistance at 1810, 1870, and 1900 July.