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 again yesterday on chart based selling as US and world weather and growing conditions remained questionable. Reports of beneficial rains in the Texas Panhandle hurt the price action. Ideas have been 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 as hot and dry conditions continue and is not good at other producing areas around the world. The Southeast US is too wet, but has begun to dry out. 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. China is moving to allow more imports by increasing quotas now. 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.
Overnight News: The Delta will be mostly dry and the Southeast will get drier weather this week. Both areas have chances for 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 85.31 ct/lb. ICE said that certified stocks are now 78,66 bales, from 76,983 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 8690 and 8170 July. Support is at 8810, 8770, and 8670 July, with resistance of 9230, 9270, and 9450 July.
General Comments: FCOJ was slightly lower in range trading as the hurricane season is underway. There are no storms or areas of interest yet in the Atlantic. 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. The EU has indicated that FCOJ will be on the list of items subject to increased tariffs. The growing conditions in Florida should continue to improve as the rainy season appears to be underway. The market is still dealing with a short crop against weak demand. Demand is bad enough that year on year inventories are increasing even with the very bad production last year. Florida producers are seeing golf ball sized or larger fruit. Conditions are reported as generally good. Brazil 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 drier weather. 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 mixed to down with objectives of 161.00 and 154.00 July. Support is at 163.00, 161.00, and 157.00 July, with resistance at 167.00, 169.00, and 172.00 July.
General Comments Futures in New York were lower and about unchanged in London yesterday on speculative selling tied to weakness in most agricultural markets. Robusta in London held better as Brazil said it was preparing to buy Robusta in the world market to cover domestic needs. The dry weather in Brazil production areas for Robusta meant less production and there is now not enough to cover the demand. It was colder in Brazil over the weekend, but there were no reports of damaging temperatures. 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. The truckers strike has delayed shipments for a significant amount of Coffee just as the harvest is beginning. However, it does not appear that buyers are looking for alternatives right now. 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. 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 unchanged today and are about 2.023 million bags. The ICO composite price is now 112.70 ct/lb. Brazil will get drier conditions, but light precipitation is likely today and Thursday. 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 mixed. Support is at 119.00, 117.00, and 115.00 July, and resistance is at 122.00, 125.00 and 126.00 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 a little higher in New York and in London on some speculative buying. Short term trends remain down. Analysts noted that the market still has plenty of Sugar and no real fear of short supplies. Prices have been supported by the dry weather in Brazil and also the truckers strike there that is now over two weeks old. Shipments to mills and ports have stopped due to the action. 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, but light precipitation is possible every few days. Temperatures should be near normal.
Chart Trends: Trends in New York are down with objectives of 1140 October. Support is at 1180, 1170, and 1150 October, and resistance is at 1230, 1250, and 1280 October. Trends in London are down with objectives of 325.00 August. Support is at 337.00, 331.00, and 328.00 August, and resistance is at 347.00, 350.00, and 356.00 August.
General Comments Futures were lower and prices made new lows for the move. Speculators were the best sellers. 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 last week 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 a little higher today at 5.12 million bags.
Chart Trends: Trends in New York are down with no objectives. Support is at 2250, 2210, and 2180 July, with resistance at 2400, 2460, and 2480 July. Trends in London are down with no objectives. Support is at 1600, 1570, and 1550 July, with resistance at 1710, 1750, and 1780 July.