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 May FAO Food Price Index Hits Highest Since October
By David Hodari
LONDON–World food prices jumped in May, with increases in cereals and dairy products significantly outweighing falling sugar, meat, and vegetable oil prices, the Food and Agriculture Organization of the United Nations said Thursday.
The FAO’s food-price index was up 1.2% from April and hit its highest since October 2017, the organization said.
Dairy prices gained 5.5%, climbing for the fourth straight month, the FAO said. While still 22% below their February 2014 peak, prices of dairy products–particularly cheese, butter, and skim-milk powder–with tight supply in New Zealand driving the rise, according to the report.
Cereal prices also rose, increasing 2.4% from April and up almost 17% on-the-year at its highest since early 2015. Prices of all major cereals have strengthened considerably in recent months, and “wheat values gained largely on concerns over production prospects in a number of major exporting countries” including Brazil and Argentina, the report said.
Vegetable oils fell 2.6% on month to a 27-month low, thanks to slipping palm, soy, and sunflower oil prices.
Sugar prices decreased 0.5% on month, falling for the sixth consecutive month amid forecasts of huge global production this season. India and Thailand join the European Union in expecting heavy surpluses.
Meat prices ticked down on the month, with falling pig and bovine meat prices slightly outweighing a rise in poultry prices, the FAO said.

COTTON
General Comments: Cotton was sharply higher in recovery trading yesterday despite a weak export sales report. The weaker sales came due to the high prices and as the US Dollar has been somewhat stronger against world currencies recently. 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.
Overnight News: The Delta will be mostly dry and the Southeast will get drier weather this week. Both áreas have chances for showers late this weekend. Temperatures should be mostly below normal. Texas will see mostly dry conditions. Temperatures will be above normal. The USDA average price is now 86.54 ct/lb. ICE said that certified stocks are now 78,377 bales, from 78,666 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 9170, 8990, and 8940 July, with resistance of 9250, 9270, and 9450 July.

DJ On-Call Cotton – Jun 7
As of Jun 1. 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
Jul 18 34,650 41,499 -6,849 2,881 4,590 -1,709
Oct 18 0 0 0 0 0 0
Dec 18 45,730 43,859 1,871 20,667 21,500 -833
Mar 19 33,187 32,300 887 1,737 1,541 196
May 19 16,642 16,058 584 236 273 -37
Jul 19 16,036 15,145 891 923 984 -61
Dec 19 10,863 10,718 145 14,229 13,184 1,045
Mar 20 2,589 2,470 119 208 208 0
May 20 683 643 40 0 0 0
Jul 20 1,035 1,035 0 0 0 0
Dec 20 343 353 -10 262 262 0
Total 161,758 164,080 -2,322 41,143 42,542 -1,399
Open Change
Int
Jul 18 99,811 115,725 -15,914
Oct 18 43 34 9
Dec 18 172,358 144,386 27,972
Mar 19 29,230 24,972 4,258
May 19 5,070 5,105 -35
Jul 19 3,481 2,784 697
Dec 19 11,912 10,559 1,353
Mar 20 46 46 0
May 20 0 0 0
Jun 20 0 0 0
Dec 20 202 114 88
Total 322,153 303,725 18,428

FCOJ
General Comments: FCOJ was a little lower as Florida wether remains good and demand prospects do not. The hurricane season has started.. There are no storms or areas of interest yet in the Atlantic, but something could be forming that might come close to the state next week. Traders are worried about demand and are noting improved production prospects for Florida. The tariff wars between the US and Canada, Mexico, and the EU are hurting export demand ideas. 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 and that the measures will be enacted next month. 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 scattered showers each day. 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 161.00, 157.00, and 155.00 July, with resistance at 167.00, 169.00, and 172.00 July.

DJ Florida FCOJ Movement and Pack – Jun 8
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING:
6/2/2018 Corresponding
Current Week Last
Week Season
6/2/2018 6/3/2017 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 280.83 215.21 30.5%
Retail/Institutional 6.58 7.66 -14.1%
Total 287.41 222.87 29.0%
Pack
Bulk 0.45 1.14 -61.0%
Retail/Institutional 0.92 0.74 25.2%
Total Pack 1.37 1.88 -27.2%
Reprocessed -1.37 -1.88 -27.2%
Pack from Fruit 0.00 0.00 -100.0%
Receipts & Losses
Net Gain or Loss 0.03 -0.10 -69.5%
Imports – Foreign 2.46 6.19 -60.2%
Domestic Receipts 0.22 0.63 -64.5%
Receipts of Florida Product
from Non-Reporting Entit 0.00 0.01 -100.0%
Chilled OJ used in FCOJ 0.00 0.00 NC
Reprocessed FCTJ 0.00 0.00 NC
Total Carry Over, Receipt & Pack
Bulk 282.63 221.21 27.8%
Retail/Institutional 7.50 8.39 -10.6%
Total 290.12 229.60 26.4%
MOVEMENT
Bulk
Domestic 2.82 3.65 -22.5%
Exports 0.30 0.41 -27.1%
Total (Bulk) 3.13 4.06 -23.0%
Retail/Institutional
Domestic 1.06 1.31 -18.7%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.06 1.31 -18.7%
Total Movement 4.19 5.37 -22.0%
ENDING INVENTORY
Bulk 279.50 217.15 28.7%
Retail/Institutional 6.44 7.09 -9.1%
Ending Inventory 285.94 224.23 27.5%
Total Same
Total Season Period Last
To Date Season
2-Jun-18 3-Jun-17 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 185.02 212.24 -12.8%
Retail/Institutional 7.20 6.78 6.1%
Total 192.21 219.03 -12.2%
Pack
Bulk 86.20 140.00 -38.4%
Retail/Institutional 43.87 49.61 -11.6%
Total Pack 130.07 189.61 -31.4%
Reprocessed -88.97 -115.15 -22.7%
Pack from Fruit 41.10 74.46 -44.8%
Receipts & Losses
Net Gain or Loss 0.77 -3.34 -76.9%
Imports – Foreign 242.97 187.54 29.6%
Domestic Receipts 8.10 4.52 79.2%
Receipts of Florida Product 0.40 0.74 -46.2%
from Non-Reporting Entity 1.00 2.56 -60.9%
Chilled OJ used in FCOJ 0.47 0.39 19.0%
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 435.96 429.50 1.5%
Retail/Institutional 51.07 56.40 -9.5%
Total 487.02 485.90 0.2%
MOVEMENT
Bulk 145.34 156.91 -7.4%
Domestic 11.12 55.44 -79.9%
Exports 156.46 212.35 -26.3%
Total (Bulk)
Retail/Institutional
Domestic 44.63 49.31 -9.5%
Exports 0.00 0.00 NC
Total (Retail/Inst) 44.63 49.31 -9.5%
Total Movement 201.09 261.67 -23.2%
ENDING INVENTORY
Bulk 279.50 217.15 28.7%
Retail/Institutional 6.44 7.09 -9.1%
Ending Inventory 285.94 224.23 27.5%

COFFEE
General Comments Futures in both markets were lower on speculative selling tied to extreme weakness in the Brazilian Real against the US Dollar that created new ideas of increased availability of a big Brazil crop in the market. Robusta in London was firmer when compacted to New York as Brazil said earlier this week 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 domestic demand. 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. No coffee is moving in Nicaragua due to the political tensions there, and the volcano eruption in Guatemala has hurt the logistical situation there. 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 higher today and are about 2.033 million bags. The ICO composite price is now 110.41 ct/lb. Brazil will get drier conditions, but light precipitation is likely today. 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.
Chart Trends: Trends in New York are mixed to down with objectives of 115.00 and 111.00 July. Support is at 115.00, 112.00, and 109.00 July, and resistance is at 119.00, 122.00 and 125.00 July. Trends in London are mixed. Support is at 1720, 1700, and 1670 July, and resistance is at 1760, 1780, and 1800 July.

SUGAR
General Comments: Futures were lower as the Brazilian Real lost significant value in the world market. The currency moves make Brazilian Sugar that much cheaper. Short term trends remain down. Analysts noted that the market still has plenty of Sugar and no real fear of short supplies, so the currency moves just add to potential availability. Prices have been supported by the dry weather in Brazil and also the truckers strike there that is now over. Shipments to mills and ports had been stopped due to the action but are now resuming. 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. The harvest so far 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 will give aid of up to $1 billion to mills and will also stockpile supplies. 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 1200, 1170, and 1150 October, and resistance is at 1260, 1280, and 1320 October. Trends in London are down with objectives of 325.00 August. Support is at 340.00, 337.00, and 331.00 August, and resistance is at 350.00, 356.00, and 360.00 August.

COCOA
General Comments Futures were lower in New York and London as the selling interest remains intact. Futures have given up a lot of price in the last couple of weeks and the market could use a rest period.. It is possible that Cocoa has now made a significant top in both markets and that more downside pressure is coming longer term. Part of the problem is with the world economy and the tariff wars between the US and the rest of the world. Cocoa is not directly involved, but anything that might hurt the world economy could dent Cocoa demand. 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. North American demand could be pressured due to the economic wars started in the US against its neighbors. 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, but most main areas will be dry. 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 5.099 million bags.
Chart Trends: Trends in New York are down with no objectives. Support is at 2250, 2210, and 2180 July, with resistance at 2360, 2400, and 2460 July. Trends in London are down with no objectives. Support is at 1600, 1570, and 1550 July, with resistance at 1660, 1710, and 1750 July.

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