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 early trading, but the rally could not extend to new highs and long liquidation entered the pit. The price action in the ned was weak and more selling is possible today. The next big news for the market will be the Trump tariffs announcement against China that will be released tomorrow. Wire reports indicate that tariffs will be applied, but how much and what products will be involved is still being debated internally. Either way,the news is bad for agricultural prices in general and Cotton prices specifically as China was getting ready to buy a lot of Cotton in world markets. The US would have been the primary source, now India and other countries might do the selling. Demand ideas remain strong, especially with the mills and their on call position waiting to be covered in the next couple of weeks. Ideas have been that US Cotton conditions remain poor 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. The monsoon has started in southern India, but Pakistan remains very hot and dry and is now facing drought conditions.
Overnight News: The Delta will be mostly dry and the Southeast will get drier weather this week. Both areas 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 89.94 ct/lb. ICE said that certified stocks are now 79,472 bales, from 78,421 bales yesterday. USDA said that net Upland Cotton export sales were 34,800 bales this year and 226,700 bales next year. Net Pima sales were 7,700 bales this year and 32,400 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 9270, 9170, and 8990 July, with resistance of 9470, 9580, and 9650 July.
General Comments: FCOJ was lower again as Florida weather remains good and demand prospects remain poor. USDA left its production report for the current crop about unchanged, and the weather for the next crop is called good. 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 remain good as the rainy season appears to be underway. Florida producers are seeing golf ball sized or larger fruit. Conditions are reported as generally good, although it is dry in the state this week. Brazil could use more rain as Sao Paulo has been hot and mostly dry. The harvest there is about to start.
Overnight News: Florida should get scattered showers each day. Temperatures will average near to above normal. Brazil should get mostly dry weather, but some showers tomorrow, and near to above normal temperatures.
Chart Trends: Trends in FCOJ are down with objectives of 154.00 and 153.00 July. Support is at 152.00, 150.00, and 142.00 July, with resistance at 157.00, 159.00, and 161.00 July.
General Comments Futures were a little lower in both markets on fund selling tied to ideas that a big Brazil crop is finally coming to the market and on a weaker Real against the US Dollar. Both markets remain in trading ranges, but both are acting weak and could go lower. Demand for Robusta is good as Brazil said it was preparing to buy Robusta in the world market to cover domestic needs. Meanwhile, Robusta offers from Vietnam are less right now and traders say internal supplies are tight due to a smaller than expected harvest last year. A bigger new crop harvest is expected as current rains are good. It remains mostly dry in Arabica areas of Brazil, 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. The logistics of delivering Coffee to ports is still a big problem in Nicaragua and Guatemala. Speculators anticipate big crops from Brazil and from Vietnam this year and have remained short in the market.
Overnight News: Certified stocks are higher today and are about 2.046 million bags. The ICO composite price is now 109.74 ct/lb. Brazil will get drier conditions. Temperatures should be near to above normal today, than below normal by this weekend. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get showers.
Chart Trends: Trends in New York are 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 to down with objectives of 1680 July. Support is at 1700, 1670, and 1640 July, and resistance is at 1740, 1760, and 1780 July.
General Comments: Futures were higher in New York and in London as the short covering rally continued. The rally can keep going for now as there is no real selling interest from producers . However, there is still a lot of Sugar in the world. Short term trends are starting to turn up again after the price action this week. Both markets have tested support after an initial move higher and held, so moves higher are possible now as more speculators cover. 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 have started again. 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. Thailand has produced a record crop and is selling.
Overnight News: Brazil will get dry weather. Temperatures should be near normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1320, 1380, and 1390 October. Support is at 1250, 1220, and 1190 October, and resistance is at 1280, 1320, and 1340 October. Trends in London are mixed. Support is at 347.00, 337.00, and 335.00 August, and resistance is at 356.00, 360.00, and 361.00 August.
General Comments Futures were lower and the market acts ready to start a new leg down on the charts. Ideas are that demand can start to improve with the lower price levels, but the world economic situation is still in a flux after the G-7 meetings. 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 5.034 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2350, 2300, and 2260 July, with resistance at 2460, 2480, and 2500 July. Trends in London are mixed. Support is at 1600, 1570, and 1550 July, with resistance at 1660, 1710, and 1750 July.