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 after the market did not perform well on Friday. It looked like long liquidation from speculators as crop conditions are holding and as demand prospects are not as good as they were a couple of months ago. Planted area was increased despite bad weather in West Texas, so production ideas are higher. The weekly export sales report last week showed Chinese cancellations, so the move away from US Cotton by China has now begun. Wire reports indicate that tariffs against US Cotton have forced buyers in China to look to India. Forward sales have increased and prices there have held firm. The US would have been the primary source, now India and other countries are doing the selling. Crop conditions are improved as some rains have been seen in Texas and as the Southeast has been a little drier. Texas now has turned hot and dry again. The weather is improving in India and China as monsoon rains are reported in India and as China has turned drier. The monsoon has started in southern and central India, but Pakistan remains very hot and dry and is still facing drought conditions.
Overnight News: The Delta and the Southeast will get mostly dry weather until showers return this weekend. Temperatures should be above normal. Texas will see mostly dry conditions. Temperatures will be above too much above normal. The USDA average price is now 80.91 ct/lb. ICE said that certified stocks are now 92,799 bales, from 91,960 bales yesterday. ICE said that 0 delivery notices were posted against July Contracts today and that total deliveries are now 649 contracts.
Chart Trends: Trends in Cotton are mixed to down with objectives of 8100, 7880, and 7780 December. Support is at 8300, 8150, and 8030 December, with resistance of 8440, 8530, and 8560 December.
Date 1-Jul 24-Jun 2017 Avg
Cotton Squaring 42 32 43 40
Cotton Setting Bolls 12 6 12 9
Very Poor Fair Good Very Good
Cotton This Week 6 18 33 36 7
Cotton Last Week 1 18 39 25 7
Cotton Last Year 2 10 34 43 11
General Comments: FCOJ was higher as some tropical waves started to cross the Atlantic. None of them appears likely to produce a damaging tropical storm, but the waves are coming so the risk of damage is elevated Florida weather remains good and demand prospects remain poor, especially with the potential for lost Business with the EU. The tariff wars between the US and the EU are hurting export demand ideas. The EU imports a lot of FCOJ and these exports will most likely be hurt due to retaliation that will be made by Europe that included increased tariffs on US FCOJ. 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, and work in groves maintenance is active. Irrigation is being used. Brazil could use more rain as Sao Paulo has been hot and mostly dry. The harvest there is active.
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. ICE said that 14 delivery notices were posted against July contracts this morning and that total deliveries are now 114 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 169.00 and 176.00 September. Support is at 163.00, 160.00, and 158.00 September, with resistance at 169.00, 171.00, and 172.00 September.
General Comments Futures were lower again in New York, and slightly lower in London as the market starts to look for offers from Vietnam. Both markets are anticipating big supplies from the big suppliers Brazil and Vietnam, and US Dollar strength means that both can sell for more money in local terms. The charts show weakness once again in New York as September moved to new contract lows. London is falling on ideas of good world availability of Robusta, but producers there have been reluctant to offer. It has been dry in Vietnam, and there is little on offer from that origin as producers want to see how big the next crop will be and try to wait for higher prices. Robusta offers from Vietnam are still down and traders say internal supplies are tight due to a smaller than expected harvest last year. 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. 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 2.061 million bags. The ICO composite price is now 106.78 ct/lb. Brazil will get drier conditions. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get showers. ICE said that 23 delivery notices were posted in New York and that total deliveries for the month are now 1,233 contracts.
Chart Trends: Trends in New York are down with objectives of 109.00 September. Support is at 112.00, 109.00, and 106.00 September, and resistance is at 115.00, 118.00 and 119.00 September. Trends in London are mixed. Support is at 1670, 1640, and 1610 September, and resistance is at 1710, 1730, and 1750 September.
General Comments: Futures were sharply lower in both markets and trends turned down again on daily charts. A weaker Real and ideas of big world production are keeping the selling intact. Funds were the best sellers. There is no real selling interest from producers as they hope for higher prices. Brazil producers are also worried about Cane production even with the rapid early harvest. Movement from mills to ports has been slow due to the high freight costs left from the recent truckers strike. However, there is still a lot of Sugar in the world but the futures price action implies that there is enough movement right now to keep the market well supplied. India is exporting Sugar again after being a net importer for the last couple of years. China has reached a deal to buy at least part of the Indian surplus, so hopes are that India will not offer as much into the world market. However, a potential source of big demand might also be lost. Conditions have improved in the last couple of weeks as monsoon rains have arrived. Thailand has produced a record crop and is selling.
Overnight News: Brazil will get dry weather. Temperatures should be near to above normal. ICE said that 6,519 contracts were posted for delivery against July New York futures.
Chart Trends: Trends in New York are down with objectives of 1150 and 1090 October. Support is at 1150, 1120, and 1090 October, and resistance is at 1200, 1230, and 1250 October. Trends in London are down with objectives of 328.00 and 316.00 October. Support is at 328.00, 323.00, and 317.00 October, and resistance is at 336.00, 340.00, and 346.00 October.
General Comments Futures were mixed in New York, but higher in London. Trends are trying to turn up in both markets. speculators have been the best buyers. Ideas that current weather conditions are good for crops in West Africa continue to circulate. There have been reports of good rains throughout the region and big yields are possible. There are still some concerns about demand as consumers are looking for healthier products to consume in many cases and as the world economy is still an issue. Ideas are that demand can start to improve with the lower price levels, but the world economic situation is still in a flux. Fears about the EU economy are important to 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. Nigeria said yesterday that its initial main crop harvest could begin in August.
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 4.843 million bags. ICE said that 0 notices were posted against July contracts and that total deliveries for the month are now 22 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 2680 and 2900 September. Support is at 2460, 2430, and 2380 September, with resistance at 2530, 2560, and 2590 September. Trends in London are mixed to up with objectives of 1910, 1930, and 2010 September. Support is at 1810, 1780, and 1740 September, with resistance at 1850, 1900, and 1920 September.