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

COTTON
General Comments: Cotton was sharply higher to limit up yesterday in reaction to the USDA reports. USDA showed increased planted area, but reduced harvested area due to the big drought in Texas. This led to production estimates that were below trade thinking. USDA also showed that strong demand can be maintained through the next crop year. Ending stocks estimates were lower than expected. The close was strong and some follow through buying is very possible today. US crop conditions are fading due to the extreme Texas weather, but demand prospects are not as good as they were a couple of months ago because of the tariff war with China. Chinese 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 the Southeast has been a little drier. Texas now is 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 and rains are now moving into northwest India and Pakistan
Overnight News: The Delta and the Southeast will get showers mostly near coastal areas today. Most areas will see light to moderate showers by the end of the week. 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 85.67 ct/lb. ICE said that certified stocks are now 34,862 bales, from 33,437 bales yesterday. ICE said that 15 delivery notices were posted against July contracts today and that total deliveries are now 741 contracts.
Chart Trends: Trends in Cotton are up with objectives of 9000 and 9450 December. Support is at 8630, 8450, and 8420 December, with resistance of 9000, 9120, and 9230 December.

DJ On-Call Cotton – Jul 12
As of Jul 6. 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 0 0 0 0 60 -60
Oct 18 0 0 0 0 0 0
Dec 18 52,212 53,786 -1,574 22,146 21,959 187
Mar 19 36,348 35,370 978 2,060 1,987 73
May 19 17,204 16,786 418 208 213 -5
Jul 19 20,152 18,712 1,440 1,301 684 617
Dec 19 12,302 10,896 1,406 14,329 14,203 126
Mar 20 2,576 2,704 -128 208 208 0
May 20 683 683 0 0 0 0
Jul 20 1,035 1,035 0 0 0 0
Dec 20 321 321 0 536 527 9
Total 142,833 140,293 2,540 40,788 39,841 947
Open Change
Int
Jul 18 116 209 -93
Oct 18 126 131 -5
Dec 18 173,906 181,196 -7,290
Mar 19 46,307 46,228 79
May 19 7,291 6,529 762
Jul 19 6,308 5,842 466
Dec 19 18,060 16,619 1,441
Mar 20 229 189 40
May 20 0 0 0
Jun 20 0 0 0
Dec 20 337 334 3
Total 252,680 257,277 -4,597

DJ USDA Supply/Demand: U.S. Cotton – Jul 12
U.S. Cotton Supply and Use
========================================================================
Item 2017/2018 2018/2019
prev Jul 12 prev Jul 12
=========================================================================
Area
Million acres
Planted 12.61 12.61 13.47 * 13.52 **
Harvested 11.10 11.10 11.13 * 10.51 **
Pounds
Yield per harv. acre 905 905 841 * 845 **
Million 480 pound bales
Beginning stocks 2.75 2.75 4.20 4.00
Production 20.92 20.92 19.50 18.50
Imports 0.01 0.01 0.01 0.01
Supply, total 23.68 23.68 23.71 22.51
Domestic use 3.35 3.35 3.40 3.40
Exports 16.00 16.20 15.50 15.00
Use, total 19.35 19.55 18.90 18.40
Unaccounted 0.13 0.13 0.11 0.11
Ending stocks 4.20 4.00 4.70 4.00
Avg. farm price 67.00 – 69.00 68.00 60.00 – 80.00 68.00 – 82.00
=========================================================================

DJ USDA Supply/Demand: World Cotton – Jul 12
World Cotton Supply and Use
(Million 480-pound bales)
=============================================================================
beginning domestic exports ending
stocks prod imports use loss stocks
=============================================================================
2018/19 (Projected)
World
Jun 88.21 120.40 41.06 125.35 41.07 0.22 83.02
Jul 84.96 120.11 41.23 126.95 41.24 0.27 77.84
United States
Jun 4.20 19.50 0.01 3.40 15.50 0.11 4.70
Jul 4.00 18.50 0.01 3.40 15.00 0.11 4.00
Total foreign
Jun 84.01 100.90 41.05 121.95 25.57 0.11 78.32
Jul 80.96 101.61 41.23 123.55 26.24 0.16 73.84
Major exporters
Jun 30.70 55.28 2.17 34.27 21.71 0.02 32.15
Jul 31.20 55.85 2.17 34.42 22.28 0.02 32.50
Major importers
Jun 51.38 42.60 36.42 83.65 2.64 0.09 44.02
Jul 47.83 42.75 36.60 85.10 2.72 0.14 39.22
=============================================================================

DJ USDA Supply/Demand: World Cotton – 2
World Cotton Supply and Use (continued)
(Million 480-pound bales)
=============================================================================
beginning domestic exports ending
stocks prod imports use loss stocks
=============================================================================
2017/18 (Estimated)
World 84.34 123.69 40.15 122.23 40.69 0.30 84.96
United States 2.75 20.92 0.01 3.35 16.20 0.13 4.00
Total Foreign 81.59 102.77 40.14 118.88 24.49 0.17 80.96
Major exporters 25.79 56.85 2.41 32.82 21.02 0.02 31.20
Major importers 54.15 42.94 35.29 82.05 2.35 0.15 47.83
2016/17
World 93.48 106.63 37.66 115.81 37.40 0.21 84.34
United States 3.80 17.17 0.01 3.25 14.92 0.06 2.75
Total Foreign 89.68 89.46 37.65 112.56 22.48 0.15 81.59
Major exporters 22.71 50.69 3.63 31.96 19.27 0.01 25.79
Major importers 65.26 35.86 31.88 76.67 2.04 0.14 54.15
=============================================================================

FCOJ
General Comments: FCOJ was higher once again yesterday in range trading. There is nothing in the Atlantic to cause any concern for crops right now. 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 good-sized 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 0 delivery notices were posted against July contracts this morning and that total deliveries are now 114 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 176.00 September. Support is at 165.00, 163.00, and 160.00 September, with resistance at 170.00, 171.00, and 172.00 September.

COFFEE
General Comments Futures were lower in New York, but higher in London. New York was lower on what appeared to be low volume follow through speculative selling. London was the stronger market on concerns about the potential Vietnamese production. It has been dry there and the cherries could be hurt. Either way, there is not much Robusta on offer in the world markets right now even though supplies in storage in Europe are very high. Brazil weather remains good for harvesting and as production is thought to be very big. The harvest is now about half over. 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. Growing conditions are good.
Overnight News: Certified stocks are higher today and are about 2.050 million bags. The ICO composite price is now 107.41 ct/lb. Brazil will get mostly dry conditions. Temperatures should be below normal this week, then near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get showers. ICE said that 15 delivery notices were posted in New York and that total deliveries for the month are now 1,274 contracts.
Chart Trends: Trends in New York are mixed. Support is at 109.00, 107.00, and 106.00 September, and resistance is at 115.00, 118.00 and 119.00 September. Trends in London are mixed. Support is at 1660, 1640, and 1610 September, and resistance is at 1710, 1730, and 1750 September.

SUGAR
General Comments: Futures were lower in both markets, with New York closing at new contract lows. London closed near the lows of the recent short-term trading range. Ideas of big world production are keeping the speculators from buying. Traders note dry conditions in Brazil, the EU, and Russia, but also note very good conditions in Thailand and India. Brazil producers are also worried about Cane production even with the rapid early harvest. However, there is still a lot of Sugar in the world and the futures price action implies that there is enough movement right now to keep the market well supplied. The dry weather in much of Europe and in southern Russia near the Black Sea has hurt Sugar beets production potential in these areas. India is exporting Sugar again and has a large surplus to move. 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 below normal this week and near to above normal this weekend.
Chart Trends: Trends in New York are down with objectives of 1090 October. Support is at 1090, 1060, and 1030 October, and resistance is at 1140, 1160, and 1180 October. Trends in London are mixed to down with objectives of 328.00 and 316.00 October. Support is at 326.00, 323.00, and 317.00 October, and resistance is at 336.00, 340.00, and 346.00 October.

DJ Oversupply Weighs on Asian Sugar Prices’ Premium — Market Talk
0316 GMT – A record Thai crop and slowing global demand for raw sugar has resulted in a “real dog fight” between Queensland and Thai exporters to sell product across Asia, says Ginette Barrett at Australian sugar marketer QSL. That’s pressuring prices. She notes Thai sugar is trading below the ICE 11 global benchmark, which is down 1.9% today at 11.08 cents/pound. Meanwhile, “with Queensland’s freight disadvantage evident, the traditional Far East premium enjoyed by Queensland exporters for many years is suffering.” Sugar in Asia historically has sold at a premium to global prices due to the region’s production deficit. (lucy.craymer@wsj.com)

DJ USDA Supply/Demand: U.S. Sugar – Jul 12
U.S. Sugar Supply and Use
==============================================================================
Item 2017/2018 2018/2019
prev Jul 12 prev Jul 12
==============================================================================
1,000 short tons, raw value
Beginning stocks 1,876 1,876 1,876 2,011
Production 9,238 9,293 8,961 8,776
Beet sugar 5,221 5,276 5,036 5,036
Cane sugar 4,017 4,017 3,925 3,740
Florida 1,983 1,983 2,085 2,000
Hawaii 0 0 0 0
Louisiana 1,859 1,859 1,680 1,590
Texas 175 175 160 150
Imports 3,387 3,402 3,365 3,560
TRQ 1,788 1,788 1,355 1,539
Other program 300 300 350 350
Other 1,299 1,314 1,660 1,670
Mexico 1,269 1,269 1,645 1,655
Total supply 14,501 14,571 14,203 14,347
Exports 170 170 85 85
Deliveries 12,455 12,390 12,655 12,555
Food 12,300 12,235 12,500 12,400
Other 155 155 155 155
Miscellaneous 0 0 0 0
Total use 12,625 12,560 12,740 12,640
Ending stocks 1,876 2,011 1,463 1,707
Stocks to use ratio 14.9 16.0 11.5 13.5
==============================================================================

COCOA
General Comments futures were mostly lower in both markets yesterday, but September was slightly higher in both markets due to spreading. Trends are sideways in both markets. The outlook for strong production in the coming year has been enough to keep the prices in a short-term range. 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. 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.
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 4.831 million bags. ICE said that 0 notices were posted against July contracts and that total deliveries for the month are now 132 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2400, 2380, and 2340 September, with resistance at 2520, 2540, and 2560 September. Trends in London are mixed. Support is at 1770, 1740, and 1710 September, with resistance at 1850, 1900, and 1920 September.

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