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 lower last week and trends started to turn down on the weekly charts. USDA caught the market by surprise and showed increased supplies for the coming year. The carry in stocks were higher and production was estimated higher at 19.24 million bales. Domestic demand was unchanged, and export demand was increased, but not enough to make up for the bigger supplies. US ending stocks were increased from 4.0 million bales to 4.6 million bales. The world data showed that major exporters would have less Cotton, but the change was not real big. Speculators were the biggest sellers after the reports were released, and they probably have a lot more selling to do this week as they have held major long positions until now. US weather remains good in the Delta and Southeast, but it is still hot and dry from West Texas to the west. World conditions bear watching as there are questions developing about the Indian monsoon. The rains have been below normal, but generally good enough to support crops. However, reports indicate that August should be drier, and that is not good for the country or its agricultural producers. The trade will keep a close eye on the weather there. It will also watch for signs of demand. The weekly export sales reports have been good so far, but China has mostly been absent. The US expects to see increased demand from other countries, and there is talk that China will find a way to buy US Cotton as it will need the quality. The market needs to factor in the higher than expected production and overall supplies first, then the rally might be able to resume.
Overnight News: The Delta and Southeast will see showers move from west to east through Sunday, then mostly dry into next week, and the Southeast will get drier weather through the weekend. Temperatures should be near to above normal. Texas will see mostly dry conditions. Temperatures will be variable. The USDA average price is now 82.07 ct/lb. ICE said that certified stocks are now 20,298 bales, from 20,298 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 8440 and 8200 December. Support is at 8450, 8420, and 8340 December, with resistance of 8610, 8680, and 8720 December.

DJ USDA Crop Production: U.S. All Cotton-Aug 10
Cotton: Area Harvested, Yield, and Production by Type, State,
and United States, 2017 and Forecasted Aug 1, 2018
=============================================================================
Type Area Harvested Yield Production
and ==================================================================
State 2017 2018 2017 2018 2017 2018
=============================================================================
==1,000 Acres== === Pounds === ===== 1,000 Bales =====
Upland
U.S. 10,850.0 9,899.0 895 895 20,223.0 18,456.0
Amer Pima
U.S. 250.4 240.4 1,341 1,555 699.5 779.0
All Cotton
U.S. 11,100.4 10,139.4 905 911 20,922.5 19,235.0
=============================================================================
Cottonseed: Production, United States,
2017-18 and Forecasted Aug 1, 2018
=============================================================================
Production
======================================================================
2017 2018
=========================================================================
1,000 Tons
U.S. 6,422.0 6,021.0
=============================================================================
1/ Production ginned and to be ginned.
2/ 480-pound net weight bales.
1/ Based on a 3-year average lint-seed ratio.

DJ USDA Supply/Demand: U.S. Cotton – Aug 10
U.S. Cotton Supply and Use
========================================================================
Item 2017/2018 2018/2019
prev Aug 10 prev Aug 10
=========================================================================
Area
Million acres
Planted 12.61 12.61 13.52 ** 13.52
Harvested 11.10 11.10 10.51 ** 10.14
Pounds
Yield per harv. acre 905 905 845 ** 911
Million 480 pound bales
Beginning stocks 2.75 2.75 4.00 4.40
Production 20.92 20.92 18.50 19.24
Imports 0.01 0.01 0.01 0.01
Supply, total 23.68 23.68 22.51 23.64
Domestic use 3.35 3.25 3.40 3.40
Exports 16.20 15.85 15.00 15.50
Use, total 19.55 19.10 18.40 18.90
Unaccounted 0.13 0.18 0.11 0.14
Ending stocks 4.00 4.40 4.00 4.60
Avg. farm price 68.00 68.00 68.00 – 82.00 70.00 – 80.00
=========================================================================

DJ USDA Supply/Demand: World Cotton – Aug 10

World Cotton Supply and Use
(Million 480-pound bales)
=============================================================================
beginning domestic exports ending
stocks prod imports use loss stocks
=============================================================================
2018/19 (Projected)
World
Jul 84.96 120.11 41.23 126.95 41.24 0.27 77.84
Aug 84.51 120.53 41.80 127.62 41.82 0.30 77.10
United States
Jul 4.00 18.50 0.01 3.40 15.00 0.11 4.00
Aug 4.40 19.24 0.01 3.40 15.50 0.14 4.60
Total foreign
Jul 80.96 101.61 41.23 123.55 26.24 0.16 73.84
Aug 80.11 101.29 41.79 124.22 26.32 0.16 72.50
Major exporters
Jul 31.20 55.85 2.17 34.42 22.28 0.02 32.50
Aug 30.28 55.34 2.22 34.42 22.39 0.02 31.01
Major importers
Jul 47.83 42.75 36.60 85.10 2.72 0.14 39.22
Aug 47.74 42.95 37.09 85.74 2.66 0.14 39.25
=============================================================================

COT — Supplemental Report – Option and Futures Combined Positions as of August 07, 2018
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COTTON NO. 2 – ICE FUTURES U.S.
CFTC Code #033661 Open Interest is 367,830
: Positions :
: 94,377 7,445 81,072 74,967 250,724 98,670 18,404 349,085 357,644: 18,745 10,186
: Changes from: July 31, 2018 (Change in open interest: 442) :
: -910 651 2,819 551 -3,608 -1,961 851 498 714: -56 -272
: Percent of Open Interest Represented by Each Category of Trader :
: 25.7 2.0 22.0 20.4 68.2 26.8 5.0 94.9 97.2: 5.1 2.8
: Total Traders: 325 Number of Traders in Each Category :
: 144 51 90 61 76 43 16 286 200:
——————————————————————————————————————-

FCOJ
General Comments: FCOJ was lower last week as the weather for crops in Florida remains very good. The daily charts are now showing that prices are fading from resistance areas, and the weekly charts show that prices are fading from the 170.00 area that has held futures in check since Spring of 2017. Short term trends are turning down as the hurricane season has been very quiet so far. Traders are concentrating on the development of the new crop and the weak demand for the old crop. Overall growing conditions in Florida are good to very good, and there is no storm development in the Atlantic at this time. The state is getting frequent periods of showers. Florida producers are seeing good-sized fruit, and work in groves maintenance is active. Irrigation is being used when needed, and producers expect a good crop. A good crop now will likely mean increasing inventories of frozen concentrate. Weaker demand has caused FCOJ inventories in Florida to increase on a year to year basis.
Overnight News: Florida should get scattered showers each day with best amounts and coverage today. 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 162.00, 160.00, and 156.00 September. Support is at 160.00, 158.00, and 156.00 September, with resistance at 165.00, 167.00, and 170.00 September.

Disaggregated Commitments of Traders Options and Futures Combined Positions as of August 7, 2018
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
FRZN CONCENTRATED ORANGE JUICE – ICE FUTURES U.S. (CONTRACTS OF 15,000 POUNDS) :
CFTC Code #040701 Open Interest is 18,360 :
: Positions :
: 5,766 13,280 1,105 100 0 6,177 239 172 380 1,039 2,137 :
: Changes from: July 31, 2018 :
: 55 -155 -18 -3 0 -34 -1 100 -6 89 10 :
: Percent of Open Interest Represented by Each Category of Trader :
: 31.4 72.3 6.0 0.5 0.0 33.6 1.3 0.9 2.1 5.7 11.6 :
: Number of Traders in Each Category Total Traders: 77 :
: 19 19 4 . 0 22 . 4 9 12 15 :
—————————————————————————————————————-

COFFEE
General Comments Futures were lower again on Friday. Futures in New York have been testing support at the recent contract lows. London charts show down trends on the weekly charts as well. Price action in New York is bad and trends have turned back to down. Ideas of strong production in Brazil and Vietnam are keeping futures under selling pressure. Arabica trees in Brazil were starting to show stress due to the lack of rain over the last few months. Some rain was reported a week ago, but it has not rained since and there are concerns about some premature flowering that could affect trees. The flowers could abort and cause at least a slight loss in production. It will be dry again for the rest of the week. The months leading up to the Winter were also dry, and that early dryness is affecting trees now. It is very possible that some production could be lost for next crop due to the very dry overall conditions. Estimates for production this year range as high as 60 million bags. Central American is also dry in some areas and some production losses are increasingly expected. Most of Central America is reporting good rains, so the overall losses could be minimal. London remains relatively strong as Vietnamese production is not moving. There is not much Robusta on offer in the world markets right now even though supplies in storage in Europe are very high. It has been dry in Vietnam, but better rains are reported to be improving crop conditions now and production estimates are very high at about 30 million bags. Domestic prices were firmer in the last week on very light farm selling.
Overnight News: Certified stocks are higher today and are about 2.074 million bags. The ICO composite price is now 105.22 ct/lb. Brazil will get mostly dry conditions. Temperatures should be variable. 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 no objectives. Support is at 106.00, 103.00, and 100.00 September, and resistance is at 110.00, 115.00 and 118.00 September. Trends in London are mixed. Support is at 1630, 1610, and 1580 September, and resistance is at 1680, 1710, and 1720 September.

DJ Brazil Coffee Exports Jumped in July as Robusta Sales Soared
By Jeffrey T. Lewis
SAO PAULO–Brazilian coffee exports rose in July from a year earlier as sales abroad of the robusta variety soared, according to exporters group Cecafe.
The South American country exported 2.3 million 132-pound bags of coffee last month, an increase of 24.2% from the same month a year earlier, Cecafe said Thursday.
Sales abroad of the arabica variety of coffee rose 5.8% from a year earlier to 1.7 million bags, while exports of robusta beans rose to 366,663 bags from 19,826 bags in July of last year.
A drought in the Brazilian state of Espírito Santo, which produces most of the country’s robusta beans, hit production in 2016 and 2017, and exports of the variety are only now recovering after the rain returned.
Exports of roasted, ground and instant coffee rose 5.2% in July to 291,233 bags, Cecafe said.

COT — Supplemental Report – Option and Futures Combined Positions as of August 07, 2018
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COFFEE C – ICE FUTURES U.S.
CFTC Code #083731 Open Interest is 395,258
: Positions :
: 38,942 136,040 104,412 154,554 116,143 77,218 29,212 375,126 385,807: 20,133 9,452
: Changes from: July 31, 2018 (Change in open interest: 5,536) :
: 111 8,586 -2,903 5,941 -1,421 895 130 4,045 4,392: 1,492 1,144
: Percent of Open Interest Represented by Each Category of Trader :
: 9.9 34.4 26.4 39.1 29.4 19.5 7.4 94.9 97.6: 5.1 2.4
: Total Traders: 569 Number of Traders in Each Category :
: 197 161 170 140 112 42 24 463 396:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 08/07/2018
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Robusta Coffee Futures and Options – ICE Futures Europe
154,184 101,255 69,959 8,664 7,658 3,196
Percent of Open Interest Represented by Each Category of Trader
100.0% 65.7% 45.4% 5.6% 5.0% 2.1%
Number of Traders in Each Category
162 57 47 13 6 11
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
9,292 42,997 11,348 1,120 930 12,567
Percent of Open Interest Represented by Each Category of Trader
6.0% 27.9% 7.4% 0.7% 0.6% 8.2%
Number of Traders in Each Category
14 39 18 13 6 19
Nonreportable Positions
=======================
Long Short
=======================
6,742 5,529
Percent of Open Interest Represented by Each Category of Trader
4.4% 3.6%

SUGAR
General Comments: New York and London both closed lower and London made new lows for the move. New York price action overall is weak as futures are still near the recent lows. Ideas of big world production are bearish Dry conditions continue in Brazil, the EU, and Russia. Very good conditions are reported in Thailand and India, but there are forecasts that the Indian monsoon could produce less rain than normal this month. Crops could get stressed quickly in the heat of the country. Brazil producers are also worried about Cane production even with the rapid early harvest, and the market is now starting to talk about less production there this year. UNICA showed a reduced crush in its latest biweekly report, so the fears of less production could become fact in the next few weeks if the trend to lower processing of the cane continues. The dry weather in much of Europe and in southern Russia near the Black Sea has hurt Sugar beets production potential in these areas. Recent rains in parts of Ukraine have improved production prospects there.
Overnight News: Brazil will get dry weather. Temperatures should be variable.
Chart Trends: Trends in New York are mixed to down with objectives of 1040 and 990 October. Support is at 1040, 1030, and 1000 October, and resistance is at 1090, 1110, and 1140 October. Trends in London are mixed. Support is at 311.00, 308.00, and 305.00 October, and resistance is at 324.00, 329.00, and 330.00 October.

COT — Supplemental Report – Option and Futures Combined Positions as of August 07, 2018
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SUGAR NO. 11 – ICE FUTURES U.S.
CFTC Code #080732 Open Interest is 1,174,150
: Positions :
: 142,957 282,657 251,618 334,902 454,479 360,768 108,861 1,090,246 1,097,615: 83,904 76,535
: Changes from: July 31, 2018 (Change in open interest: 1,226) :
: -385 -1,615 4,836 933 -3,773 -1,866 4,687 3,517 4,135: -2,291 -2,909
: Percent of Open Interest Represented by Each Category of Trader :
: 12.2 24.1 21.4 28.5 38.7 30.7 9.3 92.9 93.5: 7.1 6.5
: Total Traders: 272 Number of Traders in Each Category :
: 58 86 83 81 72 33 19 226 211:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 08/07/2018
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE White Sugar Futures and Options- ICE Futures Europe
107,212 41,490 70,304 22,147 1,449 692
Percent of Open Interest Represented by Each Category of Trader
100.0% 38.7% 65.6% 20.7% 1.4% 0.6%
Number of Traders in Each Category
154 50 61 14 3 10
Reportable Positions
===============================================================================
Managed Money Other Reportables

Long Short Spreading Long Short Spreading
===============================================================================
22,573 16,968 8,802 4,007 1,615 3,141
Percent of Open Interest Represented by Each Category of Trader
21.1% 15.8% 8.2% 3.7% 1.5% 2.9%
Number of Traders in Each Category
22 21 19 9 8 12
Nonreportable Positions
=======================
Long Short
=======================
4,359 4,240
Percent of Open Interest Represented by Each Category of Trader
4.1% 4.0%

DJ Brazil Center-South Sugar Crush Down 7% at 47.3M Tons in 2 H July–Unica
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the second half of July compared with a year earlier, according to industry group Unica.
Center-south mills crushed 47.3 million metric tons of cane in the period, a decrease of 7% from the same period a year earlier. They produced 2.6 million tons of sugar, down 23.7%, and made 2.6 billion liters of ethanol, an increase of 24.7%.
The production mix for the second half of last month was 38.5% sugar to 61.5% ethanol. A year earlier, the mix was 50.35% sugar and 49.65% ethanol. Low prices for sugar on world markets is encouraging mill owners to boost output of ethanol this year, at the expense of sugar production.
Brazil is the world’s biggest sugar producer and exporter, and the center-south grows about 90% of the country’s cane.
In the season from April 1 through Aug. 1, mills in the region crushed 314.8 million tons of cane, up 5.5% from the same period a year earlier. Sugar production fell 16.3% to 14.8 million tons, and ethanol output rose 38.3% to 16.1 billion liters.
The production mix for the season through Aug. 1 was 36.5% sugar to 63.5% ethanol. A year earlier, the mix was 48.45% sugar and 51.55% ethanol.

COCOA
General Comments Futures mixed on Friday and were a little higher for the week. The weekly charts show that futures might be making a bottom at this time as there is a potential double bottom now showing on those charts. Ideas of big world production have kept futures on the defensive. The outlook for strong production in the coming year has been enough to keep the prices weak. The main crop harvest is in its earliest stages in some parts of West Africa, but will not rally get going for at least another month. Main crop production ideas for Ivory Coast are still near 2.0 million tons even with the big rains. Ghana and Nigeria are expecting very good crops this year as well. Ideas that current weather conditions are good for the next crops in West Africa continue. There have been reports of good rains throughout the region and big yields are possible. 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. Temperatures will average near normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 4.507 million bags.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 2040, 1990, and 1960 September, with resistance at 2150, 2200, and 2240 September. Trends in London are mixed to down with no objectives. Support is at 1510, 1480, and 1450 September, with resistance at 1580, 1600, and 1650 September.

COT — Supplemental Report – Option and Futures Combined Positions as of August 07, 2018
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COCOA – ICE FUTURES U.S.
CFTC Code #073732 Open Interest is 285,753
: Positions :
: 37,242 44,689 62,884 124,481 143,296 48,592 23,756 273,200 274,626: 12,553 11,127
: Changes from: July 31, 2018 (Change in open interest: -16,851) :
: -7,093 4,478 501 1,861 -20,123 -12,529 -2,918 -17,260 -18,061: 408 1,210
: Percent of Open Interest Represented by Each Category of Trader :
: 13.0 15.6 22.0 43.6 50.1 17.0 8.3 95.6 96.1: 4.4 3.9
: Total Traders: 222 Number of Traders in Each Category :
: 63 65 80 43 39 28 16 176 171:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 08/07/2018
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Cocoa Futures and Options – ICE Futures Europe

307,246 168,893 191,963 27,668 21,109 24,729
Percent of Open Interest Represented by Each Category of Trader ]
100.0% 55.0% 62.5% 9.0% 6.9% 8.0%
Number of Traders in Each Category
166 54 48 15 9 13
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
28,555 13,887 21,503 1,940 1,052 29,574
Percent of Open Interest Represented by Each Category of Trader
9.3% 4.5% 7.0% 0.6% 0.3% 9.6%
Number of Traders in Each Category
25 21 14 11 12 23
Nonreportable Positions
=======================
Long Short
=======================
4,384 3,430
Percent of Open Interest Represented by Each Category of Trader
1.4% 1.1%

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