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 a little lower for the week in choppy trading. US production ideas are lower after the extreme weather seen in Texas this year, and many analysts now expect total US production below 19 million bales. US weather remains good in the Delta and Southeast, and has improved slightly in West Texas on north into Kansas with improved precipitation. Even so, the crop is generally in poor condition in much of Texas and there are real questions on just how good the yield can be in the state this year. The harvest has been active in far southern parts of the state. Crop scout reports indicate that the yield potential should be generally poor. Eastern Texas crops are in good condition and about ready for harvest. Bolls are opening in the Delta and Southeast. The Carolinas will see some major rains and big winds from Hurricane Florence. Florence is on  its way to becoming a major hurricane. Current weather patterns suggest that the storm will stall once getting on shore. That could mean extreme amounts of rain from parts of Georgia to parts of Virginia starting late this week. Cotton will most likely be damaged or destroyed. The trade is monitoring the weekly Cotton Classing report for clues on yields and also quality. The reports are showing that just over half of the arrivals were tenderable. Classing data has been improving as the harvest starts to expand. Rains from the Indian monsoon have been below normal, but generally good enough to support crops. The trade there remains optimistic that a good crop is coming and that they will not need to import very much Cotton this year. China has been active in India buying and will buy as much as possible there to make up for production losses inside of China. Conditions have also improved in Pakistan as rains have been reported.
Overnight News: Drier this week in the Delta, but showers in the Southeast and big storms from hurricane Florence starting midweek. Temperatures should be near to above normal. Texas will have mostly dry conditions. Temperatures will be above normal. The USDA average price is now 78.42 ct/lb. ICE said that certified stocks are now 20,017 bales, from 19,935 bales yesterday. USDA said that net Upland Cotton export sales were 92,200 bales this year and 0 bales next year. Net Pima sales were 10,500 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 8120, 8000, and 7960 December, with resistance of 8340, 8420, and 8610 December.

Wire: Bloomberg News (BN) Date: Sep 7 2018 12:15:00
Cotton Production, Inventory Survey Before USDA WASDE Report
By Dominic Carey
(Bloomberg) — The following table shows results of a Bloomberg News survey
of as many as eight analysts for the USDA’s World Agricultural Supply and Demand
report on the 2018-19 cotton crop, which is scheduled for release at noon in
Washington on Sept. 12. Figures are in millions of bales.
*T
================================================================
|——–Survey Results———| USDA
2018-19:| Avg | Low | High | Aug.
================================================================
US Production | 19.12| 18.75| 19.54| 19.24
US Exports | 15.43| 15.10| 15.75| 15.50
US End Stocks | 4.58| 4.25| 5.00| 4.60
World Production | 120.51| 119.83| 122.00| 120.53
World Consumption | 127.59| 126.50| 129.00| 127.62
World End Stocks | 77.23| 75.50| 79.50| 77.10
*T
*T
================================================================================
Analyst |————-U.S.————–| World
| | | End
Estimates: | Production | Exports |Stocks | Production | Consumption |Stocks
================================================================================
Doane | 19.50| 15.75| 4.60| 120.00| 129.00| 75.50
Love | | | | | |
Consulting | 18.90| 15.50| 4.30| 120.00| 128.00| 76.50
Price Futures| | | | | |
Group | 19.05| 15.10| 4.90|n/a |n/a |n/a
Rabobank | 19.00| 15.20| 4.50| 120.70| 127.00| 76.70
Rose | | | | | |
Consulting | 18.75| 15.50| 4.25| 119.83| 128.00| 76.34
Texas A&M; | | | | | |
Robinson | 19.24| 15.50| 4.60| 120.53| 127.62| 77.10
Varner Bros. | 19.54| 15.40| 5.00| 122.00| 127.00| 79.50
Wedbush | | | | | |
Securities | 19.00| 15.50| 4.50| 120.50| 126.50| 79.00
*T
SOURCE: Bloomberg News

DJ USDA Volume of Cotton Classed Report – Sep 7
Data quoted in bales for week ending Sep 6. Totals may not add due
to rounding. * denotes data withheld to avoid disclosure of individual
producer information. Source: USDA
Weekly Season Weekly Season
Southeast 0 0 Southwest 106,158 492,788
NC – – Okla – 501
SC – – Texas 106,158 492,287
Ga – – Kansas – –
Ala – –
Fla – – Far West 0 0
Va – – NM – –
Ariz* – –
Delta 0 0 Calif – –
Miss – –
Tenn – – Pima – –
Mo – – Other – –
Ark – – Total US 106,158 492,788
La – – pct tenderable 68.2 55.2

COT — Supplemental Report – Option and Futures Combined Positions as of September 04, 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 341,012
: Positions :
: 73,012 10,954 72,035 81,678 228,314 98,015 18,098 324,739 329,401: 16,273 11,611
: Changes from: August 28, 2018 (Change in open interest: 3,770) :
: -2,594 1,461 4,055 1,738 -3,432 358 387 3,556 2,471: 214 1,299
: Percent of Open Interest Represented by Each Category of Trader :
: 21.4 3.2 21.1 24.0 67.0 28.7 5.3 95.2 96.6: 4.8 3.4
: Total Traders: 306 Number of Traders in Each Category :
: 128 52 91 58 73 43 16 266 201:
——————————————————————————————————————-

FCOJ
General Comments: FCOJ was firm last week in range trading as the hurricane season started to get much busier. The Summer has been a quiet one in the Atlantic, but all that changed last week as one storm brushed Florida and another appeared headed to the middle of the north Atlantic Ocean. There are other systems developing that could impact Florida in the next week or so. Chart trends are mixed as the market has found some support from speculators due to the increase in storm activity. 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.. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to above normal temperatures. ICE said that 149 notices were posted today for delivery against September Contracts and that total deliveries for the month are 149 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 155.00, 153.00, and 152.00 November, with resistance at 159.00, 163.00, and 165.00 November.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of September 4, 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 15,720 :
: Positions :
: 7,744 10,377 1,265 0 0 1,647 787 553 763 675 2,007 :
: Changes from: August 28, 2018 :
: -325 -472 -14 0 0 -201 304 61 31 -195 264 :
: Percent of Open Interest Represented by Each Category of Trader :
: 49.3 66.0 8.0 0.0 0.0 10.5 5.0 3.5 4.9 4.3 12.8 :
: Number of Traders in Each Category Total Traders: 66 :
: 19 14 5 0 0 13 6 6 9 8 13 :
—————————————————————————————————————-

COFFEE
General Comments: : Futures were higher last week and held the lows on the weekly charts set a couple of weeks ago. London charts show down trends on the weekly charts. Ideas of strong production in Brazil and Vietnam are keeping futures under selling pressure. Speculators have been looking at the weakness of the Brazilian Real against the US Dollar and have been selling Coffee on ideas of increased offers in Brazil. Vietnam is getting close to its next harvest, and ideas are that producers there need to sell more of the previous crop to create new storage space. Producers in both countries are not selling, although some talk of some big sales in Brazil. But, the market is generally quiet there due to the after effects of the truckers strike. The strike resulted in sharp increases in freight costs and shut off farm selling interest. Arabica trees in Brazil were starting to show stress due to the lack of rain over the last few months. 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. Most of Central America is reporting good rains, so the overall losses could be minimal. Production in Vietnam is estimated at above 30 million bags and a new record. Growing conditions are called good.
Overnight News: Certified stocks are higher today and are about 2.250 million bags. The ICO composite price is now 98.80 ct/lb. Brazil will get mostly dry conditions. Temperatures should be near to mostly above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get showers. ICE New York deliveries were 0 contracts for today and now total 1,053 contracts for the month.
Chart Trends: Trends in New York are mixed. Support is at 100.00, 99.00, and 96.00 December, and resistance is at 105.00, 107.00 and 108.00 December. Trends in London are down with objectives of 1470 November. Support is at 1470, 1450, and 1420 November, and resistance is at 1520, 1540, and 1560 November.

DJ ICO Monthly Report Echoes Coffee Price Plunge
By David Hodari
LONDON–The International Coffee Organization’s composite indicator price plunged to a 57-month low in August, falling 20.1% on-the-year.
The ICO composite indicator dropped to 102.41 U.S. cents a pound from 107.20 U.S. cents in July –the metric’s lowest level since November 2013.
Prices for all groups of arabica coffee fell for the third consecutive month. Among arabica types, Brazilian naturals plunged 5.5%, with other mild down 4.1% and Colombian mild prices decreasing 2.9%. Robusta beans also dropped heavily, falling 4.4%.
The arbitrage between low-grade robusta and its higher-quality peer dropped 6%, while intraday volatility climbed 5.2%, the report said.
Total exports in July rose to 10.11 million bags from 9.66 million bags in the same month in 2017.
World production in 2017-18 is estimated at 158.6 million bags, 0.3% lower than last year, with arabica output expected to decline by 6.6% to 97.16 million bags, while robusta production is predicted to grow by 11.5% to 61.40 million bags, the report said.
London-traded robusta was last down 0.07% at $1,490 a ton, and arabica was up 0.24% at $1.02 a pound, to sit 0.59% higher week-to-date.

Vietnam 2018-19 Coffee Output May Fall 3.4% to 28.5m Bags: Group
By Mai Ngoc Chau
(Bloomberg) —
Coffee production in Vietnam, the world’s biggest robusta grower, may drop from est. 29.5m bags of 60 kilograms each in 2017-18, says Luong Van Tu, chairman of Vietnam Coffee and Cocoa Association.
Lower output forecast partially due to shrinking coffee area following weaker prices, Tu says in email to Bloomberg
Some growers have switched to more remunerative trees such as avocados, durian that are estimated to provide 3-4 times returns of coffee
About 20% of premature coffee fruits in Gia Lai province dropped this year due to prolonged rain; more than 10% fall recorded in other Central Highlands provinces
Cycle of low-output season after bumper production seen repeated in 2018-19, Tu says
Coffee exports may total 400,000 tons in Sept.-Dec.
NOTE: Jan.-Aug. coffee shipments seen at 1.32m tons, up 15.5% y/y, according to Ministry of Agriculture and Rural Development
Domestic prices at 3-year low, below production costs
Rising labor costs, fertilizer and fuel prices causing difficulties for coffee planters
NOTE: Vietnam Coffee Growers Expecting Record Crop in Coming Season

DJ Not Much Brewing for India’s Coffee Exports — Market Talk
0623 GMT – India’s coffee exports remained even with year-earlier levels last month, with some shipments being delayed due to flooding in key producing areas. Through August, exports for 2018 were 262,764 tons, with nearly 20,000 more being held up amid crop damage and roads connecting ports to the hilly coffee-growing region being washed away, said Ramesh Rajah, head of the Coffee Exporters Association of India. “The drop will widen in the coming months,” he added while predicting that India’s coffee production for the year starting Oct. 1 might be about 25% lower than the 316,000 metric tons estimated by the state-run Coffee Board. India, the world’s 6th-biggest coffee producer, exports 3/4 of its output.

COT — Supplemental Report – Option and Futures Combined Positions as of September 04, 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 385,063
: Positions :
: 37,076 142,412 106,113 149,912 99,548 71,947 28,297 365,048 376,370: 20,014 8,693
: Changes from: August 28, 2018 (Change in open interest: 12,601) :
: -2,494 965 7,104 7,351 4,014 68 889 12,029 12,972: 572 -371
: Percent of Open Interest Represented by Each Category of Trader :
: 9.6 37.0 27.6 38.9 25.9 18.7 7.3 94.8 97.7: 5.2 2.3
: Total Traders: 555 Number of Traders in Each Category :
: 185 166 158 135 101 42 24 446 375:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/04/2018
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Robusta Coffee Futures and Options – ICE Futures Europe
162,063 100,592 64,073 10,245 9,521 2,713
Percent of Open Interest Represented by Each Category of Trader
100.0% 62.1% 39.5% 6.3% 5.9% 1.7%
Number of Traders in Each Category
168 57 41 11 7 7
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
14,138 50,478 13,204 1,062 2,826 13,233
Percent of Open Interest Represented by Each Category of Trader
8.7% 31.1% 8.1% 0.7% 1.7% 8.2%
Number of Traders in Each Category
17 44 14 10 10 18
Nonreportable Positions
=======================
Long Short
=======================
6,876 6,015
Percent of Open Interest Represented by Each Category of Trader
4.2% 3.7%

SUGAR
General Comments: New York and London were higher. Both markets are still showing that prices have made short-term lows and that a further short covering rally is possible. The moves come as October deliveries are not that far away, and some of the spec buying could be tied to covering of big October short positions. There are uneven weather conditions in important growing areas. Dry conditions continue in Brazil, the EU, and Russia, but conditions are mostly good in Ukraine. Very good conditions are reported in Thailand and India. Dry weather in much of Europe and in southern Russia near the Black Sea has hurt Sugar beets production potential in these areas.
Overnight News: Brazil will get dry weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1220 and 1290 March. Support is at 1150, 1130, and 1110 March, and resistance is at 1190, 1210, and 1230 March. Trends in London are up with objectives of 358.00 and 389.00 December. Support is at 328.00, 320.00, and 315.00 December, and resistance is at 335.00, 339.00, and 342.00 December.

COT — Supplemental Report – Option and Futures Combined Positions as of September 04, 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 1,169,954
: Positions :
: 110,658 306,359 260,869 362,722 428,197 351,561 97,349 1,085,810 1,092,774: 84,143 77,180
: Changes from: August 28, 2018 (Change in open interest: -39,665) :
: -3,842 -866 -24,948 4,904 -6,423 -8,124 -8,346 -32,010 -40,583: -7,655 918
: Percent of Open Interest Represented by Each Category of Trader :
: 9.5 26.2 22.3 31.0 36.6 30.0 8.3 92.8 93.4: 7.2 6.6
: Total Traders: 281 Number of Traders in Each Category :
: 59 91 95 86 71 33 20 239 220:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/04/2018
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE White Sugar Futures and Options- ICE Futures Europe
109,038 40,711 73,504 24,020 1,461 440
Percent of Open Interest Represented by Each Category of Trader
100.0% 37.3% 67.4% 22.0% 1.3% 0.4%
Number of Traders in Each Category
146 47 58 12 3 7
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
22,186 16,031 10,589 3,776 1,719 1,938
Percent of Open Interest Represented by Each Category of Trader
20.3% 14.7% 9.7% 3.5% 1.6% 1.8%
Number of Traders in Each Category
27 17 20 8 8 9
Nonreportable Positions
=======================
Long Short
=======================
5,379 3,357
Percent of Open Interest Represented by Each Category of Trader
4.9% 3.1%

COCOA
General Comments Futures closed lower in both markets on Friday and were lower for the week. Both markets act a little overbought as bullish traders have not been able to extend gains all week. Prices are still in a very short-term trading range. 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 high. Ghana and Nigeria are expecting very good crops this year as well. Conditions also appear good in East Africa and Asia.
Overnight News: Scattered showers and storms are expected in West Africa, with heavy amounts of precipitation possible. Temperatures will average near to below 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 4.409 million bags. ICE said that 0 notices were posted for September delivery today and that total deliveries for the month are now 283 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2250, 2220, and 2190 December, with resistance at 2340, 2370, and 2400 December. Trends in London are mixed. Support is at 1630, 1610, and 1590 December, with resistance at 1700, 1740, and 1760 December.

COT — Supplemental Report – Option and Futures Combined Positions as of September 04, 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 282,441
: Positions :
: 47,064 54,132 55,996 112,173 143,270 56,713 21,200 271,946 274,597: 10,495 7,844
: Changes from: August 28, 2018 (Change in open interest: 2,881) :
: -361 617 103 -101 3,068 3,772 153 3,412 3,940: -531 -1,059
: Percent of Open Interest Represented by Each Category of Trader :
: 16.7 19.2 19.8 39.7 50.7 20.1 7.5 96.3 97.2: 3.7 2.8
: Total Traders: 220 Number of Traders in Each Category :
: 71 58 68 44 39 30 13 182 149:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/04/2018
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Cocoa Futures and Options – ICE Futures Europe
305,151 185,610 181,706 19,757 28,024 23,339
Percent of Open Interest Represented by Each Category of Trader
100.0% 60.8% 59.5% 6.5% 9.2% 7.6%
Number of Traders in Each Category
168 50 46 15 12 12
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
28,653 27,626 16,398 3,500 648 23,471
Percent of Open Interest Represented by Each Category of Trader
9.4% 9.1% 5.4% 1.1% 0.2% 7.7%
Number of Traders in Each Category
28 21 12 13 10 18
Nonreportable Positions
=======================
Long Short
=======================
4,422 3,939
Percent of Open Interest Represented by Each Category of Trader
1.4% 1.3%

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