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 as Hurricane Florence aimed for the Carolinas. USDA increased production estimates on Wednesday due to increased area as yields were lower. The trade had expected a slight decrease in production. It also increased exports and forecast only a slight increase in ending stocks despite the increased production. World data showed few changed. These estimates could be subject to change due to the arrival of Hurricane Florence over the weekend. The storm is expected to cause significant damage and losses to crops from Virginia to Georgia. Weakness came as the trade once again focussed on Chinese demand amid new threats by the Trump administration to ramp up tariffs on Chinese goods. China has said it will respond in kind, and that has been bad news for US Ag markets. However, the US yesterday offered to meet in China with the government there in an effort to get talks started again and to try to avoid further trade war escalation. More storms are forming in the Atlantic that could bear down on other Cotton growing areas. The Carolinas will see some major rains and big winds from Hurricane Florence. 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. 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.
Overnight News: Drier through this weekend in the Delta, but showers in the Southeast and big storms from hurricane Florence starting late this week and through the weekend. Temperatures should be near to above normal. Texas will have mostly dry conditions. Temperatures will be above normal. The USDA average price is now 79.05 ct/lb. ICE said that certified stocks are now 20,893 bales, from 20,435 bales yesterday. USDA said that net Upland Cotton export sales were 81,700 bales this year and 17,700 bales next year. Net Pima sales were 5,800 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 8200, 8160, and 8120 December, with resistance of 8390, 8420, and 8610 December.

U.S. Cotton Supply and Use 1/
================================================================================
2016/17 2017/18 Est. 2018/19 Proj. 2018/19 Proj.
Item Aug Sep
================================================================================
Million Acres
Planted 10.07 12.61 13.52 14.04
Harvested 9.51 11.10 10.14 10.55
Pounds
Yield per Harvested
Acre 867 905 911 895
Million 480 Pound Bales
Beginning Stocks 3.80 2.75 4.40 4.30
Production 17.17 20.92 19.24 19.68
Imports 0.01 0.00 0.01 0.01
Supply, Total 20.98 23.68 23.64 23.99
Domestic Use 3.25 3.23 3.40 3.40
Exports, Total 14.92 15.85 15.50 15.70
Use, Total 18.17 19.07 18.90 19.10
Unaccounted 2/ 0.06 0.30 0.14 0.19
Ending Stocks 2.75 4.30 4.60 4.70
Avg. Farm Price 3/ 68.0 68.0 70.00-80.00 70.00-80.00
================================================================================

World Cotton Supply and Use 1/
(Million 480-Pound Bales)
================================================================================
Supply Use
Region Beginning Produc- Loss Ending
Stocks tion Imports Domestic Exports 2/ Stocks
================================================================================
2018/19 Proj.
World
Aug 84.51 120.53 41.80 127.62 41.82 0.30 77.10
Sep 83.79 121.97 41.79 127.94 41.80 0.35 77.46
United States
Aug 4.40 19.24 0.01 3.40 15.50 0.14 4.60
Sep 4.30 19.68 0.01 3.40 15.70 0.19 4.70
Total Foreign
Aug 80.11 101.29 41.79 124.22 26.32 0.16 72.50
Sep 79.49 102.29 41.79 124.54 26.10 0.16 72.76
Major Exporters 4/
Aug 30.28 55.34 2.22 34.42 22.39 0.02 31.01
Sep 29.49 55.33 2.22 34.72 22.14 0.02 30.16
Major Importers 8/
Aug 47.74 42.95 37.09 85.74 2.66 0.14 39.25
Sep 47.95 43.95 37.09 85.74 2.71 0.14 40.41
2016/17
World 93.44 106.63 37.69 116.12 37.65 0.21 83.79
United States 3.80 17.17 0.01 3.25 14.92 0.06 2.75
Total Foreign 89.64 89.46 37.69 112.87 22.73 0.15 81.04
Major Exporters 4/ 22.68 50.69 3.63 32.26 19.52 0.01 25.21
Major Importers 8/ 65.26 35.86 31.91 76.66 2.03 0.14 54.20
2017/18 Est.
World 83.79 123.48 40.92 123.22 40.71 0.47 83.79
United States 2.75 20.92 3/ 3.23 15.85 0.30 4.30
Total Foreign 81.04 102.56 40.91 120.00 24.86 0.17 79.49
Major Exporters 4/ 25.21 56.67 2.49 33.42 21.44 0.02 29.49
Major Importers 8/ 54.20 42.94 35.80 82.50 2.35 0.15 47.95

FCOJ
General Comments: FCOJ was lower yesterday as the Gulf of Mexico is still quiet and as the Atlantic hurricanes could miss the state. The hurricane season started to get much busier, and some of the storms now in the ocean could impact the state over the next week or so.. 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, but so far the track of these storms is unclear. Chart trends are mixed as the market has found some support from speculators due to the increase in storm activity. Florida is getting frequent periods of showers. Florida producers are seeing good-sized fruit, and work in groves maintenance is active. Some of the fruit is now tennis ball sized.
Overnight News: Florida should get mostly dry conditions. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to above normal temperatures. ICE said that 0 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 153.00, 152.00, and 151.00 November, with resistance at 156.00, 159.00, and 160.00 November.

DJ USDA Crop Production: U.S. Citrus Fruits-Sep 12
Utilized Production of Citrus Fruits by Crop – States
and United States: 2017-2018,
and Forecasted September 1, 2018
(The crop year begins with the bloom of the first year shown and ends
with the completion of harvest the following year.)
=========================================================================
Utilized Production Utilized production
Boxes Ton Equivalent
Crop and State ========================================================-
2017-2018 2018-2019 2017-2018 2018-2019
=========================================================================
=== 1,000 boxes === ===- 1,000 tons ===
California, all 45,400 1,816
Valencia 9,500 380
Florida, all 44,950 2,023
Valencia 26,000 1,170
Texas, all 1,880 80
Valencia 350 15
United States, all 92,230 3,919
Valencia 35,850 1,565
===========================================================================
1/ Net pounds per box: California-80, Florida-90, Texas-85.
2/ Navel and miscellaneous varieties in California. Early (including Navel)
and midseason varieties in Florida and Texas.

COFFEE
General Comments: : Futures higher in both markets. Futures continue to hold support and the charts suggest that lows could be trying to form once again. World demand remains soft even though prices have been weakening as no one wants to pay too much. Ideas of strong production in Brazil and Vietnam along with weakening emerging market currencies 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. This relationship did not work well yesterday as the Real was lower while Coffee was higher. 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. 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 today, then some beneficial showers are expected. 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 2.287 million bags. The ICO composite price is now 99.85 ct/lb. Brazil will get mostly dry conditions today and tomorrow, then some showers and storms. 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 10 contracts for today and now total 1,063 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 mixed. Support is at 1490, 1470, and 1450 November, and resistance is at 1520, 1540, and 1560 November.

DJ Ugandan Indicative Robusta Coffee Export Prices for Sept. 13
By Nicholas Bariyo
KAMPALA, Uganda–Below are the indicative cash export prices for Ugandan robusta coffee as provided by the Uganda Coffee Development Authority, or UCDA, on Thursday.
Grade Nearby Prices
Screen 18 71.99 (74.90)
Screen 15 66.99 (68.90)
Screen 12 63.99 (65.90)
*All prices are in U.S. cents for a pound of beans. Prices in brackets are the ones quoted by the UCDA two weeks ago.
Nearby delivery means within 45 days. Prices include transport costs to the Kenyan port of Mombasa, but not shipping costs.

DJ Brazil Exported 3.4 Million Bags of Coffee in August — Update
By Jeffrey T. Lewis
SAO PAULO–Brazilian coffee exports rose in August from a year earlier as sales abroad of robusta beans soared, according to exporters group Cecafe.
The South American country exported 3.4 million 132-pound bags of coffee last month, an increase of 30.4 percent from the same month a year earlier, Cecafe said Wednesday.
Sales abroad of the arabica variety of coffee rose 11.6% to 2.5 million bags, while exports of robusta beans rose to 537,428 bags last month, from 29,972 in Aug., 2017.
A drought in the Brazilian state of Espirito Santo, which grows most of the country’s robusta beans, hit production for two years in a row, and the crop, and exports, are now recovering.
Exports of roasted, ground and instant coffee rose 7.9% to 329,377

SUGAR
General Comments: New York and London were higher as the weather remained dry in Brazil. Producers there say that more rain is needed for planting and for maintaining the condition of the current crop. Some precipitation is possible through the weekend. Additional crop losses could be possible if the rains do not arrive soon. Both markets are still showing that prices have made short-term lows and that a further short covering rally is possible. New York has moved through initial targets for the move up, but could run closer to 1300 March. London still has a way to go before hitting its targets to the upside. 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 1290 March. Support is at 1190, 1170, and 1150 March, and resistance is at 1250, 1270, and 1290 March. Trends in London are up with objectives of 358.00 and 389.00 December. Support is at 340.00, 335.00, and 334.00 December, and resistance is at 348.00, 353.00, and 358.00 December.

U.S. Sugar Supply and Use 1/
================================================================================
2016/17 2017/18 Est. 2018/19 Proj. 2018/19 Proj.
Item Aug Sep
================================================================================
1000 Short Tons, Raw Value
Beginning Stocks 2054 1876 2103 2072
Production 2/ 8969 9255 9088 9328
Beet Sugar 5103 5245 5107 5343
Cane Sugar 3866 4011 3981 3985
Florida 2055 1983 2050 2050
Hawaii 43 0 0 0
Louisiana 1628 1859 1781 1785
Texas 140 169 150 150
Imports 3244 3366 3560 2776
TRQ 3/ 1611 1727 1539 1539
Other Program 4/ 419 325 350 350
Other 5/ 1213 1314 1670 887
Mexico 1201 1269 1655 842
Total Supply 14267 14497 14751 14177
Exports 95 170 85 85
Deliveries 12258 12255 12405 12405
Food 6/ 12102 12100 12250 12250
Other 7/ 156 155 155 155
Miscellaneous 38 0 0 0
Total Use 12391 12425 12490 12490
Ending Stocks 1876 2072 2261 1687
Stocks to Use Ratio 15.1 16.7 18.1 13.5
================================================================================

Mexico Sugar Supply and Use and High Fructose Corn Syrup Imports 1/
================================================================================
Supply Use
Fiscal Beginning product Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
================================================================================
1000 Metric Tons, Actual Weight
Sugar
2017/18 Est.
Aug 1002 6009 190 4727 1228 1247
Sep 1002 6010 190 4727 1207 1268
2018/19 Proj.
Aug 1247 6025 115 4952 1427 1008
Sep 1268 6025 115 4952 995 1461
================================================================================

COCOA
General Comments Futures closed higher in both markets, with New York the stronger market. Funds and other speculators were the best buyers and are reacting to reports of potential diseases in West African crops. Prices are still in a very short-term trading range. The outlook for strong production in the coming year has been strong enough to keep the prices weak, but there are new disease concerns for West Africa. Some reports of Black Pod disease have surfaced in the last week in Nigeria, and Ivory Coast producers say that the recent big rains and humid air could promote the disease in their fields 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 4.379 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 1670, 1700, and 1740 December.

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