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 higher in range trading. Demand remains strong in export markets as the weekly export sales report showed very strong volumes last week. Chart trends are mixed on daily charts and up on weekly charts. New crop planting has been slow, but not unusually slow when compared to last year and the five-year average. The weather in the western Great Plains is showing some improvement as some areas have finally seen some precipitation. However, the precipitation was minimal and not of much benefit to farmers. Forecasts call for mostly dry weather for the next couple of weeks. US farmers in just about all production areas plan to plant more Cotton, and the precipitation will help farmers in those areas get started. In contrast, farmers in the Delta and Southeast have seen too much rain and have had delays as soils dry out.
Overnight News: The Delta and the Southeast will get drier weather early this week, but some rains are likely over the second half of the week. Temperatures should be mostly below normal. Texas will see showers and storms today and tomorrow, then mostly dry conditions. Temperatures will be below normal. The USDA average price is now 80.27 ct/lb. ICE said that certified stocks are now 73,713 bales, from 73,285 bales yesterday. ICE said that there were 0 contracts tendered for delivery today and that total deliveries are now 189 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 8300, 8200, and 8160 July, with resistance of 8500, 8540, and 8580 July.
General Comments: FCOJ was higher. It looks like FCOJ is in a weather market as dry conditions are reported in Florida and in production areas of Brazil. The weather has been dry and the harvest is starting to wind down in some areas. The market is still dealing with a short crop against weak demand, and the weekly Movement and Pack report in Florida is showing higher inventories year on year. The current weather is good as temperatures are warm and it is mostly dry, but some light to moderate rains were reported over the week. The harvest is progressing well and fruit is being delivered to processors. Producers are now into the Valencia crop. Florida producers are seeing pea sized to marble sized fruit. Conditions are reported as generally good, although most producers would like more rain. Irrigation is being used. Brazil also could use more rain as Sao Paulo has been hot and dry. Variable conditions are reported in Europe and northern Africa.
Overnight News: Florida should get mostly dry weather. Temperatures will average near to below normal. Brazil should get mostly dry weather and near to above normal temperatures. The best precipitation should be this weekend. There have been no deliveries so far in New York against May contracts.
Chart Trends: Trends in FCOJ are up with no objectives. Support is at 152.00, 150.00, and 147.00 July, with resistance at 156.00, 158.00, and 160.00 July.
General Comments Futures in New York were higher yesterday on improved fund buying. Funds and other speculators were on both sides of the market and industry was a net buyer. The weekly charts show that a reversal might have happened last week. London was higher after a big range day. More and more traders are now looking for the market to reverse as the speculator gets out-of-the-way and tries to book profits, Some traders now think a significant rally is just around the corner. Origin is still offering in Central America and is still finding weak differentials. Good business is getting done and exports are active. Traders anticipate big crops from Brazil and from Vietnam this year and have remained short in the market. New York traders are talking about good weather currently being reported in Brazil and expect another bumper crop. Robusta remains the stronger market as Vietnamese producers and merchants are not willing to sell at current prices and are willing to wait for a rally. Wire reported suggest that conditions for the crop are good as the rainy season gets underway. Vietnamese cash prices were steady again last week with good supplies noted in the domestic market. Customs data showed that the export pace so far this calendar year has been strong at 610,375 tons through April 15. This is the strongest pace since at least 2011 .
Overnight News: Certified stocks are higher today and are about 1.921 million bags. The ICO composite price is now 116.88 ct/lb. Brazil will get drier conditions until showers appear on Sunday. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get isolated showers or dry conditions. Vietnam will get showers in the north starting tomorrow. ICE said that there were 0 deliveries today in New York and that total deliveries for the month are 87 contracts.
Chart Trends: Trends in New York are mixed. Support is at 117.00, 115.00, and 112.00 July, and resistance is at 123.00, 124.00 and 126.00 July. Trends in London are mixed. Support is at 1740, 1720, and 1700 July, and resistance is at 1780, 1790, and 1810 July.
General Comments: Futures were slightly lower in both markets again yesterday on ideas that the market has made a temporary low in the last week. There is still a lot of talk about big world production and big supplies available to the market, but also some talk of less production for the coming year due to the low prices. Even so, the market seems to anticipate that plenty of Sugar will be around.. Reports in the first part of last week that the Brazil season was off to a big start caused the selling interest as the market now expects even more Sugar to be available, but the market was able to hold once this data was factored in. Traders hear about big production from world producers and little in the way of special demand that could absorb some of the surplus. India is back to export Sugar this year after being a net importer for the last couple of years. They hope to export 2.0 million tons this year, but will have a surplus that is doublé that amount. Thailand has produced a record crop and is selling. Brazil still has plenty of Sugar to sell, and even the EU has had over production in the past year.
Overnight News: Brazil will get dry weather until some showers return on Sunday. Temperatures should be near to above normal. ICE said that 21,021 contracts of Sugar were delivered against May Sugar 11 yesterday.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 1140, 1100, and 1080 July, and resistance is at 1180, 1200, and 1240 July. Trends in London are mixed to down with no objectives. Support is at 322.00, 311.00, and 307.00 August, and resistance is at 332.00, 336.00, and 346.00 August.
General Comments Futures were higher in New York and higher in London. It looks like the fund and big speculator buying dried up in New York yesterday. London has been the weaker market lately due to reduced speculator interest, but the two markets could see the spread between them correct if the speculative buying in New York is fading. Ideas that world production has been largely sold remain part of the rally. Showers and more seasonal temperatures have been seen in the last few weeks to improve overall production conditions in West Africa. The mid crop harvest is starting, and wire reports indicate that some initial mid crop harvest is underway in all countries. Yield estimates imply that variable yields can be expected. The harvest should begin soon in Ivory Coast and Ghana. Bloomberg reported last week that the difference between New York and London prices is historically large. This is due to fund buying in New York, but also due to increased Cameroon offers in Europe. European buyers do not like Cameroons Cocoa, so the supplies have been certified in London for delivery. So, the longs in London are leaving the market to avoid having to take Cameroons Cocoa. The big spread implies that African Cocoa can make it to New York for delivery and generate profits for sellers. Asian supplies are now less available since Asian grinding capacity has increased, so New York has space for African Cocoa.
Overnight News: Scattered showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get cry conditions and near to above normal temperatures. ICE certified stocks are higher today at 5.386 million bags. ICE said that 20 delivery notices were posted against May Contracts and that total deliveries for the month are now 167 contracts.
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2700, 2670, and 2630 July, with resistance at 2860, 2890, and 2920 July. Trends in London are mixed to up with objectives of 1910 July. Support is at 1850, 1810, and 1780 July, with resistance at 1910, 1940, and 1970 July.