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 mostly higher again yesterday, but July closed a little lower. Back months are holding firmo n less than ideal crop conditions in West Texas and at other producing áreas around the world. The weather is bad in India and China, with big heat seen in India and Pakistan and too much rain in China. Lost Chinese production could mean increased sales for the US, especially now since the US will have the quality the Chinese need. Futures traders are looking at a market that still has strong export demand and has seen some very uneven planting and growing conditions in the US. Much of the Southeast and parts of the Delta have seen big rains. The Southeast should see more bg rains this weekend. Texas has seen some precipitation, but dryland áreas are still very dry. Oklahoma and Kansas have improved conditions due to recent rains. It has been hot and dry on the Indian Subcontinent and also in China. There are ideas that the US is now running short of high quality Cotton to deliver to the exchange and to overseas buyers. Demand remains strong in export markets.
Overnight News: The Delta will be mostly dry and the Southeast will get big rains, especially this weekend. Temperatures should be mostly below normal. Texas will see some showers today, then mostly dry conditions. Temperatures will be above normal. The USDA average price is now 82.94 ct/lb. ICE said that certified stocks are now 84,389 ba1es, from 77,592 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 8940, 9220, and 9940 July. Support is at 8660, 8620, and 8500 July, with resistance of 8800, 8970, and 8920 July.
DJ On-Call Cotton – May 24
As of May 18. 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.
*-denotes changes from the previous week are based on revised data from
Call Previous Change Call Previous Change
May 18 0 0 0 25 25 0
Jul 18 46,553 49,643 -3,090 4,776 6,206 -1,430
Oct 18 0 0 0 0 0 0
Dec 18 40,484 40,590 -106 21,828 22,908 -1,080
Mar 19 32,167 31,882 285 1,629 1,742 -113
May 19 16,088 14,541 1,547 122 159 -37
Jul 19 14,812 13,622 1,190 974 974 0
Dec 19 10,232 8,674 1,558 13,403 13,529 -126
Mar 20 2,470 2,232 238 208 208 0
May 20 643 559 84 0 0 0
Jul 20 1,035 956 79 0 0 0
Dec 20 353 353 0 262 218 44
Total 164,837 163,052 1,785 43,227 45,969 -2,742
Open Open Change
May 18 0 15 -15
Jul 18 129,164 134,671 -5,507
Oct 18 36 37 -1
Dec 18 122,478 117,052 5,426
Mar 19 22,858 19,258 3,600
May 19 3,860 2,170 1,690
Jul 19 2,199 1,829 370
Dec 19 9,377 8,477 900
Mar 20 0 0 0
May 20 0 0 0
Jun 20 0 0 0
Dec 20 70 13 57
Total 290,042 283,522 6,520
General Comments: FCOJ was a little lower yesterday. It was another quiet sesión as traders seemed to be waiting for some news. Most traders are focussd on the weather as the hurricane season is justa round the corner. Some drought busting rains have been reported in Florida in the last week, and more big rains are expected this weekend from what could be a troipical or sub tropical storm now forming in the Gulf of Mexico. The situation in the state should continue to improve as the rainy season appears to be underway/ The market is still dealing with a short crop against weak demand. Florida producers are seeing golf ball sized fruit. Conditions are reported as generally good. Irrigation is being used, but less now after the rains. Brazil also could use more rain as Sao Paulo has been hot and dry. Generally good conditions are reported in Europe and northern Africa.
Overnight News: Florida should get showers and storms this week and some big rains this weekend from a potential tropical storm. Temperatures will average near to below normal. Brazil should get mostly dry weather and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 165.00, 162.00, and 157.00 July, with resistance at 170.00, 172.00, and 173.00 July.
General Comments Futures in New York and London closed higher on the cold weather in Arabica growing áreas and the truckers strike in Brazil that could delay shipments. Southern growing áreas into pars of Minas Gerais saw temperaturas cold enough to potentially damage crops this week, but there have been few, if any reports of damage. It remains mostly dry in Arabica áreas, but Conillan áreas have seen some rains lately. Origin is still offering in Central America and is still finding weak differentials. Speculators anticipate big crops from Brazil and from Vietnam this year and have remained short in the market. Robusta remains the stronger market as Vietnamese producers and merchants have not been willing to sell at current prices. Vietnamese cash prices are weaker this week with good supplies noted in the domestic market. Current rains in the country are favorable for the crops.
Overnight News: Certified stocks are slightly lower today and are about 2.010 million bags. The ICO composite price is now 113.38 ct/lb. Brazil will get drier conditions. 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.
Chart Trends: Trends in New York are mixed. Support is at 117.00, 115.00, and 112.00 July, and resistance is at 121.00, 124.00 and 126.00 July. Trends in London are mixed. Support is at 1750, 1730, and 1720 July, and resistance is at 1800, 1810, and 1840 July.
General Comments: Futures were higher once again in New York and in London on more follow through buying. Ideas are that the market has been oversold and in need of a short covering rally. Ideas are that this rallu might stop soon as the frundamentals are called bearish. Most traders remain focused on big world production. It has turned dry in parts of Brazil, including some Sugarcane production áreas, and there is some talk of losses to the crop in the near future unless rains return soon. It has also been very cold and some cane might have been damaged. However, the initial harvest has been big and processing has been more active than last year. India is back to export Sugar this year after being a net importer for the last couple of years. The government is subsidizing industry and producers to help maintain an active market flow and to prevent the buildup of Sugar in storage. India could raise the internal prie or try to stockpile supplies in meetings that are now scheduled for next week. Thailand has produced a record crop and is selling. Middle East and North African buyers are reported to be buying normal or less than normal amounts of Sugar in the world market right now.
Overnight News: Brazil will get dry weather. Temperatures should be near to above normal this week.
Chart Trends: Trends in New York are up with objectives of 1270 and 1370 July. Support is at 1200, 1170, and 1150 July, and resistance is at 1260, 1280, and 1310 July. Trends in London are up with objectives of 368.00 August. Support is at 351.00, 345.00, and 340.00 August, and resistance is at 361.00, 367.00, and 369.00 August.
DJ Brazilian Sugar Mills in Center-South Region Increase Amount of Cane Crushed in Early May
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the first half of May compared with a year earlier, according to industry group Unica.
Center-south mills crushed 42.6 million metric tons of cane in the period, a rise of 10.6% from the same period a year earlier. They produced 1.9 million tons of sugar, down 9.9%, and made 2.1 billion liters of ethanol, an increase of 39.3%.
The production mix for the first half of this month was 36.6% sugar to 63.4% ethanol. A year earlier, the mix was 46.8% sugar and 53.2% ethanol.
Dry weather in parts of the center-south area, which grows about 90% of the country’s cane, has led some analysts to cut their forecasts for this year’s cane crop. The smaller harvest will mean a decline in sugar output for the 2018-2019 season as producers favor ethanol production, analysts said.
In the season from April 1 through May 16, mills in the region crushed 102.5 million tons of cane, up 27.3% from the same period a year earlier. Sugar production rose 4.9% to 4.1 million tons, and ethanol output rose 54.7% to 4.8 billion liters.
The production mix for the season through May 16 was 35.2% sugar to 64.8% ethanol. A year earlier, the mix was 44.2% sugar and 55.8% ethanol.
General Comments Futures were lower in both markets and overall trading remains choppy and sideways.. Short term trends are still turning down, with New York most interested in working lower at this time. London is holding to a trading range at this time. Both New York and London could be forming a top. 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. Conditions also appear good in East Africa and Asia. The mid crop harvest is active in West Africa.
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 dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 5.197 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2510 July. Support is at 2580, 2550, and 2530 July, with resistance at 2690, 2700, and 2740 July. Trends in London are mixed. Support is at 1840, 1810, and 1780 July, with resistance at 1900, 1930, and 1950 July.