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 a little higher in consolidation trading. It could be a quiet week until Friday when USDA will issue its production and supply and demand reports. Production could be a little lower than what USDA showed last month as conditions have stayed very bad in Texas. USDA showed average progress and some deterioration in condition in its weekly crop updates released on Monday afternoon that could support prices again today. Conditions remain generally unfavorable in Texas, but are generally good in the Delta and Southeast. The weather is improving in India and China as monsoon rains are reported in India and as China has been dry. The monsoon has active in southern and central India and rains are now reported in northwest India and Pakistan. Trends remain generally up on the daily and weekly charts.
Overnight News: The Delta and Southeast will see showers move from west to east starting tomorrow through Sunday be mostly dry into next week and the Southeast will get drier weather starting today. Temperatures should be near to above normal. Texas will see mostly dry conditions, with light showers possible tomorrow. Temperatures will be variable. The USDA average price is now 84.90 ct/lb. ICE said that certified stocks are now 20,308 bales, from 20,308 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 9000, 9040, and 9380 December. Support is at 8720, 8680, and 8610 December, with resistance of 8910, 8930, and 9000 December.
Date 5-Aug 29-Jul 2017 Avg
Cotton Squaring 92 88 92 94
Cotton Setting Bolls 60 49 56 62
Cotton Bolls Opening 9 8 6
Very Poor Fair Good Very Good
Cotton This Week 11 21 28 32 8
Cotton Last Week 11 19 27 34 9
Cotton Last Year 6 8 29 41 16
General Comments: FCOJ was lower as the production potential remains very good in Florida and as the demand side of the market remains an open question. The daily charts are now showing a very short-term trading range. Short term trends are mixed and the harvest is now about over. 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. Th estate 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 from Wednesday to Friday. 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. Support is at 165.00, 163.00, and 160.00 September, with resistance at 170.00, 172.00, and 175.00 September.
General Comments Futures were higher in New York and in London yesterday. The price action and the market attitudes seem to be moderating now that the funds and other speculators have managed to build and increase on a record net short position. Ideas are that the crop is somewhat overestimated at 60 million bags and that transportation of Coffee to the ports remains hampered by high freight costs left in the wake of the truckers strike that ended a couple of months ago. 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. 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 for next crop. Estimates for production this year range as high as 60 million bags. Central American is also dry in some areas and production losses are increasingly expected. 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 bas. Domestic prices were firmer last week very light farm selling and London price action.
Overnight News: Certified stocks are higher today and are about 2.058 million bags. The ICO composite price is now 106.65 ct/lb. Brazil will get mostly dry conditions with a few showers possible on Monday. Temperatures should be near to below normal. 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 1660, 1630, and 1610 September, and resistance is at 1680, 1710, and 1720 September.
General Comments: Futures were higher on follow through buying. News that some analysts were cutting production estimates for Brazil Sugarcane due to dry weather helped support values. The reversal trade from last Thursday implies that futures can move higher in both markets over time. 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. 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. 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. Growing conditions are considered good in both India and Thailand due to the active monsoon.
Overnight News: Brazil will get dry weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1070, 1040, and 1030 October, and resistance is at 1110, 1140, and 1160 October. Trends in London are mixed. Support is at 319.00, 311.00, and 308.00 October, and resistance is at 330.00, 336.00, and 340.00 October.
General Comments futures higher in both markets yesterday on ideas that Cocoa futures were oversold. The selling over the last couple of weeks has been dramatic in both markets, and the need for a corrective rally was becoming apparent. Prices got too cheap for sellers of all kinds. Ideas of big world production have kept futures on the defensive. Trends on both markets are down and there does not seem to be much buying interest from industry for now. 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. Main crop production ideas for Ivory Coast are still near 2.0 million tons even with the big rains. 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 4.586 million bags.
Chart Trends: Trends in New York are down with no objectives. Support is at 2040, 1990, and 1960 September, with resistance at 2120, 2200, and 2240 September. Trends in London are down with no objectives. Support is at 1530, 1510, and 1480 September, with resistance at 1600, 1650, and 1670 September.