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 as traders got ready for the USDA reports that will be released later this morning. The export sales report showed good sales, but did not show enough one way or another to move the markets too much. The production report should move the market in one direction or the other after it is released. Production could be a little lower than what USDA showed last month as conditions have stayed very bad in Texas. 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 weekly charts, but the daily trends have been sideways.
Overnight News: The Delta and Southeast will see showers move from west to east through Sunday, then mostly dry into next week, and the Southeast will get drier weather through the weekend. Temperatures should be near to above normal. Texas will see mostly dry conditions. Temperatures will be variable. The USDA average price is now 83.47 ct/lb. ICE said that certified stocks are now 20,298 bales, from 20,298 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 8680, 8610, and 8450 December, with resistance of 8860, 8910, and 8930 December.
DJ On-Call Cotton – Aug 9
As of Aug 3. 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
Dec 18 52,227 53,904 -1,677 22,875 22,895 -20
Mar 19 38,796 38,697 99 2,454 2,415 39
May 19 18,119 18,118 1 342 342 0
Jul 19 24,340 22,709 1,631 1,748 1,382 366
Dec 19 14,679 15,129 -450 14,014 15,366 -1,352
Mar 20 4,477 4,179 298 209 209 0
May 20 1,498 1,355 143 0 0 0
Jul 20 1,167 1,035 132 0 0 0
Dec 20 1,202 1,202 0 1,087 1,087 0
Total 156,505 156,328 177 42,729 43,696 -967
Oct 18 199 155 44
Dec 18 174,440 173,180 1,260
Mar 19 57,157 53,295 3,862
May 19 8,620 8,048 572
Jul 19 6,727 5,985 742
Oct 19 2 1 1
Dec 19 20,195 19,580 615
Mar 20 403 238 165
May 20 0 0 0
Jun 20 0 0 0
Dec 20 418 418 0
Total 268,161 260,900 7,261
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 ten 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 Aug. 10. Figures are in millions of bales.
2018-19:| Avg | Low | High | July
US Production | 18.39| 18.00| 19.00| 18.50
US Exports | 15.08| 14.70| 15.50| 15.00
US End Stocks | 3.86| 3.50| 4.00| 4.00
World Production | 119.73| 119.00| 120.50| 120.11
World Consumption | 126.79| 126.00| 127.50| 126.95
World End Stocks | 77.31| 75.00| 78.50| 77.84
| | | End | | | End
Estimates: |Production |Exports |Stocks |Production |Consumption |Stocks
Cottonexperts.com | 18.50| 15.00| 3.90| 119.00| 127.00| 76.50
Doane | 18.60| 15.50| 3.85| 120.00| 127.50| 77.00
Love Consulting | 18.25| 14.75| 4.00| 119.50| 127.00| 77.50
Price Futures Group| 18.30| 15.00| 3.90|n/a |n/a |n/a
Rabobank | 18.00| 15.20| 3.50| 119.70| 126.90| 75.00
Rose Consulting | 18.11| 15.00| 3.96| 119.00| 126.00| 78.30
Texas A&M; Robinson| 18.00| 14.70| 3.80| 120.11| 126.95| 77.84
Tullet Prebon | 18.20| 15.00| 3.70|n/a |n/a |n/a
Varner Bros. | 18.90| 15.40| 4.00| 120.50| 126.50| 77.80
Wedbush Securities | 19.00| 15.20| 4.00| 120.00| 126.50| 78.50
General Comments: FCOJ was slightly higher as the trade got ready for the big USDA reports tomorrow nd looks for reasons to push the market prices higher or lower. USDA is expected to show better Oranges production potential for next year, although production should not return to levels seen before the Greening Disease became such a big problem. Production could be near 55 million boxes for the coming year. 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. The state is getting frequent periods of showers. Florida producers are seeing good-sized fruit, and work in groves maintenance is active. Producers expect a good crop. A good crop now will likely mean increasing inventories of frozen concentrate.
Overnight News: Florida should get scattered showers each day with best amounts and coverage today. 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 163.00, 160.00, and 158.00 September, with resistance at 167.00, 170.00, and 172.00 September.
General Comments Futures were lower in New York, but London closed a little higher. 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. 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 through the weekend. 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. 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 2.074 million bags. The ICO composite price is now 105.61 ct/lb. Brazil will get mostly dry conditions. Temperatures should be variable. 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 1630, 1610, and 1580 September, and resistance is at 1680, 1710, and 1720 September.
DJ Brazil Coffee Exports Jumped in July as Robusta Sales Soared
By Jeffrey T. Lewis
SAO PAULO–Brazilian coffee exports rose in July from a year earlier as sales abroad of the robusta variety soared, according to exporters group Cecafe.
The South American country exported 2.3 million 132-pound bags of coffee last month, an increase of 24.2% from the same month a year earlier, Cecafe said Thursday.
Sales abroad of the arabica variety of coffee rose 5.8% from a year earlier to 1.7 million bags, while exports of robusta beans rose to 366,663 bags from 19,826 bags in July of last year.
A drought in the Brazilian state of Espírito Santo, which produces most of the country’s robusta beans, hit production in 2016 and 2017, and exports of the variety are only now recovering after the rain returned.
Exports of roasted, ground and instant coffee rose 5.2% in July to 291,233 bags, Cecafe said.
General Comments: Futures were a little higher in consolidation trading. UNICA showed reduced Sugarcane processing in its reports yesterday and this seemed to create some buying interest. Short term trends are more sideways. Ideas of big world production are bearish and continue to be the dominant fundamental force in the market 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 variable.
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 329.00, 330.00, and 336.00 October.
DJ Brazil Center-South Sugar Crush Down 7% at 47.3M Tons in 2H July–Unica
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the second half of July compared with a year earlier, according to industry group Unica.
Center-south mills crushed 47.3 million metric tons of cane in the period, a decrease of 7% from the same period a year earlier. They produced 2.6 million tons of sugar, down 23.7%, and made 2.6 billion liters of ethanol, an increase of 24.7%.
The production mix for the second half of last month was 38.5% sugar to 61.5% ethanol. A year earlier, the mix was 50.35% sugar and 49.65% ethanol. Low prices for sugar on world markets is encouraging mill owners to boost output of ethanol this year, at the expense of sugar production.
Brazil is the world’s biggest sugar producer and exporter, and the center-south grows about 90% of the country’s cane.
In the season from April 1 through Aug. 1, mills in the region crushed 314.8 million tons of cane, up 5.5% from the same period a year earlier. Sugar production fell 16.3% to 14.8 million tons, and ethanol output rose 38.3% to 16.1 billion liters.
The production mix for the season through Aug. 1 was 36.5% sugar to 63.5% ethanol. A year earlier, the mix was 48.45% sugar and 51.55% ethanol.
General Comments futures were a little lower in a mostly consolidation trade. Ideas of big world production have kept futures on the defensive. Trends on both markets are down longer term 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. The rest of West Africa looks to have good crops as well. 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 4.536 million bags.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 2040, 1990, and 1960 September, with resistance at 2150, 2200, and 2240 September. Trends in London are mixed to down with no objectives. Support is at 1510, 1480, and 1450 September, with resistance at 1580, 1600, and 1650 September.