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 lower as Hurricane Florence aimed for the Carolinas. 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. More storms are forming in the Atlantic tha could bear down on other Cotton growing areas. US production ideas are lower after the extreme weather seen in Texas this year, and many analysts now expect total US production below 19 million bales. US weather remains good in the Delta, and has improved slightly in West Texas on north into Kansas with improved precipitation. Even so, the crop is generally in poor condition in much of Texas and there are real questions on just how good the yield can be in the state this year. The harvest has been active in far southern parts of the state. Bolls are opening in the Delta and Southeast. 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 this week in the Delta, but showers in the Southeast and big storms from hurricane Florence starting late this week. Temperatures should be near to above normal. Texas will have mostly dry conditions. Temperatures will be above normal. The USDA average price is now 79.32 ct/lb. ICE said that certified stocks are now 20,435 bales, from 20,017 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 8200, 8120, and 8000 December, with resistance of 8390, 8420, and 8610 December.
Date 9-Sep 2-Sep 2017 Avg
Cotton Bolls Opening 39 29 33 25
Cotton Harvested 10 8 5
Very Poor Fair Good Very Good
Cotton This Week 13 21 28 29 9
Cotton Last Week 15 18 26 31 10
Cotton Last Year 4 7 26 46 17
Wire: Bloomberg News (BN) Date: Sep 7 2018 12:15:00
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 eight 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 Sept. 12. Figures are in millions of bales.
|——–Survey Results———| USDA
2018-19:| Avg | Low | High | Aug.
US Production | 19.12| 18.75| 19.54| 19.24
US Exports | 15.43| 15.10| 15.75| 15.50
US End Stocks | 4.58| 4.25| 5.00| 4.60
World Production | 120.51| 119.83| 122.00| 120.53
World Consumption | 127.59| 126.50| 129.00| 127.62
World End Stocks | 77.23| 75.50| 79.50| 77.10
Analyst |————-U.S.————–| World
| | | End
Estimates: | Production | Exports |Stocks | Production | Consumption |Stocks
Doane | 19.50| 15.75| 4.60| 120.00| 129.00| 75.50
Love | | | | | |
Consulting | 18.90| 15.50| 4.30| 120.00| 128.00| 76.50
Price Futures| | | | | |
Group | 19.05| 15.10| 4.90|n/a |n/a |n/a
Rabobank | 19.00| 15.20| 4.50| 120.70| 127.00| 76.70
Rose | | | | | |
Consulting | 18.75| 15.50| 4.25| 119.83| 128.00| 76.34
Texas A&M; | | | | | |
Robinson | 19.24| 15.50| 4.60| 120.53| 127.62| 77.10
Varner Bros. | 19.54| 15.40| 5.00| 122.00| 127.00| 79.50
Wedbush | | | | | |
Securities | 19.00| 15.50| 4.50| 120.50| 126.50| 79.00
SOURCE: Bloomberg News
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. 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 turning up 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 157.00, 155.00, and 153.00 November, with resistance at 163.00, 165.00, and 167.00 November.
General Comments: : Futures were lower in New York, with funds the best sellers and industry not showing much interest in buying. A weaker Brazilian Real caused the speculative selling. London prices closed mixed. 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. 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 2.275 million bags. The ICO composite price is now 98.25 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 0 contracts for today and now total 1,053 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 down with objectives of 1470 November. Support is at 1470, 1450, and 1420 November, and resistance is at 1520, 1540, and 1560 November.
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 Espírito 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
General Comments: New York and London were mixed, with nearby months a little lower and deferred markets a little 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 starting tomorrow. 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. 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 1220 and 1290 March. Support is at 1170, 1150, and 1130 March, and resistance is at 1210, 1230, and 1250 March. Trends in London are up with objectives of 358.00 and 389.00 December. Support is at 334.00, 328.00, and 320.00 December, and resistance is at 339.00, 342.00, and 348.00 December.
General Comments Futures closed lower in both markets, with New York the weaker market. Funds and other speculators were the best sellers. Prices are still in a very short-term trading range. The outlook for strong production in the coming year has been 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 4.387 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 1700, 1740, and 1760 December.