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 after trading higher for much of the day. Waters are starting to recede in the Carolinas, although some major flooding is reported near the rivers and coastal areas in South Carolina. The extent of the potential damage to crops and animals in the Carolinas is significant. It will be a little more time before the full extent of the damage in known as most producers are cleaning up now after the storms. USDA showed slight improvement in the national rankings for Cotton this week, which is a surprise considering the weather in the last week The market fell to some price targets of many traders at 7500 December last week before some new buying interest was found. Futures could try to make new lows for the move this week as the chart formation could be a bear flag. The trade war with China continues with no end in sight and neither side will to give much to make a deal happen.
Overnight News: Dry in the Delta and scattered showers in the Southeast. Temperatures should be near to above normal. Texas will have mostly dry conditions. Temperatures will be above normal. The USDA average price is now 74.94 ct/lb. ICE said that certified stocks are now 27,073 bales, from 26,969 bales yesterday. ICE said that 5 delivery notices were posted against October Contracts yesterday and that total deliveries for the month are now 94 contracts. USDA said that net Upland Cotton export sales were 70,300 bales this year and 58,200 bales next year. Net Pima sales were 7,300 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed to down with objectives of 7800 and 7500 December. Support is at 7800, 7790, and 7750 December, with resistance of 7930, 7960, and 8070 December.
General Comments: FCOJ was lower. The Gulf of Mexico is still quiet and as the Atlantic is also quiet. Trends are down again in this market and futures are at the lowest levels for the last several months. But, prices have not yet been able to force new lows in the last week. The summer has been a quiet one in the Atlantic, There are no systems of note developing that could impact Florida in the next week or so, and the hurricane season is now past the halfway point. Florida is getting mostly dry weather. 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 or light showers. 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 204 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 145.00, 143.00, and 141.00 November, with resistance at 150.00, 153.00, and 154.00 November.
General Comments: Futures were a Little higher in both markets yesterday. New York is moving for a test of the recent contract lows, while London is holding to a short-term trading range. World demand remains soft even though prices have been weakening as the buy side is only buying when necessary and is not extending coverage much. The sell side has been seen using rallies to get covered on potential future deliveries. Certified stocks continue to build in ICE warehouses and this trend should continue due to the lack of cash market demand. Ideas of strong production in Brazil and Vietnam along with weakening emerging market currencies are keeping futures under selling pressure. That might be changing now if the US Dollar continues to move lower. Hot and dry weather is forecast for the next couple of weeks in Brazil.
Overnight News: Certified stocks are higher today and are about 2.378 million bags. The ICO composite price is now 97.56 ct/lb. Brazil will get showers today and tomorrow and again starting on Sunday. 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.
Chart Trends: Trends in New York are mixed. Support is at 97.00, 95.00, and 93.00 December, and resistance is at 100.00, 103.00 and 104.00 December. Trends in London are mixed. Support is at 1470, 1450, and 1430 November, and resistance is at 1520, 1540, and 1560 November.
DJ European Coffee Stocks Climbed in August
By David Hodari
European coffee stocks in August rose to their highest level in more than a year, the European Coffee Federation said Monday.
European stocks climbed 2.3%, or 16,111 tons, to 705,483 tons from 689,372 tons, in August, the data show. The ECF’s August data was accompanied by corrected July data, that was initially released Friday.
The total amount of beans held at the six major European coffee ports that the ECF tracks–Barcelona, Antwerp, Hamburg, Genoa, Le Havre and Trieste–hit its highest level since June 2017, with investors increasingly concerned about the impact of high stocks, a weak Brazilian real, and large production forecasts upon the sustainability of prices.
General Comments: New York and London were lower on what appeared to be follow through speculative selling. Both markets have been in a free fall this week and appear headed for new contract lows in the near future. Producers in Brazil say that more rain is needed for planting and for maintaining the condition of the current crop, but beneficial rains were seen in the last week. Current forecasts call for hot and dry weather to return to some growing areas over the next couple of weeks. Dry conditions continue in 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 mostly dry weather this week, but showers are possible on Friday. Temperatures should be near to above normal.
Chart Trends: Trends in New York are down with objectives of 1060 March. Support is at 1110, 1050, and 1020 March, and resistance is at 1140, 1160, and 1190 March. Trends in London are down with objectives of 315.00 December. Support is at 315.00, 308.00, and 303.00 December, and resistance is at 328.00, 338.00, and 346.00 December.
General Comments Futures closed lower and showed signs of renewing the down trend. The outlook for strong production in the coming year has been enough to keep the prices weak, but there are some disease concerns for West Africa as a lot of humid air has promoted some concerns that Black Pod Disease could spread. 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 4.198 million bags.
Chart Trends: Trends in New York are down with objectives of 2150 December. Support is at 2140, 2110, and 2100 December, with resistance at 2230, 2250, and 2300 December. Trends in London are down with objectives of 1510 and 1460 December. Support is at 1540, 1500, and 1450 December, with resistance at 1570, 1600, and 1630 December.
DJ National Strike Disrupts Cocoa Trading in Nigeria
By Obafemi Oredein
Special to Dow Jones Newswires
IBADAN, Nigeria–Buying and selling of cocoa stopped in several cocoa-producing states in Nigeria on Thursday at the start of an indefinite nationwide strike by the country’s main labor unions, traders and industry officials said.
The unions, Nigeria Labor Union, Trade Union Congress and the United Labor Congress, called on workers to protest against the government not implementing a new national minimum wage.
Cocoa grading has been suspended in the states as public-service workers who grade and certify cocoa fit for export have joined the strike, while cocoa buying and selling stopped following the closure of commercial banks.
“Cocoa is a cash and carry business. If you can’t get money from the banks, cocoa cannot be purchased,” Vincent Ohwojakpor, an official of the Cocoa Association of Nigeria in the midwest state of Edo, said.
It is illegal to sell, buy or export ungraded cocoa from Nigeria.
He said local processors and exporters won’t be able to buy cocoa, while cocoa transportation to the ports in Lagos from the hinterland would be suspended if the strike continues for a long time as graded cocoa won’t be available for purchase.
Mazi Uche, a CAN official in Abia state, said banks have joined the strike, making it difficult for traders and exporters to access money to buy cocoa, while grading of the commodity has also stopped.
Toba Adenowuro, a cocoa desk officer In Ondo state, the country’s largest cocoa producer, said banks were closed in the state but “the bulk of the work in the cocoa” was now going on at farms.
The unions are demanding a new minimum wage of 50,000 Nigerian naira ($138) a month to replace the current minimum of NGN18,000.
DJ Eyes on Ghana, Ivory Coast As Cocoa Pricing Panels Convene — Market Talk
0800 GMT – Traders are watching closely as cocoa pricing committees in Ivory Coast and Ghana convene ahead of the 2018-19 season due to open next month, says Ghana’s regulator Cocobod. The two producers plan to announce a fixed farm gate price simultaneously for the first time in decades, in the latest effort to exert more influence on global cocoa markets. Edward George, a commodity analyst with West Africa Banking group Ecobank notes that the development builds a strong “foundation for closer cooperation” as Ghana and Ivory Coast, who account for 60% of global supplies cement efforts to harmonize marketing activities. Cocoa prices have recovered in recent weeks over-supply disruption fears amid reports of Black Pod disease-spreading across West Africa. (Nicholas.Bariyo@wsj.com;@Nicholasbariyo)