About The Author

Jack Scoville

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 yesterday and moved to a test of recent lows. Speculators were the best sellers. The market is now waiting for the new USDA production and supply and demand estimates from USDA and is wondering about production losses in the Carolinas from Hurricane Florence and especially production losses in Georgia from Hurricane Michael. The Georgia hurricane had the potential to be devastating as the most powerful part of the storm passed directly over the more important production areas in the state. Georgia is the second largest producer of Cotton in the US, so losses there would be important to the final estimate. Texas is far and away the largest producer of Cotton in the US, but it had some extreme weather of its own during the Summer growing season and should have less production as well. USDA estimates have been held high even with the weather and extremely variable growing conditions, so it will be an important report for the supply side of the market. The weekly export sales report was bad again and the market needs new demand. Export sales for the last few weeks have been poor and show no real signs of improvement for now. Export demand needs to improve soon for prices to rally significantly this year, but any increase in demand has to come with no purchases from China for a while.
Overnight News: The Delta should get mostly dry weather and cool temperatures. The Southeast will get dry weather except for rains today and tomorrow. Temperatures should trend to near to below normal. Texas will have mostly dry weather. Temperatures will be variables. The USDA average price is now 73.64 ct/lb. ICE said that certified stocks are now 39,090 bales, from 40,898 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 7830, 7780, and 7740 December, with resistance of 7980, 8010, and 8030 December.

Crop Progress
Date 4-Nov 28-Oct 2017 Avg
Cotton Bolls Opening 94 91 96 97
Cotton Harvested 49 44 53 52
Crop Condition
Very Poor Fair Good Very Good
Cotton This Week 19 16 32 26 7
Cotton Last Week 18 16 31 27 8
Cotton Last Year 5 10 30 41 14

Wire: Bloomberg News (BN) Date: Nov 5 2018 13:40:00
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 Nov. 8. Figures are in millions of bales.
|——–survey Results———|USDA
2018-19:| Avg | Low | High | Oct.
US Production | 19.21| 18.65| 19.75| 19.76
US Exports | 15.25| 14.80| 15.50| 15.50
US End Stocks | 4.62| 4.15| 5.10| 5.00
World Production | 120.82| 120.00| 121.50| 121.66
World Consumption | 127.45| 127.00| 128.00| 127.76
World End Stocks | 74.16| 72.85| 75.00| 74.45
Analyst |————U.S.————| World
| | | End
Estimates: |Production |Exports |Stocks |Production |Consumption |Stocks
Cottonexperts.com | 19.46| 15.00| 5.10| 120.66| 127.00| 74.00
Doane | 19.00| 15.50| 4.15| 121.00| 128.00| 74.00
Love Consulting | 19.20| 15.50| 4.60| 121.30| 128.00| 74.50
Price Futures Group| 19.55| 15.50| 4.75|n/a |n/a |n/a
Rabobank | 19.30| 15.20| 4.84| 121.00| 127.40| 74.20
Rose Commoditiy | | | | | |
Group | 18.75| 15.00| 4.20| 120.25| 127.25| 74.55
Varner Bros. | 18.65| 14.80| 4.59| 120.00| 127.00| 72.85
Wedbush Securities | 19.75| 15.50| 4.70| 121.50| 127.50| 75.00
Copyright (c) 2018, Bloomberg, L. P.
################################ END OF STORY 1 ##############################

General Comments: FCOJ was lower yesterday as the weather is good for harvesting. The Oranges harvest is underway in Florida under good weather conditions. Chart trends are sideways.. Overall growing conditions in Florida are good to very good, and there is no storm development in the Atlantic at this time. Florida producers are seeing good-sized fruit, and work in groves maintenance is active. Irrigation is being used. Packing houses are open to process fruit for the fresh market, and a couple of major processors are open in the state to take packing house eliminations.
Overnight News: Florida should get mostly dry conditions or light showers. Temperatures will average near to above normal. Brazil should get scattered showers and near to above normal temperatures. ICE said that 0 contracts were delivered against November futures and that total deliveries for the month are now 352 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 137.00, 136.00, and 133.00 January, with resistance at 139.00, 141.00, and 143.00 January.

General Comments: Futures were lower in both markets again yesterday on ideas of big crops and as the US Dollar tried to rally. The Dollar could not hold, but the Real was lower either way and gave the speculators a reason to sell. The Real has found support as the right-wing candidate for president in Brazil won the elections and is now expected to pursue a much more business oriented economic program. The program would also free up agricultural interests to expand and diversify. However, the reaction to the win is now in the market and currency traders will look for other things to trade on. 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. Production in Vietnam is estimated at or above 30 million bags. Producers in both countries are not selling much. Some problems with too much rain have been noted in Central America. Drier conditions are wanted for harvesting, and mostly dry weather is in the forecast as the calendar turns to November.
Overnight News: Certified stocks are a little lower today and are about 2.445 million bags. The ICO composite price is now 111.09 ct/lb. Brazil will get drier weather. Temperatures should be near to below normal. Colombia should get isolated showers. Central America and southern Mexico should get showers or dry conditions. Vietnam will get showers.
Chart Trends: Trends in New York are mixed. Support is at 116.00, 113.00, and 111.00 December, and resistance is at 119.00, 121.00 and 123.00 December. Trends in London are mixed. Support is at 1660, 1650, and 1620 January, and resistance is at 1730, 1740, and 1750 January.

General Comments: New York and London both closed lower. A weaker Brazilian Real against the US Dollar created some fund selling interest. Prices also fell in part to the weakness in petroleum futures and on ideas that there are plenty of supplies out there. The downside potential of the market should be limited on ideas that world production is in fact dropping and might be less than though just a few weeks ago. There are now doubts on just how much production will be seen this year in India. Wire reports indicate that pests have invaded Sugarcane fields and are eating and destroying the crop. Northwest India had been experiencing hot and dry weather that could cut yields. Dry conditions continue in Brazil, the EU, and Russia, but conditions are mostly good in Ukraine. Very good conditions are reported in Thailand. Brazil producers are worried about Cane production, and the market still talks 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. Wire stories yesterday highlighted the low European prices and said that European producers could plant less beets next year.
Overnight News: Brazil will get drier weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1300 and 1230 March. Support is at 1310, 1300, and 1270 March, and resistance is at 1350, 1370, and 1400 March. Trends in London are mixed to down with objectives of 352.00 March. Support is at 350.00, 345.00, and 338.00 March, and resistance is at 364.00, 367.00, and 371.00 March.

General Comments Futures closed higher and made new highs for the move. The recovery has been impressive as it is time for offers from the West Africa harvest to start increasing. The outlook for strong production in the coming year is still around, 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. In fact, initial harvest reports from Nigeria indicate reduced yields due to too much rain as the main crop was maturing. However, weather in the region is drier now and any production losses should be limited. The main crop harvest is in its earliest stages in some parts of West Africa. Main crop production ideas for Ivory Coast and Ghana are being reduced, with Ivory Coast now estimating its main crop production at 1.985 million tons, down from previous estimates just over 2.0 million tons. Conditions appear good in East Africa and Asia. Demand is said to be improving as offers from the new harvest start to increase.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average mostly above normal. Malaysia and Indonesia should see 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 3.744 million bags.
Chart Trends: Trends in New York are up with objectives of 2330, 2430, and 2500 December. Support is at 2270, 2230, and 2170 December, with resistance at 2340, 2370, and 2400 December. Trends in London are mixed to up with objectives of 1720, 1740, and 1810 December. Support is at 1670, 1640, and 1610 December, with resistance at 1720, 1730, and 1750 December.

Questions? Ask Jack Scoville today at 312-264-4322