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

COTTON
General Comments: Cotton was a little lower on slightly lower export sales as reported by USDA and some positioning before the G-20 meetings this weekend. The market remains in a short-term trading range, but acts like a bottom is being formed once again. If so, it should be a secondary bottom and imply that a longer term low has been made. The final size of the US crop seems to be getting smaller with reduced and delayed harvest activities. USDA showed that there is still a lot of Cotton to be harvested in its final crop updates for the season. Wire and anecdotal reports also suggest that the harvest pace is poor. Most of the delays have been in Texas due to too much rain, but some delays in the Southeast have also been reported. The delayed harvest could cause yield and quality losses. The lower quality could serve to limit export interest for the US at a time when demand is hurting due to the loss of the China business. India is getting the Chinese demand, but has also had production problems of its own due to dry and hot weather earlier in the year. The market needs new demand.
Overnight News: The Delta should get mostly dry weather and variable temperatures. Some rain is possible on Friday and Saturday. The Southeast will get dry weather until rain appears this weekend. Temperatures should be variable. Texas will have mostly dry weather. Temperatures will be above normal through Sunday, then near to below normal. The USDA average price is now 74.04 ct/lb. ICE said that certified stocks are now 145,635 bales, from 143,968 bales yesterday. ICE said that 4 notices were posted against December contracts and that total deliveries for the month are now 670 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 7760, 7720, and 7660 March, with resistance of 7940, 8010, and 8070 March.

DJ On-Call Cotton – Nov 29
As of Nov 23. 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.
Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Dec 18 1,278 7,174 -5,896 434 9,801 -9,367
Mar 19 43,110 42,354 756 14,641 8,360 6,281
May 19 20,675 20,585 90 1,867 1,610 257
Jul 19 30,664 30,566 98 2,240 2,176 64
Dec 19 16,343 16,415 -72 17,814 17,722 92
Mar 20 5,566 5,513 53 214 214 0
May 20 2,295 2,100 195 0 0 0
Jul 20 2,426 1,872 554 0 0 0
Dec 20 1,166 1,166 0 2,511 2,500 11
Total 123,523 127,745 -4,222 39,721 42,383 -2,662
Open Change
Int
Dec 18 1,305 24,363 -23,058
Mar 19 134,192 126,971 7,221
May 19 35,423 32,885 2,538
Jul 19 18,445 16,415 2,030
Oct 19 4 4 0
Dec 19 30,488 30,479 9
Mar 20 950 943 7
May 20 93 88 5
Jul 20 33 33 0
Dec 20 876 876 0
Total 221,809 233,057 -11,248

FCOJ
General Comments: FCOJ was higher as cold, but not threatening weather, was reported in Florida. The weather has turned warmer and drier in the state, and an active harvest is likely. Some selling was noted on demand concerns and both the domestic and export market remain soft. The soft domestic market has been a feature for several years as more and more people look to pills or other ways to get Vitamin C. The EU had been importing a lot of US FCOJ, but now all of that business is going to Brazil. It is still possible that a short-term low has been made. The Florida FCOJ Movement and Pack report showed that inventories are now 16% above a year ago. That is a significant change, but less than the difference of a few months ago that ran well over 20% The Oranges harvest is active in Florida under good weather conditions. The fruit is abundant. Florida producers are seeing small-sized to good-sized fruit, and work in groves maintenance is active. Irrigation is being used in all areas. 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, with best amounts and coverage over the weekend. Temperatures will average near to above normal. Brazil should get scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 145.00, 146.00, and 150.00 January. Support is at 140.00, 138.00, and 137.00 January, with resistance at 145.00, 149.00, and 151.00 January.

DJ Florida FCOJ Movement and Pack – Nov 29
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 11/17/2018
Corresponding
Current Week Last
Week Season
11/17/2018 11/18/2017 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 211.99 171.55 23.6%
Retail/Institutional 6.01 7.24 -17.0%
Total 218.00 178.79 21.9%
Pack
Bulk 0.70 2.29 -69.4%
Retail/Institutional 1.17 1.45 -19.6%
Total Pack 1.87 3.74 -50.1%
Reprocessed -1.74 -2.24 -22.3%
Pack from Fruit 0.13 1.50 -91.5%
Receipts & Losses
Net Gain or Loss 0.03 0.23 -86.6%
Imports – Foreign 1.41 7.57 -81.4%
Domestic Receipts 0.03 0.39 -91.6%
Receipts of Florida Product
from Non-Reporting Entity – – NC
Chilled OJ used in FCOJ – – NC
Reprocessed FCTJ 0.04 – NA
Total Carry Over, Receipt & Pack
Bulk 212.46 179.79 18.2%
Retail/Institutional 7.18 8.69 -17.4%
Total 219.64 188.48 16.5%
MOVEMENT
Bulk
Domestic 5.71 4.82 18.4%
Exports 0.02 0.34 -93.1%
Total (Bulk) 5.73 5.16 11.1%
Retail/Institutional
Domestic 1.39 1.47 -5.7%
Exports – – NC
Total (Retail/Inst) 1.39 1.47 -5.7%
Total Movement 7.12 6.63 7.4%
ENDING INVENTORY
Bulk 206.73 174.64 18.4%
Retail/Institutional 5.79 7.22 -19.8%
Ending Inventory 212.52 181.86 16.9%
Total Same
Total Season Period Last
To Date Season
17-Nov-18 18-Nov-17 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 237.81 185.02 28.5%
Retail/Institutional 5.92 7.20 -17.8%
Total 243.72 192.21 26.8%
Pack
Bulk 5.19 7.36 -29.5%
Retail/Institutional 8.19 9.78 -16.2%
Total Pack 13.38 17.13 -21.9%
Reprocessed -12.92 -14.66 -11.9%
Pack from Fruit 0.46 2.47 -81.4%
Receipts & Losses
Net Gain or Loss 0.08 0.38 -79.7%
Imports – Foreign 12.93 28.03 -53.9%
Domestic Receipts 0.05 1.20 -95.9%
Receipts of Florida Product – 0.03 -100.0%
from Non-Reporting Entity 0.24 0.13 78.7%
Chilled OJ used in FCOJ 0.13 – NA
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 243.51 207.49 17.4%
Retail/Institutional 14.10 16.97 -16.9%
Total 257.61 224.46 14.8%
MOVEMENT
Bulk 34.91 31.38 11.3%
Domestic 1.86 1.48 25.7%
Exports 36.78 32.86 11.9%
Total (Bulk)
Retail/Institutional
Domestic 8.32 9.75 -14.7%
Exports – – NC
Total (Retail/Inst) 8.32 9.75 -14.7%
Total Movement 45.09 42.61 5.8%
ENDING INVENTORY
Bulk 206.73 174.64 18.4%
Retail/Institutional 5.79 7.22 -19.8%
Ending Inventory 212.52 181.86 16.9%

COFFEE
General Comments: Futures were lower in both markets as the trade waited for more offers from Brazil and Vietnam. This charts show that a bear flag could be forming in New York, and London moved to new lows for the move before recovering and closing inside the recent trading range. Commercials were reported to be the best buyers in New York. Speculators were selling on the forecasts for good weather in Brazil and ideas of big crops. The Brazil crops are not always finding their way to the market due to the overall Real strength against the Dollar. The harvest is well past the halfway point. El Nino remains in the forecast and Coffee areas in Brazil could be affected by drought. Brazil should have less production next year, anyway as it will be the off-year in the biennial cycle. Vietnam has started on its next harvest. Production in Vietnam is estimated at or above 30 million bags, but unseasonal rains right now could hurt production. Producers in both countries are not selling much as both want higher prices. Central American weather is good for harvesting, and the weather is good for harvesting in Colombia.
Overnight News: Certified stocks are slightly lower today and are about 2.450 million bags. The ICO composite price is now 107.66 ct/lb. Brazil will get chances for showers, especially after Thursday. 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. ICE said that 0 contracts were delivered against ICE New York December futures today and that total deliveries for the month are now 1,041 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 109.00 and 103.00 March. Support is at 112.00, 110.00, and 108.00 March, and resistance is at 115.00, 117.00 and 120.00 March. Trends in London are mixed. Support is at 1560, 1540, and 1520 January, and resistance is at 1640, 1660, and 1670 January.

DJ Vietnam’s Bean Issues Unlikely Generalized — Market Talk
0359 GMT – Vietnam has started the 2018/19 harvest with some bean issues such as the beans being smaller than usual or fruits without the beans inside, but it is unlikely that they are generalized, says Rabobank in a note. It expects that Vietnam, the world’s largest robusta producer, will produce 31.1 million bags of coffee in the 2018-19, a record volume. But “rainy weather may result in a delayed harvest and in poor tasting quality coffee.” Frontmonth robusta coffee is trading down $40 a metric ton at $1,615 a metric ton.(lucy.craymer@wsj.com)

SUGAR
General Comments: Futures closed slightly higher in both New York and London. The recovery in Sugar prices appeared tied to higher Crude Oil and products futures after Crude Oil made new lows for the move. The rally also came from follow through buying tied to chart support as futures in New York have held at the 1230 March area and some speculators decided to cover short positions. Ideas for world Sugarcane and Sugar beets production continue to work a little lower, and ideas that Brazil will continue to process Sugarcane for ethanol remain. These ideas remain even through Green Pool of Australia estimated the world surplus at 3.60 million tons raw, from 3.22 million tons in its previous estimate. Unica showed once again this week that Brazil refiners are producing much more ethanol than a year ago at the expense of Sugar, and this trend will continue unless prices for Sugar start to increase. Production losses are also expected in India due to hot and dry weather earlier in the growing season. Dry conditions continue in the EU and Russia. Very good conditions are reported in Thailand, but dry conditions early in the year might have hurt yields. Thailand expects less planted area next year due to the weak prices now. Brazil producers are worried about Cane production, and less production is expected 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.
Overnight News: Brazil will get showers, mostly during over the weekend. Dry again next week. Temperatures should be near to below normal this weekend and near to above normal next week.
Chart Trends: Trends in New York are mixed to up with objectives of 1330 March. Support is at 1280, 1250, and 1230 March, and resistance is at 1320, 1350, and 1370 March. Trends in London are mixed to up with no objectives. Support is at 343.00, 341.00, and 339.00 March, and resistance is at 354.00, 355.00, and 361.00 March.

DJ Brazil Center-South Sugar Crush Down 9.2% at 21.3M Tons in 1H Nov. -Unica
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the first half of November compared with a year earlier, according to industry group Unica.
Center-south mills crushed 21.3 million metric tons of cane in the period, a decrease of 9.2% from the same period a year earlier. They produced 880,000 tons of sugar, down 29.9%, and made 1.1 billion liters of ethanol, an increase of 1.4%.
The production mix for the first half of this month was 34% sugar to 66% ethanol. A year earlier, the mix was 42.4% sugar and 57.6% ethanol.
Brazil is the world’s biggest sugar producer and exporter, and the center-south grows about 90% of the country’s cane. Bad weather in the region affected the sugarcane crop, reducing its size, while low sugar prices in world markets have encouraged mills to produce more ethanol at the expense of the sweetener.
In the season from April 1 through Nov. 16, mills in the region crushed 529.7 million tons of cane, down 4.6% from the same period a year earlier. Sugar production fell 26.8% to 25.2 million tons, and ethanol output rose 19.4% to 28.3 billion liters.
The production mix for the season through Nov. 16 was 35.8% sugar to 64.2% ethanol. A year earlier, the mix was 47.4% sugar and 52.6% ethanol.

COCOA
General Comments Futures closed higher in both markets on what appeared to be speculative short covering. Futures prices in both markets are still in a short-term trading range, but both markets are still holding support areas on the charts. Some commercial buying was seen due to overall attractive prices and ideas of increasing demand from chocolate manufacturers. Quality reports from West Africa are good and grinders are there in the ports and are willing to buy. That is supporting prices. Funds remain the best sellers and have been increasing net short positions until now. The main crop harvest is active in West Africa. Conditions appear good in East Africa and Asia.
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 higher today at 3.491 million bags. ICE said that 2 notices were posted for delivery against December New York futures and that total deliveries for the month are now 492 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2100, 2080, and 2030 March, with resistance at 2190, 2200, and 2270 March. Trends in London are mixed to down with objectives of 1500 March. Support is at 1560, 1540, and 1520 March, with resistance at 1620, 1630, and 1660 March.

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