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 higher in reaction to news of a truce in the tariff wars between the US and China. The highs were made in the overnight session, then new speculative and producer selling was uncovered to push prices to the middle of the range. It was considered a disappointing close. The market is still likely to rally this week due to the truce in the tariff war between China and the US that was made over the weekend. Wire and anecdotal reports still 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 market needs new demand. Export sales for the last few weeks have been poor, and last week where sales were good. However, the better sales for one week were not enough to change attitudes about demand, and the weakness in petroleum futures meant that more poly products could be produced cheaper to compete with Cotton.
Overnight News: The Delta should get mostly dry weather and mostly below normal temperatures. Rain is likely in the Delta on Friday and in the Southeast on Saturday The Southeast will get mostly dry weather. Temperatures should be variable. Texas will have mostly dry weather, but showers are possible on Friday and Saturday. Temperatures will be near to below normal. The USDA average price is now 74.27 ct/lb. ICE said that certified stocks are now 147,199 bales, from 148,670 bales yesterday. ICE said that 10 notices were posted against December contracts and that total deliveries for the month are now 680 contracts.
Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 7970, 7960, and 7900 March, with resistance of 8120, 8180, and 8200 March.
General Comments: FCOJ was a little lower as good 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, but futures have been unable to extend the upside for a few sessions now and a correction is increasingly possible. 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 this weekend. Temperatures will average near to above normal. Brazil should get dry conditions this week and scattered showers this weekend and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed to 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.
General Comments: Futures were higher in New York, but lower in London more offers from Vietnam. Chart patterns suggest that lower prices are coming to both markets as Brazil and Vietnam look to sell production at harvest time. Currency relationships, and especially the rate between the US Dollar and the Brazilian Real, continue to be s driving force in Coffee trading. The Brazil crops are getting harvested now, but are not always finding their way to the market due to the overall Real strength against the Dollar. Producers are also looking ahead to next year. El Nino remains in the forecast and Coffee areas in Brazil could be affected by drought. This is the off-year for production there, anyway, and a drought would mean even less production. Vietnam is actively harvesting its new crop. Production in Vietnam is estimated at or above 30 million bags. Producers in both countries are not selling much, but speculators are on ideas that producers will need to sell something soon. 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.
Overnight News: Certified stocks are higher today and are about 2.450 million bags. The ICO composite price is now 104.59 ct/lb. Brazil will get chances for showers this weekend. 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 1,044 contracts.
Chart Trends: Trends in New York are down with objectives of 103.00 March. Support is at 107.00, 105.00, and 104.00 March, and resistance is at 110.00, 112.00 and 115.00 March. Trends in London are down with objectives of 1500 January. Support is at 1560, 1540, and 1520 January, and resistance is at 1610, 1640, and 1660 January.
General Comments: Futures closed slightly higher in both New York and London for the second trading session in a row. The recovery in Sugar prices appeared tied to higher Crude Oil and products futures. The rally also came from follow through buying tied to chart patterns. 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. Higher Crude Oil prices will just keep the ethanol production high as will moves by the Brazil government to promote ethanol use over gasoline. 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 dry conditions, then some showers over the weekend. Temperatures should be near to above normal next week.
Chart Trends: Trends in New York are mixed to up with objectives of 1330 March. Support is at 1260, 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 347.00, 343.00, and 341.00 March, and resistance is at 354.00, 355.00, and 361.00 March.
General Comments Futures closed lower in both markets as Ivory Coast port arrivals held strong. Arrivals are now estimated at 689,000 tons this season, up about 35% from last year. 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. It has been dry in West Africa as Harmattan winds have arrived, but producers report that trees are holding good condition as subsoil moisture reserves are very good.
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 3.454 million bags. ICE said that 0 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 2140, 2100, and 2080 March, with resistance at 2230, 2270, and 2300 March. Trends in London are mixed. Support is at 1590, 1560, and 1540 March, with resistance at 1630, 1660, and 1680 March.