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 once again as weak overall demand continues to impact the US market. Traders were also looking at the moves seen in the world stock indices and petroleum complex and the stronger US Dollar as good reasons to sell Cotton. There was talk of a recession coming that could hurt demand eventually for Cotton. World production and supplies are going still lower due to bad weather in the growing season for major producers around the world, including India, Pakistan, and Australia. China had problems with its growing weather, too. Demand for US Cotton has been disappointing, as the weekly export sales reports have shown average demand at best since the start of the marketing year. China has not bought any US Cotton this year and has been active in other markets, especially India. US prices are down and China might start to look at the US crop, but there have been worries about the quality of the US crop due to some extreme growing conditions in Texas and the Southeast over the Summer and Fall. Ideas are that the quality worries have kept some importers of US Cotton away from the market.
Overnight News: The Delta should get mostly dry weather and mostly above normal temperatures. The Southeast will get rain or showers today and tomorrow, then drier weather. Temperatures should be above normal. Texas will have mostly dry weather after some rain and snow today. Temperatures will be below normal. The USDA average price is now 66.41 ct/lb. ICE said that certified stocks are now 136,039 bales, from 136,347 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 7000 and 6500 March. Support is at 7060, 7000, and 6940 March, with resistance of 7210, 7280, and 7420 March.
General Comments: FCOJ was lower on generally good weather conditions in Florida. The Oranges harvest is active in Florida, but will likely get delayed over the next couple of days. The fruit is abundant, but arrivals to packing houses and processors are reported behind last year. 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 all processors are open in the state to take packing house eliminations and fresh fruit.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get chances for scattered showers this week and above normal temperatures. The weekend should be dry.
Chart Trends: Trends in FCOJ are down with objectives of 122.00 January. Support is at 120.00, 117.00, and 114.00 January, with resistance at 125.00, 128.00, and 132.00 January.
General Comments: New York was lower on Wednesday, while London closed a bit higher. Speculators were good sellers in New York on ideas of increasing offers even through the Real rallied against the US Dollar. Brazil has a new president who is expected to make a lot of changes that would benefit farmers and lead to more selling. London held firm as there is little on offer from Indonesia and as the Vietnamese crop appears smaller than originally thought. Vietnamese internal prices have been holding stronger than expected at harvest time and futures have been responding. The Brazil crops are getting harvested now, and production estimates now range as high as 63.7 million bags. It is a big crop and the main reason to see prices in New York as low as they are right now. Vietnam is active in its harvest and middlemen were said to be active buyers of the harvest at levels just above the industry. Production in Vietnam is estimated less than 30 million bags due to uneven weather during the growing season. The harvest in both countries will wind down over the next couple of weeks, then attention will shift to production prospects for the next crop. The market in general expects lower production next year due to the biennial production cycle for the trees.
Overnight News: Certified stocks are lower today and are about 2.458 million bags. The ICO composite price is now 99.16 ct/lb. Brazil will get chances for scattered showers each day. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers or dry conditions. Vietnam will get mostly dry weather.
Chart Trends: Trends in New York are mixed. Support is at 99.00, 96.00, and 93.00 March, and resistance is at 104.00, 105.00 and 107.00 March. Trends in London are mixed. Support is at 1500, 1480, and 1470 March, and resistance is at 1540, 1560, and 1610 March.
General Comments: New York and London closed lower on news of weaker economic data around the world and on strength in the Brazilian Real against the US Dollar. The weekly charts in both markets suggest that futures are carving out some long-term lows, but the daily charts show that futures remain in down trends. The market is still keeping an eye on petroleum futures. Crude Oil shows signs of bottoming, but has not yet turned trends up. Brazil has been using a majority of its Sugarcane harvest to produce ethanol this year instead of Sugar, and there is some talk the mills might switch back to Sugar unless petroleum prices improve soon. There are doubts on just how much production will be seen this year in India. Northwest India had been experiencing hot and dry weather that could cut yields. It has not announced a reduction in its export goal of 5.0 million tons this year. Dry conditions continue in Brazil, the EU, and Russia, but conditions are mostly good in Ukraine. Very good conditions are reported in Thailand, but the next production could be less as farmers might switch to other crops due to low prices for Sugarcane.
Overnight News: Brazil will get chances for scattered showers each day. Temperatures should be near to below normal.
Chart Trends: Trends in New York are down with objectives of 1130 March. Support is at 1190, 1170, and 1140 March, and resistance is at 1220, 1230, and 1290 March. Trends in London are down with objectives of 316.00 March. Support is at 324.00, 319.00, and 316.00 March, and resistance is at 336.00, 342.00, and 345.00 March.
General Comments: Futures closed lower in New York and a little higher in London as the new main crop harvest comes to market in West Africa. New York was reacting to macroeconomic market action, while London reacted once again to the potential for a smaller West African crop and the potential for a weaker US Dollar. Trends are up in both markets, and the weekly charts show that a significant upside move is possible. The outlook for strong production in the coming year is still around, and ports are said to have plenty of Cocoa on offer. The crop production estimates might become smaller due to Harmattan winds and hot and dry conditions that have moved into West Africa. These conditions can take moisture out of the soil very rapidly and cause some very significant stress on the trees. 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 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 a little lower today at 3.464 million bags.
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2370, 2340, and 2320 March, with resistance at 2440, 2480, and 2540 March. Trends in London are up with no objectives. Support is at 1730, 1710, and 1700 March, with resistance at 1800, 1840, and 1870 March.