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 higher once last week after testing major support near 7000 on the weekly chart These levels held and a short covering rally was seen in the second half of the week. Weak overall demand continues to impact the US market. Traders were also looking at the big moves seen in the stock indices and petroleum complex and were wondering what that meant for Cotton prices. 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, and has been forced to import a lot of Cotton this year. 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. Even so, prices are cheap now and it is possible that prices are cheap enough to create new demand.
Overnight News: The Delta should get mostly dry weather after some rain today and 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 through Wednesday and light rain on Thursday. Temperatures will be above normal. The USDA average price is now 68.09 ct/lb. ICE said that certified stocks are now 127,267 bales, from 127,267 bales yesterday.
Chart Trends: Trends in Cotton are mixed to down with objectives of 7000 and 6500 March. Support is at 7200, 7060, and 7000 March, with resistance of 7420, 7650, and 7720 March.

DJ USDA Volume of Cotton Classed Report – Jan 4
Data quoted in bales for week ending Jan 3. Totals may not add due
to rounding. * denotes data withheld to avoid disclosure of individual
producer information. Source: USDA
Weekly Season Weekly Season
Southeast 165,554 3,451,990 Southwest 422,224 5,503,011
NC 9,482 676,352 Okla 27,014 279,095
SC 21,163 305,791 Texas 391,646 5,175,913
Ga 99,269 1,553,793 Kansas 3,564 48,003
Ala 31,581 683,789
Fla 3,470 64,470 Far West 30,075 362,839
Va 589 167,795 NM 3,451 24,466
Ariz 18,271 202,036
Delta 76,831 4,363,330 Calif 8,353 136,337
Miss 33,069 1,290,351
Tenn 3,067 758,569 Pima 33,594 473,365
Mo 5,217 740,061 Other 0 0
Ark 27,582 1,169,536 Total US 728,278 14,154,535
La 7,896 404,813 pct tenderable 62.7 67.0

FCOJ
General Comments: FCOJ was mostly higher on Friday, but lower for the week. The Oranges harvest is active in Florida as the weather is warm and mostly dry. 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. Mostly good conditions are reported in Brazil.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get chances for scattered showers and above normal temperatures. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are now 0n contracts.
Chart Trends: Trends in FCOJ are down with objectives of 122.00 January. Support is at 122.00, 120.00, and 117.00 January, with resistance at 126.00, 128.00, and 132.00 January.

DJ Florida FCOJ Movement and Pack – Jan 4
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 12/22/2018
Corresponding
Current Week Last
Week Season
12/22/2018 12/23/2017 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 206.92 174.97 18.3%
Retail/Institutional 5.29 7.56 -30.1%
Total 212.21 182.54 16.3%
Pack
Bulk 3.32 3.49 -4.9%
Retail/Institutional 1.42 1.69 -15.7%
Total Pack 4.74 5.17 -8.4%
Reprocessed -2.40 -3.19 -24.7%
Pack from Fruit 2.33 1.98 17.7%
Receipts & Losses
Net Gain or Loss -0.05 0.22 -78.1%
Imports – Foreign 7.66 2.39 221.1%
Domestic Receipts 0.03 0.09 -63.4%
Receipts of Florida Product
from Non-Reporting Entity – – NC
Chilled OJ used in FCOJ – – NC
Reprocessed FCTJ 0.02 – NA
Total Carry Over, Receipt & Pack
Bulk 215.50 177.97 21.1%
Retail/Institutional 6.71 9.25 -27.5%
Total 222.21 187.21 18.7%
MOVEMENT
Bulk
Domestic 4.02 3.49 15.5%
Exports 0.24 0.16 50.0%
Total (Bulk) 4.27 3.65 17.0%
Retail/Institutional
Domestic 1.60 1.46 10.0%
Exports – – NC
Total (Retail/Inst) 1.60 1.46 10.0%
Total Movement 5.87 5.10 15.0%
ENDING INVENTORY
Bulk 211.23 174.32 21.2%
Retail/Institutional 5.10 7.79 -34.5%
Ending Inventory 216.34 182.11 18.8%
Total Same
Total Season Period Last
To Date Season
22-Dec-18 23-Dec-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 22.00 23.78 -7.5%
Retail/Institutional 14.12 16.64 -15.1%
Total Pack 36.12 40.42 -10.6%
Reprocessed -23.24 -26.43 -12.1%
Pack from Fruit 12.88 13.98 -7.9%
Receipts & Losses
Net Gain or Loss -0.09 1.09 -91.8%
Imports – Foreign 35.15 43.06 -18.4%
Domestic Receipts 0.39 2.32 -83.2%
Receipts of Florida Product 0.04 0.03 36.4%
from Non-Reporting Entity 0.24 0.13 78.7%
Chilled OJ used in FCOJ 0.21 – NA
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 272.50 228.98 19.0%
Retail/Institutional 20.04 23.84 -15.9%
Total 292.54 252.81 15.7%
MOVEMENT
Bulk 58.14 52.55 10.6%
Domestic 3.12 2.11 47.9%
Exports 61.26 54.66 12.1%
Total (Bulk)
Retail/Institutional
Domestic 14.93 16.04 -6.9%
Exports – – NC
Total (Retail/Inst) 14.93 16.04 -6.9%
Total Movement 76.20 70.70 7.8%
ENDING INVENTORY
Bulk 211.23 174.32 21.2%
Retail/Institutional 5.10 7.79 -34.5%
Ending Inventory 216.34 182.11 18.8%

COFFEE
General Comments: Futures were a little higher in both markets last week in range trading. Speculators were on both sides of the market and cash markets were quiet. Currency relationships, and especially the rate between the US Dollar and the Brazilian Real, continue to be an important force in Coffee trading, but the trade seemed more concerned about the Dollar against major currencies last week. 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. Producers are also looking ahead to next year, and production could drop sharply in the off production year. El Nino remains in the forecast and Coffee areas in Brazil could be affected by drought that could hurt production even more. Many areas are dry now, and the forecast calls for more dry weather. 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 few weeks.

Overnight News: Certified stocks are lower today and are about 2.451 million bags. The ICO composite price is now 100.43 ct/lb. Brazil will get chances for scattered showers today and tomorrow, then drier weather. 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 up with objectives of 1600 and 1670 March. Support is at 1530, 1500, and 1480 March, and resistance is at 1560, 1610, and 1630 March.

SUGAR
General Comments: New York and London closed lower on follow through selling tied to news of weaker economic data around the world. 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. 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 northern Brazil, while the rains continue in the south. Conditions are mostly good in Ukraine. Russian production data shows good crops were harvested this year. 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 1170, 1140, and 1130 March, and resistance is at 1220, 1230, and 1290 March. Trends in London are down with objectives of 316.00 March. Support is at 328.00, 324.00, and 319.00 March, and resistance is at 332.00, 336.00, and 342.00 March.

COCOA
General Comments: Futures closed lower for the week in New York and lower in London as the new main crop harvest comes to market in West Africa. Trends are still up in both markets, and the weekly charts show that a significant up side move is possible. However, futures were unable to extend the up move last week, so a correction lower might be seen this week. The outlook for strong production in the coming year is still around, and ports are said to have plenty of Cocoa on offer. The main crop harvest is active in 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. 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 lower today at 3.416 million bags.
Chart Trends: Trends in New York are down with objectives of 2280, 2180, and 2100 March. Support is at 2320, 2290, and 2250 March, with resistance at 2380, 2440, and 2480 March. Trends in London are down with objectives of 1690 and 1500 March. Support is at 1700, 1660, and 1590 March, with resistance at 1740, 1750, and 1770 March.

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