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 a little higher, but failed after trading close to resistance at 7400 March on the daily charts The price action was disappointing or the bulls who were hoping for a new and sustained up trend to begin. The Indian crop remains smaller, but the US crop appears big enough to meet any and all of the demand that has been much reduced so far this year. 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. India has said that it could be a strong importer this year due to crop losses there. Pakistan has also faced crop losses. 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 and above normal temperatures until more rain appears on Friday and Saturday. The Southeast will get drier weather until rain appears on Saturday. Temperatures should be above normal. Texas will have mostly dry weather through Thursday and light rain on Friday. Temperatures will be above normal. The USDA average price is now 68.32 ct/lb. ICE said that certified stocks are now 127,937 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 7260, 7200, and 7060 March, with resistance of 7420, 7650, and 7720 March.
General Comments: FCOJ was higher again yesterday, but still is near its lowest levels for the marketing year. 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 until some showers appear on Friday. Temperatures will average above normal today and tomorrow, then near to below normal. Brazil should get chances for scattered showers and above normal temperatures. ICE said that 66 notices were posted for delivery today and that total deliveries for the month are now 66 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.
General Comments: Futures were a little higher in New York in sympathy with the dry weather outlook for Brazil and the lower Real against the US Dollar. London was slightly lower in range trading. Cash markets were quiet. Currency relationships between the US Dollar and the Brazilian Real continue to be an important force in Coffee trading, especially in New York as there is little other news to talk about. 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 expect production to drop next year as it will be the off-year in the biennial cycle. 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. The harvest will wind down this month. Production in Vietnam is estimated less than 30 million bags due to uneven weather during the growing season.
Overnight News: Certified stocks are higher today and are about 2.452 million bags. The ICO composite price is now 101.39 ct/lb. Brazil will get drier weather this week and scattered showers this weekend. 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 to 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.
General Comments: New York and London closed sharply higher on a weaker Real against the US Dollar and stronger world petroleum prices. The market is still keeping an eye on petroleum futures, and March Crude Oil futures are now testing an important resistance area. 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, and industry sources told news wires that there is plenty of Sugar in the country to sell. 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 mixed. Support is at 1250, 1220, and 1190 March, and resistance is at 1290, 1300, and 1320 March. Trends in London are mixed. Support is at 340.00, 339.00, and 336.00 March, and resistance is at 345.00, 348.00, and 351.00 March.
General Comments: Futures closed higher in both New York and London on weather concerns. Trends are still up in both markets, and the weekly charts show that a significant up side move is possible. It is becoming a weather market due to the hot and dry conditions seen in West Africa.. The outlook for strong production in the coming year is still around, and ports are said to have plenty of Cocoa on offer. Ivory Coast arrivals are now estimated at 1.121 million tons this year, from 960,000 tons last year. The main crop harvest is active in West Africa. Main crop production ideas for Ivory Coast and Ghana are being reduced, and ideas are increasing that the mid crop harvest will be much smaller than normal. 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 3.394 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2350, 2320, and 2290 March, with resistance at 2440, 2480, and 2540 March. Trends in London are mixed to down with objectives of 1690 and 1500 March. Support is at 1710, 1700, and 1660 March, with resistance at 1750, 1770, and 1800 March.