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 last week and trends are sideways on the daily and the weekly charts. Weak overall demand continues to impact the US market, but word of smaller supplies is providing the support. US producers report that there is still a lot of Cotton out in the fields to be harvested, and the quality of the fiber is going down. At least some of the unharvested crop might have to be abandoned. 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 and Pakistan are expected to import more Cotton this year to cover the short domestic production. 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. China has not bought any US Cotton this year and has been active in other markets, especially India. The US has had disputes this year with other major importers such as Turkey, and this could impact demand for the US. 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. US producers report that there is still a lot of Cotton out in the fields to be harvested, and the quality of the fiber is going down. At least some of the unharvested crop might have to be abandoned.
Overnight News: The Delta should get mostly dry weather and above normal temperatures, but more rain appears early next week. The Southeast will get rain early next week. Temperatures should be near to above normal. Texas will have mostly dry weather. Temperatures will be on both sides of normal. The USDA average price is now 69.88 ct/lb. ICE said that certified stocks are now 120,823 bales, from 120,823 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 7280, 7220, and 7200 March, with resistance of 7460, 7650, and 7720 March.

DJ USDA Volume of Cotton Classed Report – Jan 25
Data quoted in bales for week ending Jan 24. Totals may not add due
to rounding. * denotes data withheld to avoid disclosure of individual
producer information. Source: USDA
Weekly Season Weekly Season
Southeast 127,054 3,870,883 Southwest 286,631 6,591,366
NC 5,505 697,180 Okla 33,331 386,485
SC 11,291 346,120 Texas 244,416 6,132,402
Ga 79,156 1,800,773 Kansas 8,884 72,479
Ala 20,664 769,035
Fla 4,768 77,772 Far West 32,153 467,898
Va 5,670 180,003 NM* – 33,406
Ariz 23,588 275,679
Delta 20,447 4,487,211 Calif 8,565 158,813
Miss 10,616 1,356,938
Tenn – 760,638 Pima 28,673 592,314
Mo – 754,544 Other 0 0
Ark 8,922 1,202,480 Total US 494,958 16,009,672
La 909 412,611 pct tenderable 56.0 66.0

FCOJ
General Comments: FCOJ was mixed on Friday, but slightly lower for the week. Trends are down on the daily charts and remain down on the weekly charts. 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, but the weather there is hot and dry again.
Overnight News: Florida should get showers on Monday. Temperatures will average near to below normal. Brazil should get mostly dry weather and above normal temperatures. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are now 586 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 116.00 March. Support is at 117.00, 114.00, and 111.00 March, with resistance at 123.00, 124.00, and 126.00 March.

COFFEE
General Comments: Futures were higher on Friday and a little higher for the week in both New York and London. Weekly chart trends are trying to turn up in New York, but are sideways in London. Brazil should be getting past the gut slot of its harvest, and the strong export pace from the country should start to turn down. Brazil had a big production year for the current crop, but the next crop should be less as it is the off-year for production. Ideas are that the current production of 62 or 63 or more million bags can become about 52 million bags next 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. This is great for the harvest, but bad for the production prospects for next year. 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, but London is lower, anyway, as it absorbs harvest and speculative selling. The Coffee Association estimated production at about 25 million bags, but this is considered a low ball estimate by the trade.
Overnight News: Certified stocks are lower today and are about 2.480 million bags. The ICO composite price is now 103.45 ct/lb. Brazil will get mostly dry weather until scattered showers appear on Friday. 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 to up with objectives of 109.00 and 115.00 March. Support is at 104.00, 103.00, and 100.00 March, and resistance is at 107.00, 110.00 and 112.00 March. Trends in London are mixed. Support is at 1520, 1500, and 1480 March, and resistance is at 1550, 1560, and 1610 March.

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 01/22/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Robusta Coffee Futures and Options – ICE Futures Europe
141,853 82,214 65,314 12,370 4,095 2,497
Percent of Open Interest Represented by Each Category of Trader
100.0% 58.0% 46.0% 8.7% 2.9% 1.8%
Number of Traders in Each Category
152 53 44 16 6 9
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
8,229 36,236 10,487 3,053 1,374 17,120
Percent of Open Interest Represented by Each Category of Trader
5.8% 25.5% 7.4% 2.2% 1.0% 12.1%
Number of Traders in Each Category
14 33 14 7 9 16
Nonreportable Positions
=======================
Long Short
=======================
5,882 4,729
Percent of Open Interest Represented by Each Category of Trader
4.1% 3.3%

SUGAR
General Comments: Both markets moved lower on Friday and lower for the week as UNICA showed a sharp year on year increase in Sugarcane crushing in Brazil for the first half of January. The year to date crush remains behind a year ago. The weekly charts in both markets show mixed trends. Petroleum futures appear to have made some short-term lows at this time, and petroleum futures strength seems to be helping change the tone in Sugar. Brazil has been using a majority of its Sugarcane harvest to produce ethanol this year instead of Sugar. Unica reported that In the season from April 1 through Jan. 16, the mills crushed 562.7 million tons of cane, down 3.6% from the same period a year earlier. Sugar production fell nearly 27% to 26.4 million tons, and ethanol output rose almost 20% to 30.2 billion liters. The production mix for the season through Jan. 16 was 35.5% sugar to 64.5% ethanol. A year earlier, the mix was 46.9% sugar and 53.1% ethanol. 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, but it appears that the country will not export nearly that much. Some industry sources told wire services that exports could be only half of the target. The government is now exploring ethanol use for the surplus. Dry conditions continue in northern Brazil and there are frequent rains in Rio Grande do Sul. 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. Thailand has crushed 45.1 million tons of Sugarcane this year, from 34.6 million last year. It has produced 4.5 million tons of Sugar, from 3.4 million tons last year.
Overnight News: Brazil will mostly dry weather in the north and showers in the south. More widespread showers are likely on Friday. Temperatures should be near to above normal.
Chart Trends: Trends in New York are down with objectives of 1230 and 1160 March. Support is at 1230, 1220, and 1190 March, and resistance is at 1260, 1280, and 1300 March. Trends in London are down with objectives of 336.00 and 316.00 March. Support is at 336.00, 331.00, and 328.00 March, and resistance is at 345.00, 348.00, and 351.00 March.

DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 01/22/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE White Sugar Futures and Options- ICE Futures Europe
96,977 46,887 70,460 12,520 1,421 1,309
Percent of Open Interest Represented by Each Category of Trader
100.0% 48.3% 72.7% 12.9% 1.5% 1.3%
Number of Traders in Each Category
132 51 56 10 3 5
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
16,259 7,835 9,034 2,312 200 3,535
Percent of Open Interest Represented by Each Category of Trader
16.8% 8.1% 9.3% 2.4% 0.2% 3.6%
Number of Traders in Each Category
33 8 18 7 4 10
Nonreportable Positions
=======================
Long Short
=======================
5,120 3,183
Percent of Open Interest Represented by Each Category of Trader
5.3% 3.3%

COCOA
General Comments: Futures closed lower for the week in New York and lower in London as the new main crop harvest continues in West Africa. Trends are down. 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. The winds have stayed to the north of primary production areas so far this season. 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 3.426 million bags.
Chart Trends: Trends in New York are down with objectives of 2180, 2100, and 2050 March. Support is at 2230, 2220, and 2200 March, with resistance at 2310, 2370, and 2380 March. Trends in London are down with objectives of 1500 March. Support is at 1590, 1580, and 1560 March, with resistance at 1650, 1670, and 1580 March.

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 01/22/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Cocoa Futures and Options – ICE Futures Europe
321,773 177,511 212,437 32,393 10,251 20,343
Percent of Open Interest Represented by Each Category of Trader
100.0% 55.2% 66.0% 10.1% 3.2% 6.3%
Number of Traders in Each Category
164 55 46 17 8 14
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
28,957 18,339 24,864 3,684 351 32,288
Percent of Open Interest Represented by Each Category of Trader
9.0% 5.7% 7.7% 1.1% 0.1% 10.0%
Number of Traders in Each Category
28 20 18 12 8 22
Nonreportable Positions
=======================
Long Short
=======================
1,734 2,901
Percent of Open Interest Represented by Each Category of Trader
0.5% 0.9%

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