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 mixed to a little lower yesterday despite a strong weekly export sales report. The sales report was five weeks old and did not impact prices. The CFTC On Call report is just as old. All eyes remain on Washington and the US-China trade talks that appear to be moving along fairly well. Weak overall demand continues to impact the US market, but word of smaller supplies is providing the support. The December 20 export sales report showed stronger demand than had been seen up until the shutdown. 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. 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 above normal temperatures, but more rain appears at the end of the week. The Southeast will get rain late this week. Temperatures should be below normal. Texas will have mostly dry weather. Temperatures will be on both sides of normal, with warm readings by the end of the week. The USDA average price is now 69.90 ct/lb. ICE said that certified stocks are now 117,208 bales, from 117,138 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 7300, 7280, and 7220 March, with resistance of 7460, 7650, and 7720 March.
DJ On-Call Cotton – Jan 31
As of Dec 21. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Mar 19 30,181 40,079 -9,898 15,301 15,256 45
May 19 21,856 22,146 -290 2,390 1,953 437
Jul 19 30,688 31,812 -1,124 2,671 2,659 12
Dec 19 17,569 17,055 514 20,394 19,624 770
Mar 20 6,335 6,175 160 227 227 0
May 20 2,512 2,481 31 0 0 0
Jul 20 3,017 2,545 472 0 0 0
Dec 20 1,254 1,254 0 3,681 3,549 132
Total 113,412 123,547 -10,135 44,664 43,268 1,396
Open Change
Int
Mar 19 123,711 130,073 -6,362
May 19 37,250 37,423 -173
Jul 19 17,570 18,773 -1,203
Oct 19 8 6 2
Dec 19 30,609 31,665 -1,056
Mar 20 1,055 1,046 9
May 20 160 115 45
Jul 20 92 33 59
Dec 20 1,041 912 129
Total 211,496 220,046 -8,550

FCOJ
General Comments: FCOJ was higher yesterday and reacted in part to the cold weather currently in the Midwest and Southeast. Trends are mixed to 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 dry weather today and tomorrow, then showers on Thursday and Friday. Temperatures will average below normal. Brazil should get mostly dry weather and above normal temperatures.
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 in both markets as speculators bought in reaction to a higher Brazilian Real against the US Dollar. The buying interest held into the close and appeared to be both short covering and new buying. Speculators were also the best sellers as producers still want higher prices before selling. 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 is 62 or 63 million bags and about 52 million bags next year. Vietnam is active in its harvest. 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 2.484 million bags. The ICO composite price is now 103.58 ct/lb. Brazil will get mostly dry weather. Temperatures should be 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 103.00, 102.00, and 100.00 March, and resistance is at 107.00, 110.00 and 112.00 March. Trends in London are mixed. Support is at 1530, 1510, and 1500 March, and resistance is at 1550, 1560, and 1610 March.

SUGAR
General Comments: Both markets were higher yesterday on speculative buying tied to strength in the Brazilian Real against the US Dollar. The currency moves made Sugar from Brazil more expensive in the world market, but reports on wire services the past few days indicate that there is still plenty of Sugar available for sale. 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. The surplus seems to be getting bigger as the Sugar Association announced increased supplies in its reports this week. Dry conditions continue in northern Brazil and there are frequent rains in Rio Grande do Sul. Some precipitation is possible in the north late this weekend. 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 mostly dry weather. Temperatures should be above normal.
Chart Trends: Trends in New York are mixed. Support is at 1250, 1230, and 1220 March, and resistance is at 1300, 1310, and 1330 March. Trends in London are mixed to down with objectives of 336.00 and 316.00 March. Support is at 338.00, 336.00, and 331.00 March, and resistance is at 348.00, 351.00, and 353.00 March.

COCOA
General Comments: Futures closed lower yesterday on follow through selling. Trends are down in New York and down in London on the daily charts. The outlook for strong production in the current year continues, and ports are said to have plenty of Cocoa on offer. The main crop harvest is starting to wrap up in West Africa. 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, and midcrop conditions are called good. 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 higher today at 3.568 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2180, 2100, and 2080 March. Support is at 2160, 2150, and 2100 March, with resistance at 2230, 2280, and 2300 March. Trends in London are down with objectives of 1500 March. Support is at 1560, 1540, and 1520 March, with resistance at 1600, 1620, and 1650 March.

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