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 lower and trends are starting to turn down on the charts. Weak overall demand continues to impact the US market, but word of smaller supplies is providing the support. Ideas are that Cotton production can be reduced in the Friday USDA reports as some of the crop was left in the fields well into the Winter season. Demand could also be less as demand reports have not been real strong this year and as China is not reported to be buying in the US 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. 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.
Overnight News: The Delta and Southeast should get episodes of precipitation all week, than a dry weekend and above normal temperatures. Temperatures should be below normal this weekend. Texas will have mostly dry weather. Temperatures will be mostly below normal through Thursday, then mostly above normal. The USDA average price is now 68.19 ct/lb. ICE said that certified stocks are now 127,025 bales, from 122,205 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 7220, 7200, and 7160 March, with resistance of 7400, 7480, and 7650 March.

DJ Research Firm Cuts World Cotton Consumption Outlook — Market Talk
0831 ET – Cotton market research firm Cotlook has cut its forecast for world cotton consumption for the 2018/19 marketing year by 265,000 metric tons — bringing its latest estimate to 26.11M tons. The firm also lowers its production projections down by 260,000 tons, to 25.683M tons. According to Cotlook, uncertainty abounds in the cotton market thanks to the ongoing trade dispute between the US and China. Should a deal be reached before a moratorium on new tariffs expires in March, then Chinese buying will widen the supply deficit seen in the market. Cotton futures on the ICE have fallen to start February, but are up 1% since the start of the year — at 72.88 cents per pound. (kirk.maltais@wsj.com, @kirkmaltais)

DJ On-Call Cotton – Feb 4
As of Dec 28. 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 27,622 30,181 -2,559 15,751 15,301 450
May 19 21,371 21,856 -485 2,063 2,390 -327
Jul 19 30,162 30,688 -526 2,579 2,671 -92
Dec 19 17,820 17,569 251 20,586 20,394 192
Mar 20 6,326 6,335 -9 227 227 0
May 20 2,600 2,512 88 0 0 0
Jul 20 3,017 3,017 0 0 0 0
Dec 20 1,298 1,254 44 3,681 3,681 0
Total 110,216 113,412 -3,196 44,887 44,664 223
Open Change
Int
Mar 19 125,063 123,711 1,352
May 19 37,747 37,250 497
Jul 19 17,161 17,570 -409
Oct 19 8 8 0
Dec 19 30,824 30,609 215
Mar 20 1,193 1,055 138
May 20 179 160 19
Jul 20 92 92 0
Dec 20 1,051 1,041 10
Total 213,318 211,496 1,822

FCOJ
General Comments: FCOJ was lower as the weather in Florida remains generally favorable. A reversal higher often happens at this time of year. The market has absorbed speculative long liquidation and producer selling through the Winter as no freeze has developed. Longer range forecasts show that there is little chance for a freeze to develop this month, and then it will be getting to be too late for a freeze to be seen in the state of Florida. 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, and some beneficial rains should be seen this week.
Overnight News: Florida should get dry weather. Temperatures will average above normal. Brazil should get mostly dry weather and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. 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 reaction to more reports of dry weather in Brazil and due to reduced offers from Vietnam and other Asian countries due to the Lunar New Year. 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. Coffee areas in Brazil could be affected by the current drought that could hurt production even more. Many areas are dry now, but showers are in the forecast for this week. Vietnam is active in its harvest. Selling will be less this week due to the Lunar New Year holiday. Production in Vietnam is estimated less than 30 million bags due to uneven weather during the growing season.
Overnight News: Certified stocks are lower today and are about 2.477 million bags. The ICO composite price is now 103.56 ct/lb. Brazil will get mostly dry weather, but showers are likely on Wednesday. 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 to up with objectives of 1600, 1650, and 1670 March. Support is at 1530, 1510, and 1500 March, and resistance is at 1590, 1610, and 1630 March.

DJ Cameroon’s 2018 Arabica Coffee Exports Up 7% on Year – NCCB
By Emmanuel Tumanjong
Special to Dow Jones Newswires
YAOUNDE, Cameroon-Exports of arabica coffee from Cameroon during the 2017/2018 season rose 7% year-on-year, according to figures released Tuesday by the director-general of the National Cocoa and Coffee Board, Michael Ndoping.
The data showed that 2,079 metric tons of arabica coffee was exported last year, compared with 1,943 tons the year before.
The West African nation’s total coffee output for the season stood at 2,495 tons, a rise of 18.5% compared with the previous harvest, the NCCB said.
Mr. Ndoping said good weather helped boost harvests, but that financial difficulties and high input prices had hurt Cameroon’s coffee production in recent years.
Cameroon’s arabica season begins in October and runs until September.

DJ Cameroon’s Robusta Coffee Exports Up On Year -NCCB
By Emmanuel Tumanjong
Special to Dow Jones Newswires
YAOUNDE, Cameroon-Robusta coffee exported by Cameroon in the just-ended 2017/2018 season soared 19%, compared with the previous season, the West African nation’s National Cocoa and Coffee Board said late Monday.
Cameroon exported 18,644 metric tons of robusta coffee in the 2017/2018 season, up 19% from 12,528 tons the season before, according to a statement published by the NCCB.
The country produced 22,820 metric tons of robusta coffee during the season, 12.58% higher than the 20,270 tons harvested the season earlier, the NCCB said.

SUGAR
General Comments: Both markets were a little higher. The weekly charts in both markets show mixed trends and the market appears to be searching for a direction at this time. Brazil has been producing ethanol and has reduced Sugar offers this year, and the market acts as if it needs a little more Sugar. Analysts say that there is plenty of Sugar around and another surplus is expected, but the price action is stronger than the analyst comments might suggest.. 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. 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.
Overnight News: Brazil will mostly dry weather, but showers are possible on Wednesday. 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 316.00 March. Support is at 334.00, 331.00, and 328.00 March, and resistance is at 348.00, 351.00, and 353.00 March.

COCOA
General Comments: Futures closed sharply higher yesterday on ideas that the market had become oversold and that Cocoa prices were too cheap. 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, and Ivory Coast arrivals are now 1.376 million tons, up about 9% from last year. Harmattan winds and hot and dry conditions 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, but so far the winds have not been a problem. Conditions appear good in East Africa and Asia. Demand is said to be improving as offers from the new harvest start to increase. Cumulative arrivals in Brazil are now 198,900 tons, from 179,246 tons last year.
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 sharply higher today at 3.660 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2190, 2160, and 2150 March, with resistance at 2230, 2280, and 2300 March. Trends in London are mixed. Support is at 1600, 1570, and 1560 March, with resistance at 1650, 1670, and 1680 March.

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