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 lower yesterday. Futures remain mostly in a trading range, and the trading has had a firm tome over the last few weeks. Hopes for Chinese demand and persistent cold and wet weather in growing areas are providing support. The USDA reports were considered mostly neutral as USDA made no changes to any of the estimates in the monthly supply and demand tables. The trade had anticipated slightly less production and slightly less export demand. Everyone is waiting for the resolution of the US-China trade dispute, and the US government is indicating that a deal is going to be more difficult to achieve by the end of the month. Both sides are negotiating the final points, with the US worried about verification of the movers to fulfill commitments and the Chinese worried that they might give up too much to get a deal. It still looks like a deal will be done eventually, but it will take longer than had been indicated to get the last parts completed. The US weather continues to feature a lot of rain in the south, and fieldwork and initial planting in far southern areas is mostly delayed. Current long-range forecasts suggest that wet conditions will continue in the Southeast and that Texas could see unsettled and colder than normal weather at least through the end of this month.
Overnight News: The Delta and Southeast should get rains over the middle of this week, than dry weather. Temperatures should average above normal through Thursday, then below normal. Texas will have some big rains today, then mostly dry weather. Temperatures will trend to above normal today and tomorrow, then trend to below normal. The USDA average price is now 67.59 ct/lb. ICE said that certified stocks are now 112,228 bales, from 123,219 bales yesterday. ICE said that 30 notices were posted for delivery against March contracts and that total deliveries for the month are now 114 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 7250, 7190, and 7100 May, with resistance of 7410, 7490, and 7510 May.
General Comments: FCOJ was higher in recovery trading. A stronger close today could mean that the market has finally bottomed. Trends are down on both sets of charts on ideas that production remains strong and demand does not. The market has absorbed speculative long liquidation and producer selling through the Winter as no freeze has developed. The Oranges harvest remains active in Florida as the weather is mostly dry. The fruit is abundant. 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. Flowering for the next crop is ongoing, and fruit is starting to form on some trees. Mostly good conditions are reported in Brazil, and some beneficial rains should be seen this week. USDA left Florida production estimates unchanged at 77 million boxes last week.
Overnight News: Florida should get mostly dry weather. Temperatures will average above normal. Brazil should get scattered showers and above normal temperatures. ICE said that 12 delivery notices were posted against March contracts and that total deliveries for the month are now 312 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 116.00, 115.00, and 112.00 May, with resistance at 121.00, 123.00, and 126.00 May.
General Comments: Futures were lower in New York on fund selling. Prices closed slightly lower in London. New York trends are down, but chart trends are sideways in London. Speculators are keeping the pressure on the New York market as they fear big supplies of Arabica with not enough demand. Big exports as reported by the ICO for January and from Brazil all season long imply that the market is well supplied. Brazil export data has shown a strong pace at over 3 million bags for the second month in a row. The ICO has forecast a surplus year again this year, and inventory data from ICO and others shows ample supplies. Prices are moving below profitable levels for Colombia, and have been below profitable levels for producers in Central America. Further weakness will cause farmers in Brazil, Peru, and Vietnam to start losing money as well. Showers are in the forecast for this week. Vietnam is active in its harvest, but producers are not willing to sell at current prices. It is still dry, and production potential for the next crop is being hurt.
Overnight News: Certified stocks are unchanged today and are about 2.491 million bags. The ICO composite price is now 98.01 ct/lb. Brazil will get scattered showers. Temperatures should be above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get mostly dry weather. ICE said that 0 delivery notices were posted against March contracts and that total deliveries for the month now total 179 contracts.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 97.00, 94.00, and 91.00 May, and resistance is at 101.00, 103.00 and 105.00 May. Trends in London are mixed to down with objectives of 1500 and 1470 May. Support is at 1500, 1480, and 1450 May, and resistance is at 1540, 1550, and 1560 May.
General Comments: Both markets were higher on some short covering from speculators. Charts for both markets had shown oversold conditions. Chart patterns on the weekly charts are still down. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support big production ideas. UNICA reported that the center south produced 2,000 tons of Sugar in the first half of February, compared to 5,000 tons in the previous two-week period. The mills crushed just 280,000 tons of Sugarcane, compared to 563,000 tons the previous period. Brazil weather is improving in all areas as there is less rain in southern areas and more to the north. Brazil has been using a larger part of its Sugarcane harvest to produce ethanol this year instead of Sugar, but Thailand has shown increased production this year. Ideas that production in India and Pakistan is being hurt by news that Indian mills are asking the government not to force them to sell Sugar into a depressed world market. They do not want to lose more money as they have already needed government subsidies to keep working. Very good conditions are reported in Thailand.
Overnight News: Brazil will get showers. Temperatures should be above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1200 and 1170 May. Support is at 1220, 1210, and 1200 May, and resistance is at 1250, 1280, and 1300 May. Trends in London are mixed to down with no objectives of 342.00 May. Support is at 336.00, 335.00, and 333.00 May, and resistance is at 343.00, 347.00, and 352.00 May.
General Comments: Futures closed higher. London was the stronger market. The main crop harvest is active in West Africa, and Ivory Coast arrivals are strong. Growing conditions are generally good in West Africa. Rains are in the forecast for the next couple of days that will improve soil moisture conditions, and the cold and dry Harmattan winds of early this week will be a thing of the past. Nigeria is reporting losses to its crops due to recent hot and dry weather. Cameroon is also reporting less production and prices there are reported strong. Conditions appear good in East Africa and Asia. Ivory Coast arrivals are now estimated at 1.587 million tons, from 1.441 million last year. Brazil Cocoa arrivals are now 221,089 tons, from 197,509 tons last year.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average near to 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 4.215 million bags. ICE said that there were 0 notices posted for delivery against March contracts and that total deliveries for the month are now 1,086 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2170, 2150, and 2120 May, with resistance at 2230, 2240, and 2250 May. Trends in London are mixed. Support is at 1650, 1620, and 1600 Mary, with resistance at 1720, 1730, and 1750 May.