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 lower in correction trading and in reaction to the progress reports yesterday. US Cotton planting progress remains good. Cotton planting progress has been on par with the five year average and ideas of big crops are keeping prices weaker. There are some concerns that the cold May weather from Texas to the East Coast might cause lower yields this Fall. Also pressuring the market are forecasts for big production around the world. USDA sees no shortage of Cotton anywhere in the coming year. However, it could be that the Indian monsoon gets off to a slow start and production potential gets hurt there and in Pakistan. It has been dry so far and is turning hotter, but this is considered pre monsoonal weather. Ideas are that the monsoon will get started in the next few days. It has also been hot and dry in central Russia and Kazakhstan, but more moderate conditions are possible next week.
Overnight News: The Delta and Southeast should get scattered showers each day. Temperatures should be mostly above normal. Texas will have scattered showers through Thursday, then mostly dry weather. Temperatures will average near to above normal. The USDA average price is now 63.90 ct/lb. ICE said that certified stocks are now 81,218 bales, from 82,517 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7190 and 7560 July. Support is at 6800, 6740, and 6680 July, with resistance of 6980, 7150, and 7240 July.
General Comments: FCOJ was lower after prices made new highs for the move. The buying seemed to dry up after futures moved to new highs for the week, and prices retraced a little bit but still held strong. The hurricane season started on June 1, and a tropical system formed in the Gulf of Mexico and threatened to bring some significant rains to the Houston area. This is away from any big citrus production, but the storm means that the season has started right on time. In the meantime, it is turning hot and dry in Florida, and the system in the Gulf is not expected to hit the state. Trends are sideways to up on the daily charts and sideways weekly charts as the market looks at a big oranges crop and weak demand for FCOJ. Inventories in Florida are still 17% above a year ago. That means that there should be no shortage of oranges available to the market to make FCOJ. Fruit for the next crop is developing and are about as big as golf balls. Crop conditions are called good. Irrigation is being used a few times a week to help protect crop condition. Mostly good conditions are reported in Brazil as the harvest there is active.
Overnight News: Florida should get mostly dry weather. Temperatures will average near to above normal. Brazil should get scattered showers late this week and below normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 116.00 July. Support is at 105.00, 102.00, and 100.00 July, with resistance at 113.00, 117.00, and 120.00 July.
General Comments: Futures were higher on speculative buying and not much selling interest. The ICO released its monthly report and noted lower production potential in both Brazil and Vietnam due to bad weather earlier in the growing season. The Brazil harvest is moving along at a slow pace. Reports indicate that the yields are not real strong and that the quality of the crop is poor due to extreme weather seen early in the growing season. Buyers are now more actively pursuing other origins, especially for certified or higher end coffees. Roasters were scale down buyers on the extended down move and now have more than ample supplies in house or on the way. 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. The charts show that both markets could trade in a sideways to up pattern for now as the market looks at weather and production potential of the next crop.
Overnight News: ICE certified stocks are lower today at 2.390 million bags. The ICO daily average price is now 104.08 ct/lb. Brazil will get mostly dry conditions, with near to above normal temperatures. Vietnam will see scattered showers and storms.
Chart Trends: Trends in New York are up with no objectives. Support is at 101.00, 99.00, and 97.00 July, and resistance is at 106.00, 108.00 and 110.00 July. Trends in London are up with no objectives. Support is at 1460, 1440, and 1410 July, and resistance is at 1490, 1520, and 1540 July.
DJ World Coffee Surplus to Narrow This Year: ICO — Market Talk
1436 GMT – The surplus in the world coffee market will shrink by almost a fifth this season, says the International Coffee Organization. The ICO expects demand will outstrip supply by 3.41 million 60-kilogram bags, down 18% from 4.16 million bags in the 2017-18 season. Still, a second consecutive year of surplus could keep a lid on coffee prices, which have risen in line with the Brazilian real in recent weeks but remain near their lowest levels of the past decade. The coffee season began in October last year and runs until this September. (email@example.com)
DJ Weather Casts Doubt on Brazilian Coffee Crop: ICO — Market Talk
1520 GMT – The ICO says Brazil’s coffee crop, which follows a two-year cycle, will likely be large by the standards of smaller ‘off’ seasons. However, “recent reports of adverse weather have tempered these expectations,” it says. The organization didn’t put a number on its forecast for harvest. Concerns that adverse weather could affect the size and quality of Brazil’s crop have helped push coffee prices higher since mid-May. (firstname.lastname@example.org)
DJ Vietnam Behind Projected Fall in Coffee Surplus: ICO — Market Talk
1437 GMT – Vietnam is partly behind a projected fall in this year’s global coffee surplus, according to the ICO’s monthly report. “Productivity [in Vietnam] has been affected by low water levels for irrigation and low prices that have discouraged farmers from investing in their coffee trees,” the ICO says. Vietnamese output in 2018-19 will be 3.4% lower than last year’s harvest at 29.5 million bags, the organization predicts. (email@example.com)
General Comments: Futures closed higher as the Real held strong and buying was found due to the weather in Brazil and India. Trends on the daily charts turned up with the price action yesterday. The move higher in the Real increased world prices, as did news that Brazilian processors prefer to make Ethanol for the domestic market rather than Sugar for the export market. Processing of Sugarcane in Brazil has been off to a slow start and yields have been down due to the wet weather seen in central-south growing areas. There are concerns that the Indian monsoon will not be strong this year and that Sugarcane production could be hurt. It is hot and dry there so far, but there are signs that the monsoon is ready to develop. The government weather services there is looking for a normal monsoon, but many private forecasters expect less rain and warmer temperatures than normal. Very good conditions are reported in Thailand. Demand for Sugar has been average, and demand for ethanol is reported to be increasing.
Overnight News: Brazil will get mostly dry weather or light showers. Temperatures should be near to above normal.
Chart Trends: Trends in New York are up with objectives of 1290 and 1370 July. Support is at 1210, 1200, and 1180 July, and resistance is at 1250, 1300, and 1330 July. Trends in London are up with objectives of 346.00 and 362.00 August. Support is at 332.00, 329.00, and 325.00 August, and resistance is at 339.00, 344.00, and 345.00 August.
General Comments: Futures moved lower on what appeared to be follow through speculative selling. The charts show that a short-term top has formed, so the selling seemed to be mostly long liquidation. The mid crop harvest is active in West Africa and reports are generally positive, although some Nigerian producers have complained that the weather is not giving them the best conditions for top yields. Ivory Coast arrivals are strong as are exports. Growing conditions are generally good in West Africa. Periods of showers and cooler temperatures were beneficial, and most in West Africa expect a very good mid crop harvest. Cameroon and Nigeria are reporting less production and prices there are reported strong. Conditions appear good in East Africa and Asia, but East Africa has been a little dry as has Malaysia.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near 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 little changed today at 4.636 million bags.
Chart Trends: Trends in New York are down with objectives of 2300, 2250, and 2210 July. Support is at 2330, 2310, and 2280 July, with resistance at 2390, 2410, and 2440 July. Trends in London are down with objectives of 1740, 1700, and 1640 July. Support is at 1730, 1720, and 1710 July, with resistance at 1780, 1800, and 1810 July.