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 for the week as futures moved sharply lower on Friday. Trends have turned down on the daily and weekly charts with the price action of late last week. The market was hurt by the threats President Trump made to increase tariffs on Mexico due to the immigration problems along the southern border. It is another demand threat for Cotton that is already experiencing lost business potential with China and Turkey and could get hurt if Vietnam is targeted for tariffs later on. 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 Delta might cause lower yields this Fall. It has been hot and dry for the last few weeks in the Southeast, and crops of all kinds in the region need water and cooler weather. Precipitation moved into the region over the weekend. 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. Below normal rains are now in the forecast for both countries in June.
Overnight News: The Delta and Southeast should get drier weather except some storms near the Atlantic coast. Temperatures should be mostly above normal. Texas will have scattered showers. Temperatures will average near to above normal. The USDA average price is now 60.52 ct/lb. ICE said that certified stocks are now 85,903 bales, from 85,903 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 6540 and 6240 July. Support is at 6550, 6520, and 6450 July, with resistance of 6610, 6690, and 6850 July.

COT — Supplemental Report – Option and Futures Combined Positions as of June 04, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COTTON NO. 2 – ICE FUTURES U.S.
CFTC Code #033661 Open Interest is 277,336
: Positions :
: 32,155 65,482 74,626 68,838 99,904 87,180 21,335 262,800 261,349: 14,536 15,988
: Changes from: May 28, 2019 (Change in open interest: -4,443) :
: -228 -4,801 -1,110 -4,345 -777 -742 296 -6,425 -6,392: 1,982 1,949
: Percent of Open Interest Represented by Each Category of Trader :
: 11.6 23.6 26.9 24.8 36.0 31.4 7.7 94.8 94.2: 5.2 5.8
: Total Traders: 300 Number of Traders in Each Category :
: 75 101 88 60 63 47 24 233 231:
——————————————————————————————————————-

FCOJ
General Comments: FCOJ was a little lower after an early week push to higher values ran out of steam. Speculators have been buying in anticipation of the hurricane season. The season started on June 1, and a tropical system formed in the Gulf of Mexico that brought 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. Trends are sideways to down on the daily charts and sideways weekly charts as the market looks at a big orange crop and weak demand for FCOJ. USDA production estimates are above 70 million boxes and represent a remarkable recovery from the greening disease and the small crops of just a couple of years ago. 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. The increase is coming from less demand along with the increased domestic production. Fruit for the next crop is developing and are 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 mixed to down with objectives of 88.00, 85.00, and 81.00 July. Support is at 98.00, 97.00, and 95.00 July, with resistance at 103.00, 106.00, and 108.00 July.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of June 4, 2019
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
FRZN CONCENTRATED ORANGE JUICE – ICE FUTURES U.S. (CONTRACTS OF 15,000 POUNDS) :
CFTC Code #040701 Open Interest is 25,371 :
: Positions :
: 13,608 10,639 1,778 0 141 441 7,392 446 1,302 1,001 4,107 :
: Changes from: May 28, 2019 :
: -118 314 -47 0 0 -9 -235 -6 -45 -32 344 :
: Percent of Open Interest Represented by Each Category of Trader :
: 53.6 41.9 7.0 0.0 0.6 1.7 29.1 1.8 5.1 3.9 16.2 :
: Number of Traders in Each Category Total Traders: 88 :
: 26 16 7 0 . 4 22 4 17 7 13 :
—————————————————————————————————————-

COFFEE
General Comments: Futures were lower for the week despite a firm Real. The market saw a dramatic move lower at the middle of the week that ended the current rally attempt for both markets. There are reasons to think that the long-term down move is coming to an end. 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. Forecasts for cold air were made for southern Coffee areas of Brazil, but the temperature outlook was not cold enough to cause any concerns about damage to Coffee. It is at least a reminder of what time of year it is in Brazil and the potential for damage due to cold and freezing temperatures. Vietnam is also reporting lower yields for the current crop as the weather was not good for flowering earlier in the year. There have been some hot and dry spells that have hurt yield and quality for these crops as well. 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 2.384 million bags. The ICO daily average price is now 100.72 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 mixed. Support is at 98.00, 97.00, and 95.00 July, and resistance is at 103.00, 106.00 and 108.00 July. Trends in London are mixed. Support is at 1400, 1380, and 1360 July, and resistance is at 1460, 1490, and 1520 July.

COT — Supplemental Report – Option and Futures Combined Positions as of June 04, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COFFEE C – ICE FUTURES U.S.
CFTC Code #083731 Open Interest is 401,659
: Positions :
: 43,115 84,227 112,812 149,723 159,220 74,585 32,572 380,235 388,832: 21,423 12,827
: Changes from: May 28, 2019 (Change in open interest: -14,853) :
: -2,174 -23,503 -4,330 -7,430 11,725 912 -1,495 -13,022 -17,604: -1,831 2,751
: Percent of Open Interest Represented by Each Category of Trader :
: 10.7 21.0 28.1 37.3 39.6 18.6 8.1 94.7 96.8: 5.3 3.2
: Total Traders: 498 Number of Traders in Each Category :
: 155 126 153 137 122 46 28 424 360:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 06/04/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Robusta Coffee Futures and Options – ICE Futures Europe
155,276 88,728 68,726 15,301 11,769 3,283
Percent of Open Interest Represented by Each Category of Trader
100.0% 57.1% 44.3% 9.9% 7.6% 2.1%
Number of Traders in Each Category
152 53 46 18 6 11
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
5,082 30,928 14,855 2,071 633 19,840
Percent of Open Interest Represented by Each Category of Trader
3.3% 19.9% 9.6% 1.3% 0.4% 12.8%
Number of Traders in Each Category
12 30 16 12 10 22
Nonreportable Positions
=======================
Long Short
=======================
6,116 5,242
Percent of Open Interest Represented by Each Category of Trader
3.9% 3.4%

SUGAR
General Comments: Futures closed higher as the Real remained stronger. The move higher in the Real increased world prices, as did more reports 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 there are some ideas that Sugarcane production was not all that strong this year due to uneven weather. Chart patterns on the weekly charts are sideways in both markets. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support some of the big production ideas. Demand seems to be average and routine. 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. Even so, there are now a lot of private forecasts that June rains in both India and Pakistan will be below average. 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.

DJ Sugar Market Set to Slip Into Deficit in 2019-20: ISO
By Joe Wallace
Lower sugar output in Brazil and some other key producers will pull down the surplus in global supplies in the 2018-19 season and lead to a deficit in 2019-20, the International Sugar Organization said Monday.
World output of sugar will fall by 2.5% to 178.7 million tons in 2018-19 while consumption will grow by 1.6% to 176.9 million tons, the ISO said in a quarterly outlook. That would lead to a surplus of 1.8 million tons, an 80% decline from the surplus of 9.1 million tons seen in 2017-18.
The ISO tentatively forecasts an end to sugar surpluses in 2019-20, predicting that demand will outweigh production by around 3 million tons, and that continued growth in consumption will widen that gap to roughly 6 million tons the following year.
The forecasts add to evidence that sugar markets are tightening after years of oversupply that have pushed raw prices down to levels rarely seen since the financial crisis, hurting farmers, mills and trading houses. Sugar output has outstripped demand for six of the past eight years.
Still, the ISO cautioned that the pain for these groups may not be over even if the market slips into a deficit next year, since large inventories accumulated during surplus years will continue to hang over prices.
“High accumulated stocks still need to be absorbed before prices can return to more remunerative levels for producers,” the ISO said. “The immediate fundamentals are clearly bearish, and against this background, it is hard to be optimistic regarding the future of sugar prices in the remaining part of the October/September cycle.”
The ISO noted that its projected surplus for 2018-19, while considerably smaller than last year’s, is still higher than the 0.6 million ton surplus it forecast back in February.
The main decline in output this year will come in second-largest producer Brazil, the ISO said, forecasting an 8% fall to 29.1 million tons from 31.8 million tons in 2017-18.
Rising output in India, the world’s largest sugar producer, will partially offset that. The ISO predicts that Indian sugar production will increase by 1.9% to 33 million tons, from 32.4 million tons in 2018-19.
Thailand is also seeing “spectacular results,” the ISO said, forecasting near-record output of 14.6 million tons.

COT — Supplemental Report – Option and Futures Combined Positions as of June 04, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SUGAR NO. 11 – ICE FUTURES U.S.
CFTC Code #080732 Open Interest is 1,176,147
: Positions :
: 107,749 285,491 230,018 460,343 503,359 287,695 85,780 1,085,805 1,104,648: 90,342 71,499
: Changes from: May 28, 2019 (Change in open interest: -8,626) :
: 4,998 -12,722 -25,947 18,352 41,187 -173 2,054 -2,770 4,573: -5,856 -13,199
: Percent of Open Interest Represented by Each Category of Trader :
: 9.2 24.3 19.6 39.1 42.8 24.5 7.3 92.3 93.9: 7.7 6.1
: Total Traders: 272 Number of Traders in Each Category :
: 64 67 93 87 79 32 22 236 219:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 06/04/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE White Sugar Futures and Options- ICE Futures Europe
111,179 55,411 54,906 16,771 2,282 1,141
Percent of Open Interest Represented by Each Category of Trader
100.0% 49.8% 49.4% 15.1% 2.1% 1.0%
Number of Traders in Each Category
140 52 46 13 4 6
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
16,529 35,343 9,270 3,404 290 3,446
Percent of Open Interest Represented by Each Category of Trader
14.9% 31.8% 8.3% 3.1% 0.3% 3.1%
Number of Traders in Each Category
20 25 13 8 6 13
Nonreportable Positions
=======================
Long Short
=======================
5,207 4,501
Percent of Open Interest Represented by Each Category of Trader
4.7% 4.0%

COCOA
General Comments: Futures closed at or near the highs of the week as buying returned to the market. The ICCO released its latest estimates a week ago and called for a slight increase in world production. It cited strong production in West Africa that would more than offset reduced production from Asia and Latin America. However, the Ghana Cocoa authorities noted disease problems in its crop and said that mid crop production could be hurt. The disease could hurt the mid crop and probably will affect the next main crop that will be harvested at the end of the year. The mid crop harvest is winding down 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. The weekly arrivals pace is about 15% higher than a year ago and is holding this level. Demand appears strong and the market saw stronger than expected grind data when the quarterly grind is released in the EU, North America, and Asia in the last month. 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 lower today at 4.628 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 2570 July. Support is at 2450, 2400, and 2380 July, with resistance at 2480, 2510, and 2550 July. Trends in London are mixed. Support is at 1760, 1740, and 1730 July, with resistance at 1800, 1810, and 1820 July.

COT — Supplemental Report – Option and Futures Combined Positions as of June 04, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COCOA – ICE FUTURES U.S.
CFTC Code #073732 Open Interest is 302,774
: Positions :
: 37,871 39,807 64,851 125,789 164,031 57,702 20,901 286,213 289,589: 16,561 13,184
: Changes from: May 28, 2019 (Change in open interest: -2,591) :
: -167 -814 -3,814 4,171 1,820 -2,597 -1,568 -2,406 -4,377: -185 1,786
: Percent of Open Interest Represented by Each Category of Trader :
: 12.5 13.1 21.4 41.5 54.2 19.1 6.9 94.5 95.6: 5.5 4.4
: Total Traders: 224 Number of Traders in Each Category :
: 69 61 80 40 38 35 15 194 155:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 06/04/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Cocoa Futures and Options – ICE Futures Europe
333,433 176,416 224,509 32,641 32,172 23,733
Percent of Open Interest Represented by Each Category of Trader
100.0% 52.9% 67.3% 9.8% 9.6% 7.1%
Number of Traders in Each Category
142 46 41 16 8 11
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
45,662 4,274 21,055 4,179 213 24,360
Percent of Open Interest Represented by Each Category of Trader
13.7% 1.3% 6.3% 1.3% 0.1% 7.3%
Number of Traders in Each Category
32 9 12 13 9 19
Nonreportable Positions
=======================
Long Short
=======================
5,387 3,117
Percent of Open Interest Represented by Each Category of Trader
1.6% 0.9%

DJ Nigeria Midcrop Cocoa Season Over, Association Says
By Obafemi Oredein
Special to Dow Jones Newswires
IBADAN, Nigeria-Nigeria’s 2018-19 midcrop cocoa is over and expectations of high production haven’t been met, the head of the national cocoa association said Friday.
“We have gone past the midcrop. We are looking out for the main crop as we did not get up to expectation[s] of the midcrop,” said Sayina Riman, president of the Cocoa Association of Nigeria, blaming the shortfall on the country’s long dry spell.
The crop has ended a month ahead of the expected time in Nigeria, where the harvest usually runs from March or April to July.
Mr. Riman said in April that CAN projected midcrop cocoa production for the season would increase by 31% on year, with beans expected to be bigger than the previous year.
However, a long dry spell between February and early May stunted the growth of the midcrop and CAN lowered its forecast, saying that midcrop output may instead decline by 7% on year.
As the dry spell intensified with a dearth of rainfall, cocoa traders said in May that the midcrop output may decline by 12%. This was in spite of some heavy rains from the middle of the month.
Cocoa officials this week declared that the dry spell has ended in the country’s southwest and southeast cocoa regions following heavy rains, adding that the new downpours bode well for the 2019-20 main crops.
Mr. Riman explained that the overall output of the crop has not been calculated as the association “needs to collate what has been put together so that we can give you the authentic [production] figure.”
According to CAN, the midcrop represents 30% of Nigeria’s cocoa production of 280,000 to 300,000 metric tons per season. But that percentage could be lower this season, said a trader.

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