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 closed higher after holding support at the recent contract lows. The USDA reports were bearish, but traders could not push futures to new lows on the news and covered short positions yesterday. USDA showed less production for Texas but increased production in the Delta and Southeast. Total US production was increased as was demand. The demand increase was less than the production increase, so USDA showed increased ending stocks at levels well above 7.0 million bales. The weather has been considered generally good for Cotton production in the US, but conditions have been stressful in Texas. It has been warm but there have been showers to support good development. The main exception has been in the Texas Panhandle where it remains hot and dry. Dryland crops in the region need rain. Conditions in the Delta and Southeast have been strong and have improved over the last few weeks. Crop development remains on about an average pace and bolls should start to form soon. Demand remains a big problem for Cotton. World demand has been less this year as China has not been buying. World prices have been lower as a result.
Overnight News: The Delta and Southeast should see scattered showers today, then drier weather. Temperatures should be mostly near to below normal. Texas will have mostly dry weather. Temperatures will trend to above normal. The USDA average price is now 54.38 ct/lb. ICE said that certified stocks are now 23,908 bales, from 23,996 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 5900, 5750, and 5720 December, with resistance of 6010, 6170, and 6290 December.
General Comments: FCOJ was near unchanged as the market keeps an eye on tropical weather developments in the Atlantic. Nothing is really showing in the Atlantic at this time but the most active part of the hurricane season is coming. There are some systems trying to form in the Gulf of Mexico this week but they do not appear to be a threat to Oranges. The weather in Florida remained tranquil as the state has seen frequent showers and storms that have greatly reduced irrigation needs. Trends are sideways to down on the daily charts and weekly charts as the market looks at a big orange crop and weak demand for FCOJ. Inventories in Florida are still 15% above a year ago. Fruit for the next crop is developing and are as big as baseballs. Crop conditions are called good. Mostly good conditions are reported in Brazil.
Overnight News: Florida should get scattered showers starting this weekend. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 92.00 September. Support is at 96.00, 95.00, and 92.00 September, with resistance at 101.00, 103.00, and 104.00 September.
General Comments: Futures closed higher in both markets as the Real recovered and as more reports of flooding from Vietnam sere seen. The Brazil harvest is now past 80% complete and is starting to become available so the country should be able to keep up a strong export pace for at least the next few months, but farmers and exporters might become more reluctant to sell if the Real starts to rally against the US Dollar. The Brazil harvest is moving along quickly and producers are trying to store the crop due to the current low prices. 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. 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, but showers are reported in the Central Highlands now and flooding is being reported in some areas. Sources in the central highlands suggest that a significant part of the crop in the region has been affected by the floods. Central America has Coffee on offer but bid prices from buyers have been very low.
Overnight News: ICE certified stocks are higher today at 2.365 million bags. The ICO daily average price is now 96.80 ct/lb. Brazil will get mostly dry conditions with near to above temperatures through Thursday, then near to below normal. Vietnam will see scattered and mostly light showers and storms.
Chart Trends: Trends in New York are down with objectives of 94.00 and 87.00 September. Support is at 93.00, 91.00, and 90.00 September, and resistance is at 97.00, 99.00 and 100.00 September. Trends in London are down with objectives of 1260 and 1240 September. Support is at 1260, 1250, and 1220 September, and resistance is at 1320, 1340, and 1380 September.
General Comments: Futures closed higher but remains in a trading range. Support came from the stronger Brazilian Real and on hopes for improving demand from China. Internal Sugar demand there has been strong and has supported internal prices this year. Bad weather has affected crops in Guangzi and Yunnan so domestic production is less. More imports might be needed. World supplies still appear ample for the demand potential. Reports from India indicate that the country still has a large surplus of White Sugar that probably must be exported. India is reporting much better monsoon rains after a very slow start to the season. There had been concerns that the Indian monsoon will not be strong this year and that Sugarcane production could be hurt, but these concerns are fading. Processing of Sugarcane in Brazil is slower and the pace of the crush is behind last year. Mills are refining mostly for ethanol right now as has been the case all season. The fundamentals still suggest big supplies, and the weather in Brazil is good enough and India has improved to support some of the big production ideas.
Overnight News: Brazil will get mostly dry weather. Temperatures should be near to below normal starting on Thursday.
Chart Trends: Trends in New York are mixed. Support is at 1150, 1130, and 1120 October, and resistance is at 1200, 1220, and 1230 October. Trends in London are mixed. Support is at 312.00, 310.00, and 307.00 October, and resistance is at 322.00, 328.00, and 331.00 October.
General Comments: Futures closed lower as the market continues to anticipate strong production and worries about demand potential. Some showers are reported in West Africa now and trees are reported to be in improved condition. Ideas are that the next crop will be good as the rest of West Africa also is reporting mostly good conditions. The harvest will start in the Fall. Growing and harvesting conditions in Asia are also reported to be good. The harvest is ongoing amid showers, but good progress in the harvest is expected at this time. More and more Asian Cocoa has been staying at home and processed in Indonesia for export in the region. Demand in Asia has been growing and Indonesia has been eager to be the primary source of Cocoa. Traders worry about the world economic health, and especially the health of the EU economy. The EU eats so much chocolate and buys so much Cocoa that any blip in demand would have a bigger effect on prices.
Overnight News: Scattered and light showers are expected in West Africa. Temperatures will be on both sides of 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 4.155 million bags.
Chart Trends: Trends in New York are down with no objectives. Support is at 2150, 2120, and 2090 September, with resistance at 2200, 2230, and 2260 September. Trends in London are down with no objectives. Support is at 1660, 1650, and 1630 September, with resistance at 1730, 1750, and 1780 September.