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 higher as the market saw the potential for damaging rains to hit the Southeast from hurricane Darian. The export sales report was disappointing. The system looks ready to hit Florida over the weekend as at least a category 3 hurricane but forecasts also suggest that the system could move into Georgia and the Carolinas early next week as a major rain system. It still remains hot and dry in Texas Panhandle areas and this has supported the market as well. Export demand remains weak and India has moved to increase tariffs to halt imports as its new crop develops and comes to harvest. Crop condition ratings were down again this week as the Texas Panhandle crop continues to slide due to hot and dry weather in the region. Some of the crop is irrigated, but even these crops appear to be showing some stress. Crops in the Delta and Southeast appear to be in mostly very good condition. These areas have seen plenty of precipitation and more moderate temperatures. Certified stocks are about half of what they were a month ago and it looks like producers are not selling. They are upset with the prices and are in no rush to sell at current levels.
Overnight News: The Delta should be dry and Southeast should see scattered showers this weekend and into next week. Temperatures should be mostly near to below normal early this week and near to above normal later this week. Texas will have mostly dry weather. Temperatures will average above normal after a cooler day today. The USDA average price is now 54.14 ct/lb. ICE said that certified stocks are now 12,802 bales, from 13,204 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 5800, 5750, and 5720 December, with resistance of 5950, 6000, and 6020 December.
General Comments: FCOJ was higher as hurricane Darian started to take shape and could move to Florida. It became a hurricane yesterday and appears to be headed for landfall in Florida later this weekend. It is now forecast to become a category 4 hurricane before entering central or southern Florida. The system hit some of the Caribbean islands with moderate to heavy rains. There has been good weather in Florida until now and ideas of good oranges crop production potential. The weather in Florida remained tranquil as the state has seen frequent showers and storms that have aided in development in the fruit. Inventories in Florida are still 17% 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. Heavy rain is possible in central and southern areas from the hurricane. 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 up with objectives of 115.00 November. Support is at 106.00, 105.00, and 101.00 September, with resistance at 109.00, 113.00, and 117.00 September.
General Comments: Futures closed lower in both markets as the Real keeps working lower. Ideas are that the export pace from Brazil remains strong and roaster buying remains generally hard to find. The new harvest is now almost over and is available so the country should be able to keep up a strong export pace for at least the next few months. Almost half of the crop has been sold by producers according to private analysts in the country. 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 recently and some flooding was reported. Conditions are called good right now. Central America has Coffee on offer and is selling at cheaper prices.
Overnight News: ICE certified stocks are lower today at 2.347 million bags. The ICO daily average price is now 94.86 ct/lb. Brazil will get mostly dry conditions with near to above temperatures. Vietnam will see scattered showers and storms mostly in the north. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 374 contracts.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 95.00, 94.00, and 91.00 December, and resistance is at 98.00, 101.00 and 103.00 December. Trends in London are mixed to up with objectives of 1420 and 1490 November. Support is at 1300, 1290, and 1260 November, and resistance is at 1370, 1400, and 1430 November.
DJ European Coffee Stockpiles Rose Again in June -ECF
By Joe Wallace
European coffee stockpiles continued to rise in June, in fresh evidence of bountiful supplies that have pushed prices close to their lowest level in over a decade.
Inventories at the continent’s six main coffee ports rose to 721,590 metric tons, the European Coffee Federation said on Thursday. That represents an increase of 15,367 tons, or 2.2%, from May.
The ECF said stocks of coffee rose at Antwerp, Hamburg, Le Havre and Trieste but fell in Genoa and Barcelona.
Booming coffee supplies and signs of weakening demand have weighed on global prices for much of 2019, pushing benchmark arabica futures down by 5% to 97 cents a pound.
Many traders are betting that prices will go lower still.
As of Aug. 20, hedge funds and other speculative investors held 78,416 short positions in arabica futures and options, according to the Commodity Futures Trading Commission. That’s more than double the 31,111 long positions that they held.
General Comments: Futures closed lower in both markets as ideas of big supplies continued to circulate. Ideas of big Indian supplies available to the market that will end up keeping prices very cheap as India dumps it Sugar onto the world keeps sellers interested. 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 above normal monsoon rains after a very slow start to the season. There are concerns that the Indian monsoon will not be strong this year and that Sugarcane production could be hurt. 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 above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1110 and 1060 October. Support is at 1110, 1090, and 1060 October, and resistance is at 1150, 1180, and 1200 October. Trends in London are mixed to down with objectives of 362.00 and 292.00 October. Support is at 302.00, 299.00, and 296.00 October, and resistance is at 311.00, 314.00, and 319.00 October.
General Comments: Futures closed lower in New York and in London. Trends on the daily charts turned down again with te price action of yesterday. The weather in West Africa is still a feature. The weather in Ivory Coast has improved due to reports of frequent showers. Some showers in West Africa now help relieve stress on trees. Ideas are that the next crop will be good. 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.
Overnight News: Scattered showers and storms 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 little changed today at 4.009 million bags. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 2,118 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 2160 and 2100 December. Support is at 2170, 2140, and 2110 December, with resistance at 2220, 2280, and 2300 December. Trends in London are down with objectives of 1660 and 1620 December. Support is at 1680, 1670, and 1640 December, with resistance at 1720, 1730, and 1750 December.