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 before the next round of USDA production and supply and demand reports that will be released on Friday. USDA showed very good harvest progress in its reports Monday night and the harvest is now slightly ahead of last year and the five-year average. Some buying interest came from talk that the US and China were close to a partial deal that would allow agricultural exports to flow to China in exchange for a truce in the tariff increases. The deal signing has been pushed back until December as both sides try to resolve the final issues, but good progress is still being reported. China is pushing for mutual tariff reductions that would be part of any Phase One deal. There are reports that it is buying high quality fiber from Brazil and would like to buy from the US as well once a trade deal is finally done. Export demand for the US has not been real strong as world economies are turning softer. The harvest is active. Quality reports have been high until now and the crop yields appear to be strong. Western areas are also reporting good quality and yields. Good quality and yields are being reported in the Delta and Southeast.
Overnight News: The Delta and Southeast should see dry weather except for some rain late in the week and below normal temperatures. Texas will have mostly dry conditions this weekend but rain is possible on Thursday and Friday. Temperatures will be below normal. The USDA average price is now 60.83 ct/lb. ICE said that certified stocks are now 39,233 bales, from 36,110 bales yesterday.
Chart Trends: Trends in Cotton are mixed to down with objectives of 63.00, 62.00, and 55.90 December. Support is at 6340, 6290, and 6220 December, with resistance of 6460, 6500, and 6550 December.
General Comments: FCOJ was lower yesterday in consolidation trading. Today could be uneventful as well as the market really has nowhere to go. The fundamentals remain negative due to the big production potential and weaker demand ideas. Demand remains a problem as many now prefer to get Vitamin C in other ways. Good growing conditions and increased oranges production estimates by USDA have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no hurricanes or other severe storms so far this year. Some areas have been dry lately and irrigation is being used. Crop yields and quality should be high for Florida this year and USDA could increase production estimates again on Friday.
Overnight News: Florida should get mostly dry weather but showers about Friday. Temperatures will average mostly above normal but below normal this weekend. Brazil should get mostly dry weather and above normal temperatures. ICE said that 6 notices were posted for delivery against November contracts and that total deliveries for the month are now 206 contracts. USDA said that net Upland Cotton export sales were 164,500 bales this year and 118,600 bales next year. Net Pima sales were 30,000 bales this year and 32,500 bales next year.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 93.00 and 85.00 January. Support is at 96.00, 95.00, and 92.00 January, with resistance at 101.00, 102.00, and 104.00 January.
General Comments: Futures were higher in both markets on reports of a lack of Coffee on offer and high differentials in Brazil. Trends are up in New York and London. The market has been stronger overall despite ideas of big new crop production in both Brazil and Vietnam as exporters are running tight on supplies. The Brazilian crop is developing but some exporters say they are out of previous crop supplies to sell. This includes Cooxupe, the biggest exporter of Coffee in the world. The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low to provide profits. Vietnam exports remain behind a year ago, but the market anticipates bigger offers as producers and traders find that they need to move some product. Brazil forecasts call for scattered showers through the weekend. Many now anticipate a big crop from Brazil next year. Vietnam crops are thought to be big despite some uneven growing conditions this year.
Overnight News: ICE certified stocks are lower today at 2.227 million bags. The ICO daily average price is now 105.75 ct/lb. Brazil will get scattered showers and above normal temperatures. Vietnam will see scattered showers in all areas.
Chart Trends: Trends in New York are up with no objectives. Support is at 103.00, 102.00, and 100.00 December, and resistance is at 106.00, 108.00 and 109.00 December. Trends in London are mixed to up with objectives of 1350, 1370, and 1410 January. Support is at 1300, 1280, and 1260 January, and resistance is at 1340, 1360, and 1390 January.
General Comments: Futures closed lower in both markets after making new highs for the move. Trends are still generally up on the charts for both markets, but both markets had a chance to create some significant upside potential on the charts and declined to make that move. Ideas of big supplies are not helping the bulls, but those supplies do not appear to be available in the cash market at this time. Reports indicate that little is on offer from India. Thailand might also have less this year due to reduced planted area. However, most think there is still more than enough Sugar for any demand and that India will have to sell sooner or later. Reports from India indicate that the country is seeing relatively good growing conditions and still holds large inventories from last year. However, these supplies are apparently not moving and this could be due to less government subsidy for mills and exporters. Brazil is starting to produce a little more Sugar and a little less Ethanol as mills react to prices and market conditions. Reports of improving weather in Brazil imply good crops there.
Overnight News: Brazil will get scattered showers. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1280 and 1310 March. Support is at 1240, 1220, and 1210 March, and resistance is at 1290, 1300, and 1320 March. Trends in London are mixed to up with objectives of 348.00 March. Support is at 338.00, 334.00, and 331.00 March, and resistance is at 345.00, 348.00, and 351.00 March.
General Comments: Futures closed a little lower and held to the recent trading range. Harvest is active in West Africa and reports are that good volumes and quality are expected. Chart trends are mixed in New York but still mostly down in London. The reports from West Africa imply that a big harvest is possible in the region. Ivory Coast arrivals are strong and are above year ago levels. The weather in Ivory Coast has improved due to reports of frequent showers. The precipitation is a little less now so there are no real concerns about disease. Ideas are that the next crop will be very good. Both Ivory Coast and Ghana are doing what they can do boost Cocoa prices and maintain good earnings for producers by paying a living wage differential and are looking to regulate the flow of Cocoa into the world market.
Overnight News: Dry conditions or light showers are expected in West Africa. Temperatures will be near to below 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 3.301 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2450, 2420, and 2390 December, with resistance at 2510, 2530, and 2550 December. Trends in London are mixed to down with objectives of 1850, 1790, and 1660 December. Support is at 1870, 1850, and 1830 December, with resistance at 1920, 1940, and 1950 December.
DJ Nigeria Could Lose 17% of Cocoa Harvest in 2019-20 Season, Says Industry Body
By Obafemi Oredein
IBADAN, Nigeria-The Cocoa Association of Nigeria said Wednesday that it expects the country to lose 17% of its cocoa crop harvest in the 2019-20 season because of weather problems and disease that have damaged the crop in producing states.
“Cocoa is scarce across the country at the moment,” said CAN President Sayina Riman, due to low production engendered by the bad weather and disease.
In August, Mr. Riman had said Nigeria expected to produce 305,000 to 310,000 tons of cocoa in the current season that began in September/October.
He admitted then that rainfall level was high with the likelihood of the black pod disease outbreak hitting cocoa farms and damaging the crop but was optimistic that the production forecast could be met.
Mr. Riman said the country’s southwest region has been hit hard.
The southwest states of Ogun, Oyo, Osun, Ondo and Ekiti account for 70% of the country’s annual cocoa production.
“Nationally, we are expecting a drop from what I did forecast three months ago. In terms of production we are going to see our forecast of 310,000 tons going down by 17%,” said Mr. Riman.
Rainfall was heavy in September and October causing flooding and the black pod disease in cocoa farms and damaging cocoa crop.