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

Jack Scoville

Wednesday, January 22, 2020

Price Futures Group, CBOT
Chicago, IL
(312) 264-4322

San Salvador, El Salvador (503) 2260-7806 jslsadecv@comcast.net


General Comments: Cotton was sharply lower last week as there was no demand news from China. A catalyst for the recent rally has been the trade deal between the US and China. China has been buying Cotton from the US and Brazil as it needs higher quality Cotton to blend with its domestic production. It did not really buy last week but will probably resume buying once the lunar new year passes at the end of this month. The market has not been able to move a lot in terms of price for the last month as the harvest has been ongoing amid some stressful conditions. The harvest is now about over and certified stocks are now leveling off.
Overnight News: The Delta and Southeast should see frequent periods of precipitation over the middle and latter parts of this week. Temperatures should be near to above normal. Texas will have mostly dry conditions except for some rain on Tuesday. Temperatures will average near to above normal. The USDA average price is now 66.79 ct/lb. ICE said that certified stocks are now 6,792 bales, from 6,792 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7240 March. Support is at 7040, 6970, and 6900 March, with resistance of 7170, 7190, and 7330 March.

General Comments: FCOJ held nearby support and closed a little higher. Futures are still trading at the lower levels of the trading range on the weekly charts but have not been able to move to new lows in the last week. There is a big crop of Oranges out there with not many outlets for consumption. Good growing conditions and increased oranges production estimates by USDA this season have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no severe storms so far this year. Many areas have been dry lately and irrigation is being used. Crop yields and quality should be high for Florida this year as the harvest continues. Inventories of FCOJ in the state are high and are more than 34% above last year.
Overnight News: Florida should get mostly dry conditions. Temperatures will average near to above normal. Brazil should get dry conditions through the weekend and near to above normal temperatures. ICE said that 0 notices were posted for delivery against January contracts and that total deliveries for the month are now 4 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 95.00 March. Support is at 95.00, 92.00, and 89.00 March, with resistance at 98.00, 99.00, and 100.00 March.

General Comments: Futures were lower in New York and higher in London. Speculators were the best sellers in New York but were small buyers in London. It rained in Brazil over the weekend. The weekly charts suggest that further price weakness is possible. The Brazilian crop is developing well. Brazil offers were said to increase from the country due to the weakness in the Real. It is dry in other parts of Latin America. Central America has had less than normal rains, especially in Honduras. The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low. Vietnam exports remain behind a year ago, but the market anticipates bigger offers. Vietnamese crops are expected to be big despite uneven growing conditions earlier in the year.
Overnight News: ICE certified stocks are higher today at 2.132 million bags. The ICO daily average price is now 105.31 ct/lb. Brazil will get drier weather this weekend with near to above normal temperatures. Vietnam will see mostly dry conditions.
Chart Trends: Trends in New York are down with objectives of 105.00 and 100.00 March. Support is at 110.00, 106.00, and 104.00 March, and resistance is at 116.00, 120.00 and 123.00 March. Trends in London are mixed to down with objectives of 1280, 1260, and 1240 March. Support is at 1310, 1290, and 1270 March, and resistance is at 1370, 1390, and 1410 March.

General Comments: The markets closed higher again as India is still not exporting much Sugar. Brazil could step up its export pricing program due to a weaker US Dollar and the lack of offers from India. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. 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 despite relatively strong world prices. Reports of improving weather in Brazil imply good crops there.
Overnight News: Brazil will get drier weather this weekend. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1450 March. Support is at 1420, 1410, and 1370 March, and resistance is at 1460, 1470, and 1480 March. Trends in London are up with no objectives. Support is at 394.00, 387.00, and 383.00 March, and resistance is at 403.00, 406.00, and 409.00 March.

DJ Damage to Thai Sugar Crop Lifts Prices — Market Talk
1336 GMT – Sugar prices are rising as damage to the crop in Thailand stokes competition among traders to secure the sweetener. Refined-sugar futures are 0.8% higher at $406.40 a metric ton in London, and raw-sugar futures are up 1.2% at 15 U.S. cents a pound in New York. Over the season as a whole, rainfall has been close to average in Thailand, the world’s fourth-largest sugar producer. But most of the precipitation took place from August to mid-September, meaning water failed to get to the roots, causing plants to suffer during the dry months, Robin Shaw of Marex Spectron says. Serious damage has already been done to the current crop, and Shaw says it’s vital that lots of rain falls at the end of the dry season in March. (joe.wallace@wsj.com)

General Comments: Futures closed higher in New York and in London and made new highs for the move. Funds and other speculators were the best buyers in New York and in London. Producers were sellers in both markets in light volumes. Harvest is now active in West Africa and the results so far are very good. Ivory Coast arrivals are now estimated at 1.281 million tons, up 1.2% from last year. Ideas are that demand is currently very strong due to the current price action. The reports from West Africa imply that a big harvest is possible in the region. The weather in Ivory Coast is good. The weather is too dry in Nigeria and there are fears that the mid crop is not developing well at this time.
Overnight News: Scattered showers are expected in southern sections of 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 higher today at 2.944 million bags.
Chart Trends: Trends in New York are up with no objectives. Support is at 2750, 2730, and 2680 March, with resistance at 2840, 2870, and 2900 March. Trends in London are up with no objectives. Support is at 2000, 1980, and 1960 March, with resistance at 2030, 2060, and 2090 March.

DJ Wind Damages Cocoa Seedlings in Southwest Nigeria, Traders Say
By Obafemi Oredein
Special to Dow Jones Newswires
IBADAN, Nigeria–Cocoa seedlings planted in Nigeria’s largest-producing region have been damaged by dry weather and the harmattan season winds, traders and farmers said Tuesday.
Jibade Adeniji, a trader in Ibadan, capital of Oyo state in the southwest region, said soil moisture had been reduced and cocoa seedlings planted during last year’s rainy season are dying. A lack of rainfall since November in the southwest cocoa region and the harmattan winds have worsened the climate, he said, and “unless there is some rainfall before the end of the month it will be difficult for the seedlings to survive.”
The harmattan is a dry, cold and dusty wind blowing into West Africa from the Sahara Desert between December and January or February. It dries soil moisture rapidly on cocoa farms, and when it gets severe hinders development of cocoa pods and causes immature pods to ripen earlier than expected, Mr. Adeniji said.
The southwest may lose 40% to 45% of the current season’s cocoa seedlings, a cocoa official said, “unless there is rainfall very soon.”
Cocoa seedlings are planted to increase production and rehabilitate old cocoa farms, but failure of the seedlings could result in lower cocoa output, he said.
A farmer in Idi Ayunre area in Oyo state, Tiamiyu Ajao, said the current dry season in the southwest is destroying seedlings and hindering development of the 2019-20 midcrop cocoa.
“The midcrop harvest is now being threatened by drier weather, the harmattan and a lack of rainfall,” Mr. Ajao said.
The midcrop cocoa is harvested from April to July or August. The southwest accounts for 70% of Nigeria’s annual cocoa production of 280,000 to 300,000 metric tons, according to the Cocoa Association of Nigeria.

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