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 sharply lower in reaction to news of the spread of the Caronavirus. It has now spread to South Korea, Italy, and Iran. The spread created new fears about the health of the world economy and that meant the potential for less demand for US Cotton. The number of new cases being reported inside China continues to drop. Futures got close to or touched limit down in some cases before rebounding. A catalyst for any rally attempt 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 has not bought from the US in the last few weeks but will probably resume buying now that the trade deal is signed. Big buying from China could rally the market, but futures have already moved significantly higher in anticipation of any Chinese buying and the actual buying could become anti climatic. The Coronavirus has the chance to hurt trade in Cotton between the two countries. Chinese buyers might need less Cotton now as factories inside the country were closed for an extended holiday. All are reopen now, but the manufacturing pace has been slow.
Overnight News: The Delta and Southeast should see some big rains today and tomorrow. Temperatures should average near to below normal after snow Warmer days today and tomorrow. Texas will have mostly dry weather. Temperatures will trend to below normal. The USDA average price is now 62.24 ct/lb. ICE said that certified stocks are now 34,062 bales, from 34,062 bales yesterday. ICE said that 45 notices were posted for delivery against March Cotton contracts and that total deliveries for the month are now 285 contracts.
Chart Trends: Trends in Cotton are down with objectives of 6860 and 6270 May. Support is at 6730, 6640, and 6600 May, with resistance of 6830, 6850 and 6900 May.
General Comments: FCOJ was lower in the wake of the Coronavirus news. It has spread to South Korea, Italy, and Iran and it is this spread that is causing fears of a global economic decline. The reports of new cases inside China are on the decline. 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. Inventories of FCOJ in the state are high and are more than 26% above last year.
Overnight News: Florida should get mostly dry conditions except for some scattered showers on Wednesday. Temperatures will average near to above normal through Wednesday, then near to below normal. Brazil should get scattered showers through the weekend and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 96.00, 95.00, and 92.00 March, with resistance at 100.00, 101.00, and 102.00 March.
General Comments: Futures were lower in New York and lower in London. Futures remain in trading ranges for now. The selling came from news that the Caronavirus has spread to South Korea, Italy, and Iran. The number of reported cases is not large, but the fact that it is spreading caused panic selling based on the potential for the world economic scene to take a big hit from the virus. New cases in China remain on a downward trend. Support came from a lack of supply in Brazil at this time and on concern that previous bad growing conditions have hurt production potential in the Cerrado, home of about 10% of all Brazil production.. Rains and showers were reported in Brazil Coffee areas over the weekend. 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 2.164 million bags. The ICO daily average price is now 103.52 ct/lb. Brazil will get scattered showers with near to below normal temperatures. Vietnam will see mostly dry conditions in the south and some light to moderate showers in the north. ICE said that 66 notices were posted for delivery against March contracts and tat total deliveries for the month are now 68 contracts.
Chart Trends: Trends in New York are mixed. Support is at 105.00, 102.00, and 100.00 May, and resistance is at 111.00, 112.00 and 114.00 May. Trends in London are mixed. Support is at 1260, 1230, and 1200 May, and resistance is at 1300, 1320, and 1340 May.
General Comments: New York and London closed lower due to fears about the spread of the coronavirus. It has spread to South Korea, Italy, and Iran. The volume of new cases reported by China appears to be decreasing. However, the new locations for the cases means that the virus is spreading and could have a greater impact on the world economy. Reports indicate that little is on offer from India. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. Losses in both countries would affect the White Sugar market in London more than New York. Reports of improving weather in Brazil imply good crops there. Farmers have been selling to mills but the harvest is now almost over so the supplies will start to tail off. Brazil mills continue to favor ethanol in the production mix, but current higher prices for Sugar make it economic to open more processing to Sugar instead of ethanol at this time.
Overnight News: Brazil will get scattered showers. Temperatures should be near to below normal through Thursday, then near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1470, 1450, and 1430 May, and resistance is at 1520, 1530, and 1560 May. Trends in London are mixed. Support is at 410.00, 404.00, and 396.00 May, and resistance is at 424.00, 425.00, and 435.00 May.
General Comments: New York and London closed lower as the fears of the spread of the Coronavirus took center stage. It has now spread to South Korea, Italy, and Iran. The reports of new cases inside of China continues to decline. The spread of the virus to other countries created new fears of trouble for the world economy. Harvest is now almost over for the main crop in West Africa and the results so far are very good. 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. Ivory Coast arrivals are strong and are above year ago levels. The weather in Ivory Coast is good. The weather is too dry in Ghana and Nigeria and there are fears that the mid crop is not developing well at this time.
Overnight News: Mostly dry conditions are forecast for West Africa. Temperatures will be above 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 3.624 million bags. ICE said that 0 notices were posted for delivery against March futures and that total deliveries for the month are now 55 contracts.
Chart Trends: Trends in New York are down with objectives of 2720 and 2600 May. Support is at 2740, 2700, and 2670 May, with resistance at 2830, 2890, and 2920 May. Trends in London are mixed. Support is at 1990, 1940, and 1930 May, with resistance at 2030, 2070, and 3000 May.