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 mixed to a little higher in recovery trading but macro fundamentals are showing mixed trends. Most important to Cotton is that US stock indexes are in a recovery mode for now. The Coronavirus has closed malls across America and stores are not selling clothes. Clothes for the US market made in Asia are not being ordered. The weakness in Petroleum futures comes from the moves by Saudi Arabia to ramp up production just at the time when the world economy is slowing down. The threat of a world-wide recession is very real. USDA will issue its next round of supply and demand reports on Thursday. Traders expect USDA to show US production near 19.74 million bales and exports near 6.01 million bales. Ending stocks are estimated at 5.56 million bales. World production is estimated at 121.29 million bales, with consumption estimated at 113.70 million bales and ending stocks at 87.72 million bales.
Overnight News: The Delta and Southeast will get isolated to scattered showers off and on this week. Temperatures should be mostly above normal this week and below normal this weekend. Texas will have a few showers on Friday and Saturday. Temperatures will average mostly above normal this week and mostly below normal this weekend. The USDA average price is now 48.66 ct/lb. ICE said that certified stocks are now 78,255 bales, from 27,255 bales yesterday. CONAB estimated Brazil Cotton exports at 2.0 million tons, unchanged from last month. USDA said that net weekly Upland Cotton export sales were -5,200 bales this year and 107,600 bales next year. Net Pima sales were 800 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are up with objectives of 5400 and 5700 May. Support is at 5110, 4840, and 4780 May, with resistance of 5420, 5490 and 5670 May.
General Comments: FCOJ was lower and is now trading close to contract lows. Trends remain down on the daily charts and the market has given back just about all of the gains it enjoyed when the Coronavirus first hit the US. Industry sources suggest that demand had improved as consumers returned to FCOJ due to the Coronavirus. Many stockpiled juice, but much of the stockpiling could now be completed. Grocery stores in many areas needed to restock, but this is now mostly done. The early and mid crop harvest is about over and the Valencia harvest is increasing. 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. Reports indicate that new crop fruit is progressing well.
Overnight News: Florida should get scattered showers starting on Thursday. Temperatures will average above normal. Brazil should get isolated showers and near to above normal temperatures.
Chart Trends: Trends in FCOJ are down with no objectives. Support is at 102.00, 100.00, and 96.00 May, with resistance at 108.00, 111.00, and 115.00 May.
General Comments: Futures were slightly lower in both markets in lifeless trading. The chart trends are mixed in New York and in London due to big production ideas, but producers are having trouble getting workers to pick and the exporters are having trouble getting workers for processing and loading. Brazil is currently reporting good conditions with a few showers. 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.
Overnight News: ICE certified stocks are lower today at 1.946 million bags. The ICO daily average price is now 111.71 ct/lb. Brazil will get scattered showers, mostly in Minas Gerais, with near normal temperatures. Vietnam will see mostly dry conditions in the south and so light to moderate showers in the north.
Chart Trends: Trends in New York are mixed. Support is at 112.00, 110.00, and 107.00 May, and resistance is at 121.00, 124.00 and 127.00 May. Trends in London are mixed. Support is at 1180, 1160, and 1150 May, and resistance is at 1210, 1220, and 1230 May.
General Comments: New York closed a little lower in range trading. London was higher as May is about to expire. The next harvest is about to start in Brazil. The recently weaker petroleum futures make higher priced ethanol that much more expensive to blend and cuts demand. Prices in petroleum futures remained generally firm yesterday but still have a long way to go before Ethanol processing becomes profitable again. That makes more Sugarcane available for processing into Sugar. The Brazil mills are trying to cover the lack of White Sugar in the market and the price action suggests that they are succeeding. 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.
Overnight News: Brazil will get scattered showers, mostly in Minas Gerais. Temperatures should average near normal.
Chart Trends: Trends in New York are mixed. Support is at 1010, 970, and 940 May, and resistance is at 1080, 1130, and 1170 May. Trends in London are mixed. Support is at 329.00, 326.00, and 323.00 May, and resistance is at 352.00, 361.00, and 364.00 May.
General Comments: New York and London closed lower in consolidation trading. Chart trends are still up in both markets. Harvest is now over for the main crop in West Africa and the results so far are very good. Ideas are that demand is less than before due to the Coronavirus problems in Europe. The reports from West Africa imply that a big harvest in the region. 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: Isolated to scattered showers 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 3.961 million bags.
Chart Trends: Trends in New York are up with objectives of 2420 and 2510 May. Support is at 2360, 2300, and 2250 May, with resistance at 2470, 2530, and 2560 May. Trends in London are mixed to up with no objectives. Support is at 1810, 1800, and 1780 May, with resistance at 1900, 1920, and 1930 May.