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 closed higher on the reduced crop ratings released Monday night by USDA. Signs of an deteriorating economy in the US and around the world during the Coronavirus epidemic hurt prices. There is concern that China will stop fulfilling its obligations in the Phase One trade deal due to ramped up US rhetoric on the Chinese response to the Coronavirus epidemic and now the unrest in Hong Kong. The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks. The retail demand has been slow to develop as many consumers got hurt economically due to stay at home orders during the height of the pandemic and have little disposable funds to spend on clothes. Demand will slowly improve but the industry should have plenty of supplies to work with in the short term. The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth. However, it has been very hot and dry in West Texas and crops there are suffering.
Overnight News: The Delta will get mostly dry conditions and Southeast will get showers in eastern areas, otherwise dry conditions. Temperatures should be mostly above normal in the Delta and near to above normal in the Southeast. Texas will have dry conditions or isolated showers. Temperatures will average near to above normal. The USDA average price is now 54.47 ct/lb. ICE said that certified stocks are now 31,505 bales, from 31,799 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 5870, 5730, and 5710 July, with resistance of 6060, 6110 and 6210 July.
General Comments: FCOJ was lower on follow through speculative selling. The selling came for chart based reasons as futures were unable to take out recent highs even though USDA released reduced production estimates for US production. Florida production is now estimated at less than 68 million boxes. Support is coming from the continued effects from the Coronavirus that are keeping people at home and drinking Orange Juice. Demand from grocery stores has remained strong in response to the increased consumer demand. Inventories in cold storage remain solid so there will be FCOJ to meet the demand. However, inventories are leveling off or dropping from year ago levels. There is increasing concern about the food service demand not improving even with the partial opening of the states. The weather in Florida is currently good for the crops. Southern areas are cooler and have seen more frequent showers. The tree condition is called good. The Valencia harvest is in full swing. Brazil has been dry and irrigation has been used.
Overnight News: Florida should get periods of showers for much of the week. Temperatures will average near to below normal. Brazil should get dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are down with objectives of 115.00 and 105.00 July. Support is at 115.00, 112.00, and 111.00 July, with resistance at 120.00, 125.00, and 129.00 July.
General Comments: Futures were a little lower in New York and lower in London. The Brazil harvest is underway and starting to expand. The Brazilian Real was weaker. Ideas are that production will be very strong this year as it is the on year for the trees and production. The strong production ideas are coming despite hot and dry weather seen in the country at flowering time. Vietnam also had hot and dry weather at flowering time and production ideas there are less than original expectations of a bumper crop. The logistics of moving Coffee from Central and South America remain difficult. Shipping logistics have improved, but many are still having trouble getting the Coffee to ports to move to consumer nations. Indonesian producers are more active sellers, but Vietnamese producers are mostly quiet.
Overnight News: ICE certified stocks are higher today at 1.670 million bags. The ICO daily average price is now 97.18 ct/lb. Brazil will get some isolated showers with above normal temperatures. Vietnam will see light to moderate showers.
Chart Trends: Trends in New York are mixed to down with objectives of 91.00 and 86.00 July. Support is at 92.00, 89.00, and 86.00 July, and resistance is at 95.00, 98.00 and 100.00 July. Trends in London are mixed. Support is at 1150, 1130, and 1080 July, and resistance is at 1180, 1200, and 1230 July.
General Comments: New York was mixed and London closed higher on rallies in world petroleum markets. There were reports of less consumption in the last quarter and less consumption is feared moving forward. Brazil mills are currently producing about 48% Sugar from the cane crush, from about 33% a year ago. The overall crush rate is below year ago levels. The mix could swing back more to ethanol with higher world petroleum and ethanol prices. Reports indicate that little is on offer from India in part due to logistical and harvest problems caused by the Coronavirus. India is thought to have a very big crop of Sugarcane this year but getting it into Sugar and into export position has become extremely difficult. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. There are reduced flows in rivers from China as China builds dams for power and flooding control.
Overnight News: Brazil will get a dry week. Temperatures should average above normal.
Chart Trends: Trends in New York are mixed. Support is at 1170, 1130, and 1120 October, and resistance is at 1240, 1260, and 1290 October. Trends in London are mixed. Support is at 384.00, 374.00, and 370.00 August, and resistance is at 398.00, 400.00, and 405.00 August.
General Comments: New York closed narrowly mixed and London closed slightly higher. It was mostly a consolidation trade. There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US. Harvest is now over for the main crop in West Africa and the results so far are very good. The reports from West Africa imply that a big harvest in the region. However, the Midcrop could be less due to dry weather earlier in the season. Arrivals are on a pace about the same as last year. Ideas are that Southeast Asia also has good crops.
Overnight News: Isolated to scattered showers are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see showers. Temperatures should average above normal. Brazil will get mostly dry conditions and above normal temperatures. ICE certified stocks are lower today at 4.216 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2310, 2090, and 2040 July. Support is at 2310, 2280, and 2260 July, with resistance at 2400, 2420, and 2450 July. Trends in London are mixed. Support is at 1830, 1810, and 1790 July, with resistance at 1890, 1910, and 1940 July.