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

COTTON        

General Comments:  Cotton futures closed lower after trading higher early in the day as USDA said that export sales were very strong and well above the previous four week average.  The  USDA reports from Wednesday showed less production but also a little less demand.  Demand was cut on the export side but increased for the domestic side.  Ending stocks were trimmed to 320,000 bales from 340,000 bales in the previous estimate.  It’s been a demand market and prices have been sideways waiting for demand to catch up to the price.  Ideas are that demand remains strong for US Cotton even with the weaker export sales reports over the last couple of weeks.  Analysts say the Asian demand is still very strong and likely hold at high levels for the future.  US consumer demand has been very strong as well despite higher prices and inflation.  Good US production is expected for next year as planted area is expected to increase due to high Cotton prices and the expense of planting Corn.  Chart trends are up in this market.

Overnight News:  The Delta and Southeast will get scattered showers this weekend and near to below normal temperatures.  Texas will have mostly dry conditions and near to above normal temperatures.  The USDA average price is now 113.52 ct/lb.  ICE said that certified stocks are now 617 bales, from 617 bales yesterday.

Chart Trends:  Trends in Cotton are up with objectives of 12010 March.  Support is at 11640, 11450, and 11270 March, with resistance of 11960, 12080 and 12200 March.

DJ On-Call Cotton – Jan 13 

   As of Jan 7. On-call positions represent spot cotton sold to or

purchased from a merchant, based on New York cotton futures contracts

of 500-pound bales. Prices are not yet fixed against these contracts.

Source: CFTC

   *-denotes changes from the previous week are based on revised data from

last week.

              Call  Previous   Change       Call  Previous  Change

             Sales                     Purchases

Dec 21            0         0        0          0         0       0

Mar 22       49,987    50,916     -929      9,018     9,427    -409

May 22       22,410    22,280      130      3,054     2,668     386

Jul 22       49,891    48,367    1,524      5,705     5,434     271

Oct 22            0         0        0          0         0       0

Dec 22       14,531    13,937      594     14,016    14,275    -259

Mar 23        3,390     3,024      366        758       782     -24

May 23        1,338     1,250       88          0         0       0

Jul 23        1,450     1,302      148         44        44       0

Dec 23        2,281     2,374      -93      5,656     5,324     332

Jul 24            0         0        0        220       220       0

Dec 24            0         0        0        220       220       0

Total       145,278   143,450    1,828     38,691    38,394     297

              Open      Open   Change

               Int       Int

Dec 21            0         0        0

Mar 22      117,366   120,216   -2,850

May 22       55,845    52,927    2,918

Jul 22       30,170    26,865    3,305

Oct 22           44        44        0

Dec 22       34,773    33,200    1,573

Mar 23        2,792     2,341      451

May 23          374       371        3

Jul 23          373       224      149

Dec 23        4,206     3,708      498

Jul 24            0         0        0

Dec 24            0         0        0

Total       245,943   239,896    6,047

FCOJ 

General Comments:  FCOJ was higher and made new contract highs and trends are still up on the daily charts on the reduced Florida Oranges production estimates.  USDA cut its Oranges production estimate for Florida, but increased production when compared to the last report for the whole of the US.  Production overall remains less on a year to year basis.  The freeze season is coming to Florida but the weather remains generally good for production in Florida and around the world.  Brazil has some rain and conditions are rated very good.  Brazil production was down last year due to dry conditions at flowering time and then a freeze just before harvest.  Weather conditions in Florida are rated mostly good for the crops with a couple of showers and warm temperatures.  Mexican crop conditions in central and southern areas are called good with rains. Northern and western Mexico is rated in good condition.

Overnight News:  Florida should get isolated showers.  Temperatures will average near normal.   Brazil should get scattered showers and near to above normal temperatures.  ICE said that 0 notices were posted for FCOJ for January delivery and that total deliveries for the month are now 0 contracts.

Chart Trends:  Trends in FCOJ are up with no objectives.  Support is at 146.00, 143.00, and 140.00 March, with resistance at 155.00, 158.00, and 161.00 March.

COFFEE   

General Comments:  New York and London closed lower yesterday as the logistical and production problems in Brazil and Vietnam are still around.  Producers and speculators seemed to be the best sellers.  Trends in London have turned down but trends in New York are still sideways or up.  The dry weather and then the freeze in Brazil have created a lot of problems for the trees to form cherries this year.  Big rains more recently in some Brazil growing areas have hurt cherry formation as well.  Containers are not available in Vietnam or in Brazil to ship the Coffee.  Brazil farmers have sold about 82% of the Coffee this year, from 74% average.  Vietnam producers are also selling and some of the Robusta is going to the exchange in London as differentials have weakened.  The harvest in Vietnam is now about 90% complete.  Vietnam is getting scattered showers on the coast but dry conditions inland.  The rest of Southeast Asia should get scattered showers in the islands and mostly dry conditions on the mainland.  Production conditions for the next crop in Colombia are not good.

Overnight News:  ICE certified stocks are lower today at 1.412 million bags.  The ICO daily average price is now 208.76 ct/lb.  Brazil will get isolated showers with near to above normal temperatures.  Central America will get mostly dry conditions.  Vietnam will see scattered showers near the coast nd mostly dry conditions inland.

Chart Trends:  Trends in New York are mixed to up with objectives of 247.00 and 256.00 March.  Support is at 236.00, 232.00, and 227.00 March, and resistance is at 245.00, 248.00 and 252.00 March.  Trends in London are mixed to down with objectives of 2240 March.   Support is at 2210, 2190, and 2160 March, and resistance is at 2270, 2300, and 2320 March[JS1] .

SUGAR                 

General Comments:  New York and London were lower yesterday on what appeared to be speculative selling tied to some long liquidation.  Ideas are that stronger Crude Oil prices imply stronger ethanol prices for more ethanol production and less Sugar production in Brazil.  There have been reports of improved growing conditions for the crops in central-south areas of Brazil.  Sugar crops in these areas got a lot of help from the recent rains but many of these areas are drier again.  More showers are in the forecast for central south areas this weekend and into next week and crops should benefit from the return of moisture to the region.  Ideas are that the supplies are available from India and Thailand as harvests there are off to a good start but it will take a stronger price to get them into the market.  Trends are turning mixed or up in the market as futures are forming a bottom.

Overnight News:  Brazil will get scattered showers.  Temperatures should average near normal.

Chart Trends: Trends in New York are mixed.  Support is at 1760, 1750, and 1720 March and resistance is at 1850, 1880, and 1910 March.  Trends in London are mixed to up with objectives of 506.00, 522.00, nd 532.00 March.  Support is at 495.00, 492.00, and 487.00 March and resistance is at 506.00, 509.00, and 513.00 March.

COCOA                                                                                   

General Comments:  New York and London were both higher again on ideas of better demand as the weather is generally good for West Africa and Southeast Asia.  Trends are turning up again in both markets.  Ideas are that demand will only improve slightly if at all and production in West Africa appears to be good this year.  Both Ivory Coast and Ghana are reporting improved weather as it is now mostly sunny with some scattered showers around.  Some farmers want more rain for the best Spring harvest results.  Ivory Coast said that it has ground 52,000 tons of Cocoa in December, up 2% from last year.  Year to date arrivals in Ivory Coast are now 6.4% below last year.  Ghana arrivals are down 53.9% from last year.  Fourth quarter grind data from Europe and North America, will be released next week.

Overnight News:  Mostly dry conditions are forecast for West Africa.  Temperatures will be near to above normal.  Malaysia and Indonesia should see showers.  Temperatures should average above normal.  Brazil will get scattered showers and near normal temperatures.  ICE certified stocks are lower today at 4.6092 million bags.

Chart Trends:  Trends in New York are mixed to up with objectives of 2610, 2620, and 2680 March.  Support is at 2550, 2510, and 2480 March, with resistance at 2630, 2650, and 2670 March.  Trends in London are mixed to up with objectives of 1740 and 1780 March.  Support is at 1700, 1690, and 1680 March, with resistance at 1740, 1770, and 1780 March.

DJ Asian Cocoa Grindings Rose 6.3% in Fourth Quarter 

   By Ronnie Harui

  Asian cocoa-bean grindings rose 6.3% in the fourth quarter of 2021 from a year earlier, according to figures released Friday by the Cocoa Association of Asia & Enterprise Singapore.

  Cocoa grindings totaled 231,309 metric tons in the October-to-December quarter compared with 217,546 tons in the same period in 2020, the figures showed. On a quarterly basis, cocoa grindings in the fourth quarter climbed 9.6% from the prior quarter.

  “An improvement in the Covid situation across the region helped the region bounce back strongly from the previous quarter and ward off other situational challenges that surfaced during the quarter,” the association said.

  For 2021, cocoa grindings stood at 877,002 metric tons, up 5.6% from 830,241 tons in 2020, the figures showed.

  Cocoa grindings–the volume of cocoa beans processed into the butters and powders used to make chocolate–are often taken as a proxy for cocoa demand.

  Cocoa Association of Asia is a trade association that groups the major companies involved in the cocoa bean trade and processing, in warehousing and related logistical activities in Asia.

Questions? Ask Jack Scoville today at 312-264-4322