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 yesterday in correction trading.  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 will get mostly dry conditions and Southeast will get scattered showers and both areas will get near to below normal temperatures.  Texas will have mostly dry conditions and below normal temperatures.  The USDA average price is now 119.37 ct/lb.  ICE said that certified stocks are now 617 bales, from 617 bales yesterday.  USDA said that net Upland Cotton export sales were 273,000 bales this year and 138,200 bales next year.  Net Pima sales were 3,800 bales this year and 0 bales next year.

Chart Trends:  Trends in Cotton are up with no objectives.  Support is at 12100, 11840, and 11650 March, with resistance of 12460, 12560 and 12680 March.

FCOJ 

General Comments:  FCOJ was higher on what appeared to be some speculative buying primarily based on inflation concerns.  The trends are still up on the daily charts on the reduced Florida Oranges production estimates seen last week.  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 has arrived in 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 to above 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 objectives of 166.00 and 176.00 March.  Support is at 152.00, 150.00, and 146.00 March, with resistance at 160.00, 163.00, and 166.00 March.

COFFEE   

General Comments:  New York and London closed a little lower as the logistical and production problems in Brazil are still around but are slowly being resolved.  Vietnamese producers have been selling so differentials have gone down in that market and it now pays to send Coffee to London and the rest of Europe.  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 1.374 million bags.  The ICO daily average price is now 208.33 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 and 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 235.00, 232.00, and 227.00 March, and resistance is at 245.00, 248.00 and 252.00 March.  Trends in London are down with no objectives.   Support is at 2180, 2160, and 2140 March, and resistance is at 2250, 2270, and 2300 March[JS1] .

DJ Brazil 2022 Coffee Crop Future Sales Advance — Market Talk 

     1643 ET – Brazilian coffee farmers have sold a larger proportion than normal of this year’s coffee crop, encouraged by high prices on global markets, according to agricultural consultancy Safras & Mercado. Growers had sold 32% of the forecast 2022 crop as of Jan. 14, compared with 19% on the same date last year, Safras said. The arabica variety is already 35% sold, compared with 26% last year. Concerns about the size of the crop this year is encouraging early buying, according to the consultancy. A drought and several frosts last year hurt the development of coffee plants in many areas, and because of the plants’ two-year growth cycle, output this year will be smaller as a result. (jeffrey.lewis@wsj.com)

SUGAR                 

General Comments:  New York and London were lower yesterday in correction trading as the market tries to ensure that there will be enough White Sugar production and imports from India and Thailand.  Ideas are that stronger Crude Oil prices imply stronger ethanol prices for more ethanol production and less Sugar production in Brazil and those ideas help keep Sugar prices supported.  Crude Oil closed higher again yesterday.  There have been reports of improved growing conditions for the crops in central-south areas of Brazil.  Showers were reported in central south areas last weekend and will continue into much of this 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 still up in the market as futures have formed a bottom.

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

Chart Trends: Trends in New York are up with objectives of 1925, 2010, and 2040 March.  Support is at 1870, 1850, and 1840 March and resistance is at 1930, 1960, and 1970 March.  Trends in London are up with objectives of 522.00 and 532.00 March.  Support is at 505.00, 500.00, and 495.00 March and resistance is at 516.00, 520.00, and 523.00 March.

COCOA                                                                                   

General Comments:  New York closed mixed to lower and London was a little lower yesterday in range trading and on ideas of better demand as the weather is generally good for West Africa and Southeast Asia.  There were some reports of Ivory Coast hedging in the market yesterday an today.  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.  The European grind was up 6.3% from a year ago and was considered very strong.

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 higher today at 4.564 million bags.

Chart Trends:  Trends in New York are up with objectives of 2680 March.  Support is at 2610, 2560, and 2530 March, with resistance at 2700, 2730, and 2770 March.  Trends in London are up with objectives of 1780 March.  Support is at 1730, 1700, and 1690 March, with resistance at 1790, 1810, and 1830 March.

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