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 lower again yesterday on follow through selling tied to strength in the US Dollar again. Price trends turned down last week when futures broke through some short term support areas and the selling has continued so far this week. Traders are worried about a global recession and demand in that recession. The late season weather in the Great Plains was better and the crop showed improvement but production is still very short. An increase in export volumes was noted by USDA because of the increased production, but the supply increase was bigger than the demand increase and ending stocks estimates increased. The harvest is coming, and the market is preparing for it with sideways to lower prices. The trade is still worried about demand moving forward due to recession fears and Chinese lockdowns but is also worried about total US production potential. It is possible that the continued Chinese lockdowns will continue to hurt demand for imported Cotton for that country and that a weaker economy in the west will hurt demand from the rest of the world.
Overnight News: The Delta and Southeast will get mostly dry conditions and above normal temperatures. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 93.97 ct/lb. ICE said that certified stocks are now 4,552 bales, from 4,552 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 9670 December. Support is at 93.00, 91.60, and 88.80 December, with resistance of 102.00, 106.00 and 108.40 December.
General Comments: FCOJ was higher again yesterday and trends are up on the daily charts. The weather remains generally good for production around the world for the next crop. Brazil has some rain and conditions are rated good. It has been dry recently in Sao Paulo but apparently not dry enough to affect the trees or fruit all that much. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures. It has been dry in Brazil but showers are expected to develop over the next couple of weeks. Mexican areas are showing mixed trends, with dry weather in some northern areas but better weather to the south. FCOJ inventories are now 40.8% less than a year ago.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 184.00 and 194.00 November. Support is at 174.00, 169.00, and 167.00 November, with resistance at 182.00, 184.00, and 192.00 November.
General Comments: New York and London closed higher in response to lower production estimates from CONAB in Brazil. It estimated total Coffee production this year at 50.38 million bags, from 47.72 million last year and 53.43 million estimated earlier in the year. Arabica production is estimated at 32.41 million bags and Robusta production is estimated at 17.97 million bags. Small offers in Arabica are reported from Brazil and the weather forecasts have turned a little drier, but showers are still in the forecast. There is a threat for a third year of La Nina which could negatively affect Coffee production again next year. Robusta shipments were down sharply and overall, Coffee exports were less. There is concern that Brazil will produce less Coffee this year due to very dry conditions after early rains led to premature flowering. The forecasts call for some light and isolated to scattered showers in the region for this weekend. Vietnam has also been dry and wire reports from there indicate that production losses are likely. Demand for Coffee overall is thought to be less, but the cash market remains strong. There is less Coffee on offer from origin, with Brazil offering less and Central America and Vietnam offering less as well. The weather in Brazil is good for Coffee production and any harvest activities. Temperatures are mostly above normal in Brazil and conditions are mostly dry. The dry weather is raising some concerns about the next crop potential, but it is normally dry at this time of year.
Overnight News: ICE certified stocks are lower today at 0.515 million bags. GCA stocks are now 6.450 million bags, from 6.223 million last month. The ICO daily average price is now 201.77 ct/lb. Brazil will get scattered showers with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 3 contracts were posted for delivery against September futures and that total deliveries for the month are now 1,523 contracts.
Chart Trends: Trends in New York are mixed. Support is at 22.00, 216.00, and 211.00 December, and resistance is at 231.00, 234.00 and 237.00 December. Trends in London are mixed. Support is at 2200, 2170, and 2150 November, and resistance is at 2260, 2300, and 2350 November.
General Comments: New York and London closed higher yesterday in recovery trading. New York daily charts show a return to the recent trading range yesterday while London charts show that futures held support and might have bottomed out. The New York market is worried about ethanol demand in Brazil will force mills down there to continue to produce more Sugar for export, but that news now appears to be part of the market. The Brazilian president has lowered the fuel taxes in Brazil and this is squeezing the profit margins of the mills. The mills could produce much more Sugar over time due to the tax changes. The London market had been looking for increased White Sugar supplies from origin and now is more worried about demand after recent price strength. Indian exporters are waiting for the government to announce its export policy for the coming year and are not selling White Sugar. The government is expected to announce a first tranche of 5.0 million tons for the export market in the next few days.
Overnight News: Brazil will get scattered showers. Temperatures should average near to above normal. India will get scattered showers in eastern areas and near to below normal temperatures.
Chart Trends: Trends in New York are mixed to down with objectives of 1710, 1690, and 1610 March. Support is at 1720, 1690, and 1660 March and resistance is at 1790, 1830, and 1850 March. Trends in London are down with objectives of 410.00 and 485.00 December. Support is at 520.00, 517.00, and 500.00 December and resistance is at 534.00, 543.00, and 548.00 December.
General Comments: New York was lower and London was mixed yesterday in consolidation trading. There does not seem to be anything going on to push prices in one direction or the other. Ideas of big production and uncertain demand are still around but reports from Africa indicate that demand has improved lately. Trends are mixed in New York. Reports indicate that buyers of Cocoa have enough coverage for now and can afford to wait for lower prices to develop. Supplies of Cocoa are as large as they will be now for the rest of the marketing year. Reports of scattered showers along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. Ideas are still that good production is expected from West Africa for the year. The weather is good for harvest activities in West Africa but the harvest should be winding down now. The weather is good in Southeast Asia.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near normal temperatures. ICE certified stocks are not available today at 5.649 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2320, 2300, and 2280 December, with resistance at 2400, 2430, and 2450 December. Trends in London are mixed to up with objectives of 1880 and 1920 December. Support is at 1860, 1840, and 1820 December, with resistance at 1900, 1920, and 1970 December.