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Morning Softs. 08/15/17


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COTTON
General Comments: Cotton was lower as the market reacted to good weather forecasts for the crop amid already very high production projections from USDA. Current forecasts call for some rains in Texas to boost crop prospects there. Conditions showed mixed trends in the USDA reports last night as some areas got better and some deteriorated further. The temperatures are more moderate in Texas and there have been some showers. The growing weather in the US Delta and Southeast is generally good as rains have been seen in many growing areas. Bolls are forming and starting to open in many areas. Some harvest has been reported in southern Texas and results have been very good. Monsoon rains are reported as very uneven in India and Pakistan and some flooding has been reported in the Gujarat of India. Some central areas and eastern areas have missed rains. Some crops are lost due to the flooding. It has been too hot and dry in Turkey and production losses are possible.
Overnight News: The Delta and Southeast will see scattered showers much of this week. Some areas could see big rains. Temperatures should average near to below normal. Texas will see dry scattered showers today, then dry weather. Temperatures will average near to above normal. The USDA average price is now 66.32 ct/lb. ICE certified stocks are now 18,082 bales, from 19,342 bales yesterday.
Chart Trends: Trends in Cotton are down with no objectives. Support is at 6750, 6730, and 6610 December, with resistance of 6850, 6900, and 6920 December.

FCOJ
General Comments: FCOJ closed a little lower again yesterday and remains in a trading range. Right now it is at the lower end of the trading range and appears to be waiting further developments, if any, in the Atlantic hurricane season. The potential for storms increases dramatically for the next few weeks. Florida weather is very good as it is now drier after some recent rains. There are no systems in the Atlantic to cause concern about tropical storm development that could be detrimental to trees and fruit. One System is moving away from the US in the Atlantic and the other has moved through Mexico. The demand side remains weak and there are plenty of supplies in the US. Brazil has been exporting FCOJ to the US to cover the short Florida crop. Domestic production remains very low due to the greening disease and drought. Trees now are showing fruit of varying sizes and overall conditions are called good. Brazil crops remain in mostly good condition.
Overnight News: Florida should get mostly dry conditions or light showers and near to above normal temperatures. Brazil should get mostly dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 12.00, 130.00, and 128.00 September, with resistance at 139.00, 142.00, and 145.00 September.

DJ Florida FCOJ Movement And Pack – Aug 14
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 8/5/2017
Corresponding
Current Week Last
Week Season
8/5/2017 8/6/2016 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 193.49 255.45 -24.3%
Retail/Institutional 6.55 6.04 8.4%
Total 200.04 261.49 -23.5%
Pack
Bulk 0.86 1.10 -21.7%
Retail/Institutional 1.55 1.21 27.9%
Total Pack 2.41 2.31 4.3%
Reprocessed -2.41 -2.31 4.3%
Pack from Fruit (0.00) – NA
Receipts & Losses
Net Gain or Loss -0.09 -0.03 165.9%
Imports – Foreign 2.07 5.58 -62.8%
Domestic Receipts – 0.03 -100.0%
Receipts of Florida Product
from Non-Reporting Entity 0.96 0.01 7100.0%
Chilled OJ used in FCOJ – – NC
Reprocessed FCTJ – 0.07 -100.0%
Total Carry Over, Receipt & Pack
Bulk 194.88 259.90 -25.0%
Retail/Institutional 8.10 7.25 11.7%
Total 202.98 267.15 -24.0%
MOVEMENT
Bulk
Domestic 5.46 6.19 -11.7%
Exports 0.41 0.07 478.1%
Total (Bulk) 5.87 6.26 -6.2%
Retail/Institutional
Domestic 1.61 1.49 8.0%
Exports – – NC
Total (Retail/Inst) 1.61 1.49 8.0%
Total Movement 7.48 7.75 -3.5%
ENDING INVENTORY
Bulk 189.01 253.63 -25.5%
Retail/Institutional 6.49 5.76 12.6%
Ending Inventory 195.50 259.40 -24.6%
Total Same
Total Season Period Last
To Date Season
5-Aug-17 6-Aug-16 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 212.24 281.45 -24.6%
Retail/Institutional 6.78 7.81 -13.2%
Total 219.03 289.26 -24.3%
Pack
Bulk 155.07 171.63 -9.6%
Retail/Institutional 61.20 68.02 -10.0%
Total Pack 216.27 239.65 -9.8%
Reprocessed -141.81 -147.10 -3.6%
Pack from Fruit 74.46 92.55 -19.5%
Receipts & Losses
Net Gain or Loss -3.99 -2.22 79.7%
Imports – Foreign 209.46 170.96 22.5%
Domestic Receipts 6.63 12.48 -46.9%
Receipts of Florida Product 2.69 0.19 1306.9%
from Non-Reporting Entity 2.57 5.49 -53.3%
Chilled OJ used in FCOJ 2.65 3.21 -17.5%
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 445.51 496.09 -10.2%
Retail/Institutional 67.98 75.83 -10.4%
Total 513.49 571.92 -10.2%
MOVEMENT
Bulk 197.80 209.64 -5.6%
Domestic 58.70 32.82 78.9%
Exports 256.50 242.45 5.8%
Total (Bulk)
Retail/Institutional
Domestic 61.49 70.07 -12.2%
Exports – – NC
Total (Retail/Inst) 61.49 70.07 -12.2%
Total Movement 317.99 312.52 1.7%
ENDING INVENTORY
Bulk 189.01 253.63 -25.5%
Retail/Institutional 6.49 5.76 12.6%
Ending Inventory 195.50 259.40 -24.6%

COFFEE
General Comments: New York and London closed lower on follow through selling. Speculators appeared to be selling in reaction to a weaker Real and the recent IBGE estimates that showed an increase in production for the current year. Demand news remains hard to find. Ideas of smaller offers from Brazil and the rest of Latin America are still around, but these ideas now seem part of the market. The weather forecasts kept outlooks for near to above normal temperatures and mostly dry conditions in Brazil. Producers are still worried about an extended outbreak of dry weather as it is almost flowering time in Brazil. Reports of Broca worm moving into Brazil crops is bringing ideas of additional losses. The harvest in Brazil is starting to wind down. Reports indicate that the quality of the beans harvested in Brazil is not good and that many beans are small. The cash market is quiet with little interest from producers or roasters. New York is in a correction mode for now, but must hold near 135.00 September or so and then turn back higher to keep the longer term trends intact.
Overnight News: Certified stocks are lower today and are about 1.584 million bags. The ICO composite price is now 130.49 ct/lb. Brazil will get mostly dry weather. Temperatures should average near to above normal. Colombia should get scattered to isolated showers. Central America and southern Mexico should get scattered showers. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 150.00 September. Support is at 135.00, 133.00, and 131.00 September, and resistance is at 142.00, 143.00 and 145.00 September. Trends in London are mixed. Support is at 2100, 2090, and 2060 September, and resistance is at 2150, 2180, and 2200 September.

SUGAR
General Comments: Futures in London and New York were higher as big rains were forecast to invade growing areas in southern Brazil. The harvest could be interrupted and the sucrose content of the cane could be diluted. The charts show that futures remain in an overall trading range and are near the low-end of the range. Price action is weak, but it is possible that a short-term bottom has been made due to the weather. The big harvest in Brazil continues, but some of the processing will probably switch now to ethanol due to tax changes last week and relative US Dollar weakness. In fact, sources in Brazil expect the percentage of cane crushed for ethanol to change in the short-term. Production potential in Thailand seems improved for now as monsoon rains have been better than last year. It is raining in much of India now as the monsoon is active, but rains have been uneven. Some northwest areas have been flooded due to big rains. Other areas are too dry and there could be some damage to crops if more rains do not show up fairly soon. Thailand is getting rains. The rest of Southeast Asia is seeing average to above average rains so far this year.
Overnight News:
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 1310, 1300, and 1240 October, and resistance is at 1370, 1390, and 1420 October. Trends in London are down with objectives of 364.00, 344.00, and 335.00 October. Support is at 364.00, 360.00, and 357.00 October, and resistance is at 375.00, 378.00, and 381.00 October.

COCOA
General Comments: Futures closed lower on follow through selling from speculators. The market is holding in a big trading range and is now at the lower end of the range. Overall, the market is between harvests and no one seems to expect much to happen for another few weeks It is warmer and drier in Ivory Coast. The rest of West Africa is still getting showers and more moderate temperatures. Chocolate manufacturers in general have reported improved sales volumes and ideas are that the better sales can continue as chocolate and cocoa are relatively cheap. Ivory Coast is expected to have a big crop starting harvest this Fall, but it should be smaller than last year. Ghana also expects a good crop this year The offer side of their market appears to be less right now as West Africa is between crops. The growing conditions in other parts of the world are generally good. East African conditions are now called good. Brazil remains too dry. Good conditions are still seen in Southeast Asia.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see scattered showers in all areas. Temperatures should average near to above normal. Brazil will get mostly dry conditions or light showers and near to above normal temperatures. ICE certified stocks are lower today at 5.211 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 1920 and 1830 September. Support is at 1900, 19890, and 1830 September, with resistance at 1980, 2010, and 2040 September. Trends in London are down with objectives of 1480 and 420 September. Support is at 1470, 1450, and 1430 September, with resistance at 1540, 1570, and 1600 September.

DJ CMAA Spot Cocoa Bean And Price Indications – Aug 15
Ex-dock or warehouse U.S. Eastern Seaboard North of Hatteras, in U.S. dollars
per metric ton. Settling price for August 11, 2017. All pricing is considered
nominal. Source: Cocoa Merchants Association of America.
N/A denotes not available.
Type Differential/ Price
Ratio
Main Crop Ghana, Grade 1 360 2,337.00
Main Crop Ivory Coast, Grade 1 275 2,252.00
Main Crop Nigerian, Grade 1 220 2,197.00
Ecuador 120 2,097.00
Sanchez f.a.q. 190 2,167.00
PPP Natural African Type Carton Cocoa Butter 2.66 5,258.82
Cocoa Press Cake – Natural 10/12% Butterfat 0.81 1,600.00
Questions? Ask Jack Scoville today at 312-264-4322

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The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2017



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About the author


Jack Scoville is a futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar.

He offers brokerage services to an international clientele of agricultural producers, processors, exporters, and other professional traders.

Jack writes daily comments of the many products he specializes in, in three languages, English, Spanish, and Portuguese.

He has been quoted by most major wire services including Dow Jones, AP, and Reuters. His comments have also appeared in newspapers around the world and on various radio and television shows.

Jack offers a dedicated and high quality service for his clients. His industry contacts in South America, Europe, Asia, and North America provide him with a unique view of the markets. He also uses his own charting program for technical traders.

Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles. He has been a broker off the floor since then and has been with The PRICE Futures Group since it was established in 1988.

Contact Jack Scoville: (800) 769-7021 or at jscoville@pricegroup.com

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