Morning Softs Comments

COTTON
General Comments: Cotton was lower on weaker demand ideas. President Trump tweeted out tat a deal with China might not get signed until after the elections. In addition, he threatened France, Brazil, and Argentina with tariffs of one kind or another that will be designed to hurt those economies. The market has not been able to move a lot in terms of price for the last month as the harvest has been ongoing amid some stressful conditions. Last week featured very cold temperatures and some worry about quality but not enough to affect prices much. The harvest will start to wind down over the next couple of weeks and certified inventories have been steadily growing but will soon start to level off. The market could hold to a sideways to weaker pattern until the tail end of the harvest.
Overnight News: The Delta should see mostly dry weather except for some light to moderate rain on Friday and near to above normal temperatures. The Southeast should get mostly dry conditions until some light to moderate rain returns on Friday. Texas will have mostly dry conditions. Temperatures will be mostly above normal. The USDA average price is now 59.41 ct/lb. ICE said that certified stocks are now 66,048 ba1es, from 85,257 bales yesterday. ICE said that 25 notices were posted against December contracts and that the total deliveries for the month are now 793 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 6370, 6270, and 6210 March, with resistance of 6540, 6600, and 6610 March.

FCOJ
General Comments: FCOJ was higher in correction trading. Futures could not really penetrate resistance areas on the daily charts so selling might return today. Overall chart patterns suggest that the trends are starting to turn down again. Good growing conditions and increased oranges production estimates by USDA this season have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no severe storms so far this year. Many areas have been dry lately and irrigation is being used. Crop yields and quality should be high for Florida this year. Inventories of FCOJ in the state are high and are more than 35% above last year.
Overnight News: Florida should get mostly dry weather. Temperatures will average near to below normal early in the period, then will trend lower.. Brazil should get mostly dry weather and mixed temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 93.00 and 81.00 January. Support is at 96.00, 95.00, and 92.00 January, with resistance at 101.00, 103.00, and 104.00 January.

COFFEE
General Comments: Futures were higher in New York and a little higher in London. It remains a demand led market as there is not much supply available in Brazil or Central America for the demand. The lack of offer supported the market. Rains were reported in Brazil Coffee areas to help ideas of big production in the coming year. The Brazilian crop is developing but some exporters say they are out of previous crop supplies to sell. It is dry in other parts of Latin America as well. Central America has had less than normal rains, especially in Honduras where a large part of the deliverable stocks come from. Peru is also too dry right now. The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low to provide profits. Vietnam exports remain behind a year ago, but the market anticipates bigger offers in the short term. Reports from Brazil indicate that flowering is off to a very good start. Overall the Coffee areas remain in a rain deficit but have had some timely rains to start the flowering. Vietnam crops are thought to be big despite some uneven growing conditions this year.
Overnight News: ICE certified stocks are lower today at 2.056 million bags. The ICO daily average price is now 114.48 ct/lb. Brazil will get scattered showers on Thursday and temperatures on both sides of normal. Vietnam will see scattered showers in all areas, but trends are a little drier now. ICE said that 0 contracts were delivered against December NY Coffee and that total deliveries for the month are now 228 contracts.
Chart Trends: Trends in New York are mixed. Support is at 119.00, 116.00, and 114.00 December, and resistance is at 125.00, 127.00 and 130.00 December. Trends in London are mixed. Support is at 1370, 1350, and 1340 January, and resistance is at 1410, 1430, and 1440 January.

DJ Coffee Consumption Will Overtake Output in 2019-20 -ICO
By Joe Wallace
Coffee consumption will overtake production this season amid adverse weather for farmers in Central America and Asia, the International Coffee Organization said Wednesday.
The ICO said production in these two regions would fail to offset a cyclical decline in the size of Brazil’s crop, tipping the global coffee market into a deficit of 502,000 60-kilogram bags.
This could push prices higher after those for arabica already recovered 22% in the fourth quarter, the intergovernmental organization added.
Worldwide coffee exports fell to 8.91 million bags in October, down 13% from September and their lowest monthly level since September 2017.
Shipments of robusta encountered the biggest decline, falling 22% to 2.82 million bags as farmers in Vietnam delayed sales of beans due to low domestic coffee prices.

SUGAR
General Comments: Both markets closed higher despite on bullish demand ideas. Ideas of less Crude Oil and products available to the market meant more demand for ethanol and maybe at higher prices. Overall charts trends are trying to turn up for the medium term. Demand from Brazil mills could be mostly for Ethanol and that would hurt world Sugar production. There are tight supplies in other countries. Reports indicate that little is on offer from India. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. There is still more than enough Sugar for any demand and that India will have to sell sooner or later. Reports of improving weather in Brazil imply good crops there. The Real has been trading near recent lows against the US Dollar and this should encourage export sales from Brazil as well.
Overnight News: Brazil will get scattered showers on Thursday. Temperatures should be on both sides of normal.
Chart Trends: Trends in New York are mixed. Support is at 1260, 1240, and 1230 March, and resistance is at 1300, 1320, and 1330 March. Trends in London are mixed to up with objectives of 348.00 and 355.00 March. Support is at 340.00, 335.00, and 331.00 March, and resistance is at 346.00, 348.00, and 351.00 March.

DJ Looming Sugar Shortfall Boosts Prices — Market Talk
1627 GMT – Sugar prices rise, boosted by a looming shortfall in the sweetener. White-sugar and refined sugar futures are both 0.6% higher, at $344.50 a metric ton and 13 U.S. cents a pound respectively. In its monthly report, the International Sugar Organization said the sugar market will fall into a deficit of 6.115 million metric tons in the 2019-20 season. Sugar farmers are struggling in several major producers. In the European Union, “early expectations that a sugar yield recovery may more than offset the 5% drop in beet areas have not been supported,” the ISO says. It notes that the Indian Sugar Mills Association cut its forecast for output this year by 5% in November to 26.85 million tons. (joe.wallace@wsj.com)

COCOA
General Comments: Futures closed lower on ideas of increasing supplies available to the market. Harvest continues in West Africa and reports are that good volumes and quality are expected. Ideas are that demand is currently very strong as users try to get the best beans and try to stay ahead of the minimum price scheme institute by Ivory Coast ad Ghana.. The reports from West Africa imply that a big harvest is possible in the region. Ivory Coast arrivals are strong and are above year ago levels. The weather in Ivory Coast has improved due to reports of frequent showers. The precipitation is a little less now so there are no real concerns about disease. Ideas are that the next crop will be very good.
Overnight News: Scattered showers are expected in West Africa. Temperatures will be near to above normal. Malaysia and Indonesia should see showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 2.959 million bags. ICE said that 0 contracts were posted for delivery against December contracts and that total deliveries for the month are now 248 contracts.
Chart Trends: Trends in New York are down with objectives of 2530 and 2460 March. Support is at 2510, 2480, and 2440 March, with resistance at 2590, 2610, and 2670 March. Trends in London are down with objectives of 1850 March. Support is at 1840, 1820, and 1800 March, with resistance at 1910, 1930, and 1950 March.

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