MORNING SOFTS COMMENTS

MORNING SOFTS COMMENTS

                                       

 

Jack Scoville

 

Friday, February 14, 2020

 

 

 

Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

 

JSL, SA de CV

San Salvador, El Salvador (503) 2260-7806jslsadecv@comcast.net

 

JSL, SA

jslsa@comcast.net

 

 

 

 

 

COTTON           

General Comments:  Cotton was lower yesterday.  Increased cases of corona virus out break in China caused the selling interest.  The market doubts that China will take that much Cotton from the US even though they have in fact been buying.  Traders also turned bearish on the coronavirus that could hamper two way trade with the US and just about everyone else.  China has been buying Cotton from the US and Brazil as it needs higher quality Cotton to blend with its domestic production.  The Coronavirus has the chance to hurt trade in Cotton between the two countries, but signs indicate that the virus is now affecting less new people on a daily basis, so there are new hopes of demand.  Chinese buyers might need less Cotton now as no one inside the country is shopping for anything new.  People in many big cities in China are afraid to go outside due to fears of contracting the virus, but factories are open and people are working again.

Overnight News:  The Delta and Southeast should see mostly dry conditions through the weekend and some rains next week.  Temperatures should average near to above normal after some cold weather over the next couple of days.  Texas will have mostly dry weather.  Temperatures will trend to near to above normal.  The USDA average price is now 63.32 ct/lb.  ICE said that certified stocks are now 32,152 ba1es, from 32,066 bales yesterday.

Chart Trends:  Trends in Cotton are mixed to up with objectives of 7000 and 7140 March.  Support is at 6780, 6710, and

6680 March, with resistance of 6880, 6910, and 6990 March.

 

DJ On-Call Cotton – Feb 13

As of Feb 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 19            0         0        0          0         0       0

Mar 20       18,098    19,804   -1,706     13,247    18,022  -4,775

May 20       21,091    20,724      367      7,642     3,386   4,256

Jul 20       24,132    23,623      509      4,148     3,922     226

Oct 20            0         0        0          0         0       0

Dec 20       19,346    18,615      731     19,077    18,776     301

Mar 21        6,735     6,611      124      1,038     1,007      31

May 21        3,035     3,009       26        178       178       0

Jul 21        6,052     6,053       -1        816       816       0

Dec 21        1,128     1,128        0      1,892     1,848      44

Mar 22          466       466        0         13        13       0

Dec 22            0         0        0          7         7       0

Dec 23            0         0        0          7         7       0

Total       100,083   100,033       50     48,065    47,982      83

Open      Open   Change

Int       Int

Dec 19            0         0        0

Mar 20       75,878   120,131  -44,253

May 20       83,712    71,425   12,287

Jul 20       40,413    40,000      413

Oct 20           77        52       25

Dec 20       32,470    31,514      956

Mar 21        5,578     2,623    2,955

May 21          361       284       77

Jul 21        1,070     1,008       62

Dec 21          525       509       16

Mar 22            2         2        0

Dec 22            0         0        0

Dec 23            0         0        0

Total       240,086   267,548  -27,462

 

FCOJ

General Comments:  FCOJ was higher and held the breakout levels but did not make new highs for the move.  The price action is still strong and higher futures prices are anticipated.  No real change was noted in the fundamentals of big supplies and bad demand.  There is a big crop of Oranges out there with not many outlets for consumption.  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.  Consumer demand has been lacking on the ideas of higher prices for FCOJ and on health concerns.

Overnight News:  Florida should get mostly dry conditions, but showers are possible on Friday.  Temperatures will average near to above normal.   Brazil should get scattered showers through the weekend and near to above normal temperatures.

Chart Trends:  Trends in FCOJ are mixed to up with objectives of 104.00 and 110.00 March.  Support is at 96.00, 95.00, and 92.00 March, with resistance at 100.00, 102.00, and 105.00 March.

 

DJ Florida FCOJ Movement and Pack – Feb 14

In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)

WEEK ENDING: 2/1/2020

Corresponding

Current        Week Last

Week           Season

2/1/2020         2/2/2019   % Change

CARRY OVER, RECEIPT & PACK

Carry Over

Bulk                            298.13           233.80      27.5%

Retail/Institutional              6.83             5.86      16.5%

Total                           304.96           239.66      27.2%

Pack

Bulk                              3.79             5.47     -30.8%

Retail/Institutional              0.93             1.34     -30.7%

Total Pack                        4.71             6.81     -30.8%

Reprocessed                      -2.96            -3.28      -9.9%

Pack from Fruit                   1.76             3.53     -50.2%

Receipts & Losses

Net Gain or Loss                 -0.14             0.60     -77.5%

Imports – Foreign                 3.42             4.89     -30.0%

Domestic Receipts                 1.40             0.00         NA

Receipts of Florida Product

from Non-Reporting Entit         0.00             0.00         NC

Chilled OJ used in FCOJ           0.44             0.00         NA

Reprocessed FCTJ                  0.08             0.06      28.0%

Total Carry Over, Receipt & Pack

Bulk                            304.16           241.55      25.9%

Retail/Institutional              7.76             7.20       7.8%

Total                           311.92           248.74      25.4%

MOVEMENT

Bulk

Domestic                          5.24             4.75      10.4%

Exports                           0.47             0.56     -16.1%

Total (Bulk)                      5.71             5.31       7.6%

Retail/Institutional

Domestic                          1.03             1.15     -10.5%

Exports                           0.00             0.00         NC

Total (Retail/Inst)               1.03             1.15     -10.5%

Total Movement                    6.75             6.46       4.4%

ENDING INVENTORY

Bulk                            298.45           236.23      26.3%

Retail/Institutional              6.73             6.05      11.2%

Ending Inventory                305.17           242.28      26.0%

Total Same

Total Season      Period Last

To Date           Season

1-Feb-20         2-Feb-19  % Change

CARRY OVER, RECEIPT & PACK

Carry Over

Bulk                            311.95           237.21      31.5%

Retail/Institutional              5.82             5.92      -1.6%

Total                           317.77           243.13      30.7%

Pack

Bulk                             58.82            50.09      17.4%

Retail/Institutional             22.23            21.32       4.3%

Total Pack                       81.05            71.41      13.5%

Reprocessed                     -39.73           -41.99      -5.4%

Pack from Fruit                  41.32            29.42      40.4%

Receipts & Losses

Net Gain or Loss                 -0.94            -0.88       6.5%

Imports – Foreign                32.15            77.70     -58.6%

Domestic Receipts                 7.13             1.22     486.1%

Receipts of Florida Product

from Non-Reporting Entit         0.15             0.04     323.8%

Chilled OJ used in FCOJ           9.16             0.24    3793.4%

Reprocessed FCTJ                  0.51             0.28      82.3%

Total Carry Over, Receipt & Pack

Bulk                            379.20           323.90      17.1%

Retail/Institutional             28.05            27.23       3.0%

Total                           407.25           351.14      16.0%

MOVEMENT

Bulk                             75.98            81.51      -6.8%

Domestic                          4.78             6.16     -22.5%

Exports                          80.75            87.67      -7.9%

Total (Bulk)

Retail/Institutional

Domestic                         21.32            21.18       0.7%

Exports                           0.00             0.00         NC

Total (Retail/Inst)              21.32            21.18       0.7%

Total Movement                  102.08           108.86      -6.2%

ENDING INVENTORY

Bulk                            298.45           236.23      26.3%

Retail/Institutional              6.73             6.05      11.2%

Ending Inventory                305.17           242.28      26.0%

 

COFFEE 

General Comments:  Futures were higher in New York and in London on a lack of news and despite ideas of good growing conditions in Brazil.  Support came from a lack of supply in Brazil at this time and on concern that previous bad growing conditions have hurt production potential in the Cerrado, home of about 10% of all Brazil production.  The chart trends are mixed to up in New York and mixed in London due to the big production ideas, and futures could form a bottom in the current trading range.  Cecafe noted reduced exports from Brazil in January.  The ICO noted that demand remains very strong in the world market and that demand could outstrip supply in the next few weeks.  Rains were reported in Brazil Coffee areas over the weekend and showers are continuing through this weekend.  It is dry in other parts of Latin America.  Central America has had less than normal rains, especially in Honduras.  The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low.  Vietnam exports remain behind a year ago, but the market anticipates bigger offers.  Vietnamese crops are expected to be big despite uneven growing conditions earlier in the year.

Overnight News:  ICE certified stocks are lower today at 2.161 million bags.  The ICO daily average price is now 101.73 ct/lb.  Brazil will get scattered showers with near to below normal temperatures through Thursday and near to above normal temperatures after that.  Vietnam will see mostly dry conditions in the south and some light to moderate showers in the north.

Chart Trends:  Trends in New York are mixed to up with no objectives.  Support is at 100.00, 97.00, and 96.00 March, and resistance is at 106.00, 110.00 and 111.00 March.  Trends in London are mixed.   Support is at 1250, 1240, and 1230 March, and resistance is at 1290, 1300, and 1320 March.

 

DJ Brazil Arabica Coffee Growers Expect Good Harvest — Market Talk

0901 ET – Brazilian farmers growing arabica coffee are expecting a good harvest in 2020, though probably not better than the record set in 2018. Carlos Augusto Rodrigues de Melo, president of Cooxupe, Brazil’s biggest coffee cooperative, said his organization expects its members and other growers who sell through the group to deliver 6.8 million 132-pound bags of coffee this year, and the cooperative expects to export 5.04 million bags. Growth in demand from countries in Asia and the Middle East has been a pleasant surprise, de Melo said, and Cooxupe has already sold 40% of its expected crop for this year. Brazilian crop agency Conab has forecast a total coffee crop of as many as 62 million bags this year, including 46 million bags of arabica and 16 million bags of robusta. In 2018 Brazil’s farmers produced 47.5 million bags of arabica, according to Conab. (jeffrey.lewis@wsj.com)

 

SUGAR               

General Comments:  New York closed mostly a little higher and London closed lower with the end of March trading in London the main trade feature.  The end of March trading in London caused some speculative and perhaps some commercial long liquidation.  Short Asian production continued to be the main feature overall.  Trends are still mostly up up in both markets and funds have been big buyers until today.  Current tight supplies, especially of White Sugar, are helping the market to rally.  Reports indicate that little is on offer from India.  Thailand will also have less this year due to reduced planted area and erratic rains during the monsoon season.  Losses in both countries would affect the White Sugar market more than New York.  Reports of improving weather in Brazil continue to imply good crops there.  Farmers have been selling to mills but the harvest is now almost over so the supplies will start to tail off.  Brazil mills continue to favor ethanol in the production mix, but current higher prices for Sugar make it economic to open more processing to Sugar instead of ethanol.  Petrobras announced it was cutting the price of gasoline in its filling stations this week, so more Sugar and less Ethanol might be on the way.

Overnight News:  Brazil will get scattered showers.  Temperatures should be near to below normal through Thursday, then near to above normal.

Chart Trends: Trends in New York are mixed to up with objectives of 1640 March.  Support is at 1510, 1500, and 1480 March, and resistance is at 1580, 1610, and 1640 March.  Trends in London are mixed to up with no objectives.  Support is at 420.00, 415.00, and 411.00 March, and resistance is at 428.00, 438.00, and 456.00 March.

 

COCOA              

General Comments:  New York and London closed higher as the fundamentals of less supply became more important. Arrivals in Ivory Coast have been consistently ahead of last year until falling slightly below last year in the most recent data.  Harvest is now active in West Africa and the results so far are good.  Ideas are that demand is currently very strong.  The reports from West Africa imply that a big main crop harvest is possible in the region, but there are questions about how big the mid crop can be.  The weather in Ivory Coast is now dry and increasingly warm.  The weather is too dry in Nigeria and there are fears that the mid crop is not developing well.

Overnight News:  Mostly dry conditions are forecast for West Africa.  Temperatures will be 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 higher today at 3.352 million bags.

Chart Trends:  Trends in New York are mixed to up with objectives of 3100 March.  Support is at 2880, 2850, and 2820 March, with resistance at 2990, 3010, and 3040 March.  Trends in London are mixed to down with objectives of 1950, 1900, and 1840 March.  Support is at 1950, 1940, and 1910 March, with resistance at 2000, 2040, and 2060 March.

 

 

 

 

 

 

 

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