MORNING SOFTS COMMENTS

MORNING SOFTS COMMENTS

                                       

 

Jack Scoville

 

Wednesday, February 19, 2020

 

 

 

Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

 

JSL, SA de CV

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

 

JSL, SA

jslsa@comcast.net

 

 

 

 

 

COTTON           

General Comments:  Cotton was higher yesterday.  Futures tried to rally on news that China had approved the first round of tariff reductions to comply with the deal with the US.  Ideas that countries like India were about out of Cotton meant that demand was likely for this market sooner rather than later.  Big buying from China could rally the market, but futures have already moved significantly higher in anticipation of any Chinese buying and the actual buying could become anti climatic.  The Coronavirus has the chance to hurt trade in Cotton between the two countries.  Chinese buyers might need less Cotton now as factories inside their country were closed for an extended holiday.  All are reopen now.

Overnight News:  The Delta and Southeast should see some big rains early today, Thursday, and Sunday.  Temperatures should average near to below normal.  Texas will have mostly dry weather but some very light precipitation is possible tomorrow and Sunday.  Temperatures will trend to below normal for the week and above normal by Sunday.  The USDA average price is now 63.44 ct/lb.  ICE said that certified stocks are now 33,259 ba1es, from 32,990 bales yesterday.

Chart Trends:  Trends in Cotton are mixed.  Support is at 6780, 6720, and 6680 March, with resistance of 6890, 6910 and 6990 March.

 

FCOJ

General Comments:  FCOJ was a little lower yesterday.  Futures are still in a range and act as if it could work higher despite bearish fundamentals.  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.  Inventories of FCOJ in the state are high and are more than 26% above last year.

Overnight News:  Florida should get mostly dry conditions.  Temperatures will average near to below 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.

 

COFFEE 

General Comments:  Futures were lower in New York and in London after trading higher in the first part of the day.  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.  Selling came from the further deterioration in the Real against the US Dollar and on ideas of reduced demand due to the Caronavirus and other health issues oversea.  Weather in Brazil is reported to be good away from the Cerrado.  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 higher today at 2.163 million bags.  The ICO daily average price is now 103.78 ct/lb.  Brazil will get scattered showers with near to below normal temperatures.  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 103.00, 103.00, and 100.00 March, and resistance is at 110.00, 111.00 and 114.00 March.  Trends in London are mixed.   Support is at 1250, 1240, and 1230 March, and resistance is at 1290, 1300, and 1320 March.

 

SUGAR               

General Comments:  New York and London closed higher in range trading.  It was a good recovery from the selling seen last week, and the market could easily stabilize in this area.  Reports indicate that little is on offer from India, although India should have a big supply inside the country.  Thailand might 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 imply good crops there and some analysts in Brazil are noting that the production has been very good.  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 at this time.

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.  Support is at 1480, 1460, and 1440 March, and resistance is at 1540, 1590, and 1610 March.  Trends in London are mixed.  Support is at 410.00, 404.00, and 396.00 May, and resistance is at 420.00, 424.00, and 435.00 May.

 

COCOA              

General Comments:  New York and London closed lower in range trading.  Funds and other speculators were more two sided in trading.  Producers were sellers in both markets.  Harvest is active in West Africa and the results so far are very good.  Ideas are that demand is currently very strong due to the current price action.  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 is good.  The weather is too dry in Nigeria and there are fears that the mid crop is not developing well at this time.

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 3.459 million bags.  ICE said that 0 notices were posted for delivery against March futures and that total deliveries for the month are now 55 contracts.

Chart Trends:  Trends in New York are mixed.  Support is at 2880, 2850, and 2820 March, with resistance at 2990, 3010, and 3040 March.  Trends in London are mixed.  Support is at 1950, 1940, and 1910 March, with resistance at 2000, 2040, and 2060 March.

 

 

 

 

 

 

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