MORNING SOFTS COMMENTS

MORNING SOFTS COMMENTS

                                       

 

Jack Scoville

 

Tuesday, March 03, 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 sharply higher in recovery trading as Chinese companies can now apply for tariff relief for US imports of all ag goods.  The selling came in part due to a delayed response to the shocks caused by the Coronavirus and in part due to the very strong US Dollar Index.  The Coronavirus has the chance to hurt trade in Cotton between the US and China.  Chinese buyers might need less Cotton now as factories inside their country were closed for an extended holiday.  All are reopen now, but the manufacturing pace has been slow.  The strong US Dollar hurts trade anywhere and pushes buying to alternative growths like Brazil.  Brazil has the quality to compete with the US and the Real is much cheaper than the US Dollar right now.

Overnight News:  The Delta and Southeast should see some big rains today and tomorrow.  Temperatures should average near to above normal.  Texas will have showers through Thursday, then mostly dry weather.  Temperatures will trend to near to below normal.  The USDA average price is now 58.06 ct/lb.  ICE said that certified stocks are now 37,522 ba1es, from 37,522 bales yesterday.  ICE said that 0 notices were posted for delivery against March Cotton contracts and that total deliveries for the month are now 359 contracts.

Chart Trends:  Trends in Cotton are mixed.  Support is at 6220, 6170, and 6120 May, with resistance of 6490, 6600 and 6770 May.

 

FCOJ

General Comments:  FCOJ was slightly higher in range trading.  Futures have really recovered from the lows set previously, but there does not seem to be a good reason why except for the chance that more people could drink FCOJ due to the Coronavirus.  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 23% above last year.  The year to year percentage change has decreased as the increase in inventories happened last year and has held high this year.  Dry weather is still a problem in Mexico, but Brazil growing conditions are called good.

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.  Support is at 96.00, 92.00, and 91.00 May, with resistance at 100.00, 103.00, and 104.00 May.

 

COFFEE 

General Comments:  Futures were much higher in New York and a little higher in London.  It has been a New York rally for the last few sessions.  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.  Many producers and exporters have run out of Coffee in storage to sell.  The chart trends are up in New York on the lack of supply and mixed in London due to the big production ideas.  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 2.136 million bags.  The ICO daily average price is now 109.00 ct/lb.  Brazil will get scattered showers with near normal temperatures.  Vietnam will see mostly dry conditions in the south and some light to moderate showers in the north.  ICE said that 0 notices were posted for delivery against March contracts and tat total deliveries for the month are now 1,249 contracts.

Chart Trends:  Trends in New York are up with objectives of 121.00 and 130.00 May.  Support is at 112.00, 107.00, and 105.00 May, and resistance is at 118.00, 121.00 and 125.00 May.  Trends in London are mixed.   Support is at 1270, 1260, and 1230 May, and resistance is at 1300, 1320, and 1340 May.

 

SUGAR               

General Comments:  New York and London closed lower.  The weaker petroleum futures markets overall make higher priced ethanol that much more expensive to blend and cuts demand.  That makes more Sugarcane available for processing into Sugar.  The mills are trying to cover the lack of White Sugar in the market.  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.  Losses in both countries would affect the White Sugar market more than New York.  Reports of improving weather in Brazil 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 at this time.

Overnight News:  Brazil will get scattered showers.  Temperatures should be near normal.

Chart Trends: Trends in New York are down with objectives of 1370 May.  Support is at 1380, 1350, and 1320 May, and resistance is at 1440, 1450, and 1470 May.  Trends in London are down with objectives of 388.00 May.  Support is at 391.00, 389.00, and 379.00 May, and resistance is at 400.00, 405.00, and 409.00 May.

 

COCOA              

General Comments:  New York and London closed lower.  Funds and other speculators were net sellers.  Harvest is now almost over for the main crop in West Africa and the results so far are very good.  Ideas are that demand is currently strong but less than before.  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 Ghana and 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 lower today at 3.712 million bags.  ICE said that 664 notices were posted for delivery against March futures and that total deliveries for the month are now 727 contracts.

Chart Trends:  Trends in New York are down with objectives of 2600 May.  Support is at 2620, 2580, and 2550 May, with resistance at 2700, 2740, and 2790 May.  Trends in London are down with objectives of 1920 and 1840 May.  Support is at 1930, 1910, and 1880 May, with resistance at 1980, 2000, and 2030 May.

 

 

 

 

 

 

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