MORNING SOFTS COMMENTS

MORNING SOFTS COMMENTS 

Jack Scoville 

Thursday, August 06, 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 closed a little higher on hopes for improved demand and as bad growing conditions continued in West Texas.  Economic improvement in the US was thrown into doubt as Coronavirus cases surged higher in states that had reopened and some chains have declared bankruptcy.  The retail demand has been slow to develop as many consumers got hurt economically due to stay at home orders during the height of the pandemic and have little disposable funds to spend on clothes.  Demand will slowly improve but the industry should have plenty of supplies to work with in the short term.  The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth.  However, it has been very hot and dry in West Texas and crops there are suffering. 

Overnight News:  The Delta will get scattered showers and Southeast will get isolated showers.  Temperatures should be near to above normal.  Texas will have scattered showers.  Temperatures will average near to above normal.  The USDA average price is now 59.72 ct/lb.  ICE said that certified stocks are now 6,800 bales, from 6,800 bales yesterday.  USDA said that net Upland Cotton export sales were -68,500 bales this year and 130,800 bales next year.  Net Pima sales were 0 bales this year and 13,300 bales next year.          

Chart Trends:  Trends in Cotton are mixed.  Support is at 6260, 6180, and 6080 December, with resistance of 6430, 6580 and 6680 December. 

FCOJ 

General Comments:  FCOJ was lower in what appeared to be speculative and fund selling.  New crop Florida production could be hurt by an extended flowering season for the early varieties.   Support is coming from the continued effects from the Coronavirus that are keeping people at home and drinking Orange Juice.  Demand from grocery stores has remained strong in response to the increased consumer demand.  Inventories in cold storage remain solid so there will be FCOJ to meet the demand, but inventories are creeping lower.  There is concern about the food service demand not improving even with the partial opening of the states.  The weather in Florida [JS1] is currently good for the crops.  Prices in the US are lower than those in Europe, so imports are minimal.  The tree condition is called good.  Brazil has been dry and irrigation has been used.  The harvest is active in Brazil.   

Overnight News:  Florida should get isolated showers.  Temperatures will average near to above normal.   Brazil should get dry conditions and near to below normal temperatures.   

Chart Trends:  Trends in FCOJ are down with objectives of 113.00 and 111.00 September.  Support is at 112.00, 109.00, and 108.00 September, with resistance at 118.00, 120.00, and 124.00 September. 

COFFEE   

General Comments:  Futures were mixed ro higher in New York, but closed well off the highs of the day.  London closed lower after making new highs for the move..  The US Dollar was lower.  Chart trends are up for at least the short term in Coffee.  Vietnam was dry during flowering time and also recently but there are some showers around now.  Production ideas are lower.  Exports have been difficult due to lockdowns from the Coronavirus.  Demand overall remains down with the US still locking down due to the Coronavirus resurgence in some states.  The demand is especially soft for Arabica with the coffee shops closed and people at home.  Robusta demand has been stronger.  The demand from coffee shops and other food service operations is still at very low levels.  Consumers are still drinking Coffee at home and the return of the Coronavirus outbreak will keep things that way.  Europe is emerging from lockdowns, but the Coronavirus has returned to many countries there.  The Brazil harvest is active but shipping and collection have become very difficult due to the widespread outbreak of the Coronavirus there.  Even so, the pickers are showing up for work and ports are operating normally.  Ideas are that production will be very strong this year as it is the on year for the trees.  The strong production ideas are coming despite hot and dry weather seen in the country at flowering time.     

Overnight News:  ICE certified stocks are much lower today at 1.523 million bags.  The ICO daily average price is now 116.07 ct/lb.  Brazil will get mostly dry conditions with near to below normal temperatures.  Vietnam will see light to moderate showers.    

Chart Trends:  Trends in New York are up with no objectives.  Support is at 120.00, 114.00, and 110.00 September, and resistance is at 127.00, 129.00 and 131.00 September.  Trends in London are up with objectives of 1430 and 1510 September.   Support is at 1380, 1350, and 1320 September, and resistance is at 1430, 1440, and 1460 September[JS2] . 

SUGAR                 

General Comments:  New York and London closed mostly lower.  Demand has been good, with China buying a lot of Sugar in Brazil.  Ideas are that there is plenty of Sugar for the world market, but getting the Sugar moved is becoming more difficult with the widespread Coronavirus outbreak in both Brazil and India.  Brazil mills have shifted part of the crush to Sugar production due to less ethanol demand.  India is thought to have a very big crop of Sugarcane this year but getting it into Sugar and into export position has become extremely difficult due to Coronavirus lockdowns.  Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season.  There are reduced flows from rivers from China to prevent irrigation of the crops.  European crops are mixed with the weather good in some areas and too hot and dry in other areas.   

Overnight News:  Brazil will get dry conditions or isolated showers.  Temperatures should average near normal.   

Chart Trends: Trends in New York are up with objectives of 1310 October.  Support is at 1230, 1190, and 1170 October, and resistance is at 1290, 1310, and 1320 October.  Trends in London are mixed to up with objectives of 401.00 Oct4ober.  Support is at 369.00, 360.00, and 350.00 October, and resistance is at 378.00, 380.00, and 38.00 October. 

COCOA                

General Comments:  New York closed higher and London closed mixed.  The West Africa harvest is over to promote higher prices.  There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US.  Europe is still trying to open its markets again but the Coronavirus is still around and consumers are reluctant to buy.  Coronavirus is expanding in Europe and new lockdowns are possible.  Harvest is now over for the main crop in West Africa and the results are very good.  The reports from West Africa imply that a big harvest in the region.  Ideas are that Southeast Asia also has good crops. 

Overnight News:  Isolated to scattered showers are forecast for West Africa.  Temperatures will be near 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 4.006 million bags.       

Overnight News: 

Chart Trends:  Trends in New York are up with no objectives.  Support is at 2440, 2390, and 2350 September, with resistance at 2530, 2580, and 2620 September.  Trends in London are up with objectives of 1720 September.  Support is at 1620, 1580, and 1520 September, with resistance at 1680, 1700, and 1730 September. 

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