MORNING SOFTS COMMENTS

MORNING SOFTS COMMENTS 

Jack Scoville 

Tuesday, September 15, 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 higher on weather concerns as Hurricane Sally was expected to come onshore from the Gulf if Mexico near the Louisiana-Mississippi border area and then curve into the Delta and Southeast.  The storm is expected to drop a lot of rain on the open bolls in Alabama and Georgia and perhaps bring some wind to these areas as well.  The rain could damage the fiber in the open bolls.  Demand has improved over the last couple of weeks but remains at depressed levels.  It was a supply side rally.  Demand should stay week as long as the Coronavirus is a feature of life around the world.  Shopping is hard to do and many people are still unemployed.  This is especially true for the US but it is true to some degree in just about all countries.  The Harvest is still a ways down the road and the tropical season is active.  There will be more chances to inflict more damage on the crops to help try to rally prices.    

Overnight News:  The Delta will get mostly dry conditions and Southeast will get isolated showers.  Temperatures should be near to above normal.  Texas will have scattered showers.  Temperatures will average below normal.  The USDA average price is now 60.25 ct/lb.  ICE said that certified stocks are now 5,913 bales, from 5,913 bales yesterday.              

Chart Trends:  Trends in Cotton are mixed to up with objectives of 6820, 6860, and 6870 December.  Support is at 6550, 6430, and 6330 December, with resistance of 6680, 6720 and 6840 December. 

Crop Progress  
Date 6-Sep 30-Aug 2019 Avg  
Cotton Bolls Opening 47 37 51 45  
Cotton Harvested  
Crop Condition 
Very Poor Poor Fair Good  Excellent 
Cotton This Week 20 28 36 
Cotton Last Week 11 16 28 36 
Cotton Last Year 14 42 34 

FCOJ 

General Comments  FCOJ was a little lower in light volume trading.  It was mostly a consolidation day as the highs and lows were well within the highs and lows of previous days.  The daily and weekly charts show that trends are starting to turn down again.  USDA on Friday left its Florida production estimate unchanged at 67.7 million boxes.  This was about as expected by the trade.  No hurricanes have hit Florida yet.  The systems have all gone south into the Gulf of Mexico or north into the Carolinas.  That usually means lower prices for futures but prices are already relatively cheap.  The Coronavirus is still promoting consumption of FCOJ at home.  Restaurant and food service demand has been much less as no one is really dining out.  Florida production prospects for the new crop were hurt by an extended flowering period, but the weather is good now with frequent showers to promote good tree health and fruit formation.  Import demand to the US should be minimal as US prices remain below those of Europe.  Brazil has been too dry and irrigation is being used.  Some showers are in the region now to help in Sao Paulo. 

Overnight News:  Florida should get scattered showers.  Temperatures will average above normal.   Brazil should get dry conditions and near normal temperatures.  ICE said that 0 notices were posted against September contracts for delivery and that deliveries for the month are now 273 contracts.   

Chart Trends:  Trends in FCOJ are mixed.  Support is at 114.00, 113.00, and 110.00 November, with resistance at 118.00, 121.00, and 126.00 November. 

COFFEE   

General Comments:  Futures were sharply lower in New York and in London.  New York hit a wall of selling at the 135.00 area basis December futures.  London has been the leader on the recent rally as demand for Robusta has improved with people staying at home and it was down less yesterday.  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 Coronavirus outbreak will keep things that way.  Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica.  Vietnam was dry during flowering time but is getting some showers now.  Production ideas are lower.  The Brazil harvest is over.  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.  Showers were improved after the dry time.   

Overnight News:  ICE certified stocks are slightly higher today at 1.117 million bags.  The ICO daily average price is now 116.97 ct/lb.  Brazil will get mostly dry conditions with above normal temperatures.  Vietnam will see light to moderate showers.  ICE said that 107 notices were posted for delivery against September futures and that total deliveries for the month are now 557 contracts.    

Chart Trends:  Trends in New York are down with objectives of 121.00 and 113.00 December.  Support is at 121.00, 118.00, and 117.00 December, and resistance is at 128.00, 130.00 and 132.00 December.  Trends in London are mixed to down with objectives of 1380, 1340, and 1330 November.   Support is at 1380, 1360, and 1280 November, and resistance is at 1420, 1440, and 1470 November[JS1] . 

SUGAR                 

General Comments:  New York and London was lower on speculative and fund related selling.  Brazil producers were also selling.  Chart trends are down in both markets.  Ethanol demand is down in Brazil due to weaker world and domestic petroleum prices so mills there are producing more Sugar in the mix.  Ideas are that there is plenty of Sugar for the world market.  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 hinder irrigation of the crops.   

Overnight News:  Brazil will get dry conditions.  Temperatures should average above normal.     

Chart Trends: Trends in New York are mixed to down with no objectives.  Support is at 1240, 1230, and 1220 March, and resistance is at 1290, 1300, and 1310 March.  Trends in London are down with no objectives.  Support is at 347.00, 345.00, and 342.00 December, and resistance is at 353.00, 355.00, and 360.00 December. 

COCOA                

General Comments:  New York closed slightly higher and London closed mixed to a little lower in consolidation trading.  It was a rather narrow range trade for both markets and currency relationship changes were the main driver of the market changes.  The charts show that both markets are in sideways to down trends.  The current crop features strong production but there are worries about the next crop.  Nigerian traders told the wire services that the Nigerian rainfall has started and that crop conditions are much improved.  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.  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 near unchanged today at 3.723 million bags.  ICE said that 0 notices were posted for delivery today against September futures and that total deliveries for the month are now 965 contracts.   

Chart Trends:  Trends in New York are mixed to down with objectives of 2450, 2380, and 2320 December.  Support is at 2520, 2500, and 2470 December, with resistance at 2590, 2650, and 2710 December.  Trends in London are mixed to down with objectives of 1740, 1690, and 1630 December.  Support is at 1760, 1730, and 1700 December, with resistance at 1830, 1850, and 1880 December. 

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