MORNING SOFTS COMMENTS

MORNING SOFTS COMMENTS

Jack Scoville

Thursday, July 30, 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 closed a little higher on demand concerns as bad growing conditions continued in West Texas.  Ideas are that demand improved when futures moved to new lows earlier in the week.  West Texas is now getting some rains from the tropical system that hit the state, but this will only serve to stabilize the situation.  Export demand for US Cotton has been poor for the last few weeks.  The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks.  However, economic improvement in the US was thrown into doubt as Coronavirus cases surged higher in states that had reopened.  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 56.74 ct/lb.  ICE said that certified stocks are now 7,545 bales, from 7,545 bales yesterday.           

Chart Trends:  Trends in Cotton are mixed to down with objectives of 5990 and 5790 December.  Support is at 5950, 5930, and 5890 December, with resistance of 6190, 6270 and 6340 December.

FCOJ

General Comments:  FCOJ was a little higher in recovery trading.  Trends are still turning down in this market.  The fundamentals remain mostly positive for prices, but it has been a while since any new bullish input was seen.  Florida production is now estimated at 67 million boxes, unchanged from last month.  New crop production could be hurt by an extended flowering season for the early varieties.   California and US production was increased.  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 increasing concern about the food service demand not improving even with the partial opening of the states.  The weather in Florida is currently good for the crops.  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 118.00, 116.00, and 108.00 September, with resistance at 123.00, 126.00, and 128.00 September.

COFFEE 

General Comments:  New York and London closed higher on the weaker US Dollar and less offer from some producing countries.  Chart trends remain up for at least the short term.  Vietnam was dry during flowering time and is dry again.  Production ideas are lower.  Demand overall remains down with the US still locking down due to the Coronavirus resurgence in some states.  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 still emerging from lockdowns but there have been reversals as Coronavirus has reemerged.  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 higher today at 1.598 million bags.  The ICO daily average price is now 109.85 ct/lb.  Brazil will get mostly dry conditions with near to above normal temperatures.  Vietnam will see light to moderate showers.   

Chart Trends:  Trends in New York are up with no objectives.  Support is at 109.00, 107.00, and 105.00 September, and resistance is at 114.00, 115.00 and 120.00 September.  Trends in London are up with no objectives.   Support is at 1330, 1310, and 1290 September, and resistance is at 1390, 1400, and 1430 September.

SUGAR               

General Comments:  New York and London closed higher and trends remain up in both markets.  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 hinder irrigation of the crops. 

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

Chart Trends: Trends in New York are mixed to up with objectives of 1240 and 1310 October.  Support is at 1170, 1150, and 1130 October, and resistance is at 1220, 1240, and 1260 October.  Trends in London are up with objectives of 373.00 and 401.00 Oct4ober.  Support is at 360.00, 350.00, and 347.00 October, and resistance is at 370.00, 376.00, and 378.00 October.

COCOA              

General Comments:  New York and London closed higher.  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.  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.  Arrivals are on a pace about the same as last year.  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 higher today at 4.058 million bags.      

Overnight News:

Chart Trends:  Trends in New York are up with objectives of 2430 September.  Support is at 2300, 2250, and 2220 September, with resistance at 2360, 2400, and 2430 September.  Trends in London are up with objectives of 1640 and 1720 September.  Support is at 1580, 1550, and 1520 September, with resistance at 1660, 1700, and 1720 September.

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