Softs Report - Friday, August 28

COTTON

General Comments: Cotton closed a little lower. The market is concerned about damage to crops in the Delta from Hurricane Laura but the storm has apparently mixed the growing areas with its worst damage. West Texas weather remains detrimental for crop development as the region has been very dry and hot. The hot and dry weather extends north into Oklahoma and western Kansas. These regions might get helped from the hurricane. Export demand for US Cotton has been poor for the last few weeks but was improved last week. Demand has been soft for other exporting countries. Export demand is the primary demand for US Cotton so poor weekly sales mean weak overall demand. The retail demand has been slow to develop due to Coronavirus restrictions. The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth. It has been very hot and dry in West Texas and farther to the north in the Great Plains and crops, there are suffering.

Overnight News: The Delta will get some scattered showers and the Southeast will get scattered showers. Temperatures should be near to above normal. Texas will have isolated showers this weekend. Temperatures will average near to above normal. The USDA average price is now 59.40 ct/lb. ICE said that certified stocks are now 6,465 bales, from 6,465 bales yesterday.

Chart Trends: Trends in Cotton are mixed to up with objectives of 6870 December. Support is at 6470, 6400, and 6370 December, with the resistance of 6640, 6680, and 6730 December.

FCOJ

General Comments: FCOJ was a little lower. USDA confirmed that Florida production was about 67 million boxes. The Coronavirus is still promoting the consumption of FCOJ at home. Restaurant and foodservice 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.

Chart Trends: Trends in FCOJ are mixed to down with objectives of 111.00, 110.00, and 109.00 September. Support is at 111.00, 109.00, and 108.00 September, with resistance at 116.00, 118.00, and 120.00 September.

COFFEE

General Comments: Futures were higher in New York, but lower in London. Roasters are still taking certified stocks off the exchange instead of buying at the origin. Vietnam was dry during a flowering time and is dry again. Rains are good now. Production ideas are lower. Brazil and Central America are reported to be having problems with shipping due to lockdowns from the Coronavirus. The demand from coffee shops at other foodservice operations is still at very low levels. Consumers are still drinking coffee at home. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. Brazil's harvest is active.

Overnight News: ICE certified stocks are lower today at 1.287 million bags. The ICO daily average price is now 116.97 ct/lb. Brazil will get mostly dry conditions with near to below normal temperatures. Vietnam will see light to moderate showers. ICE said that 2 notices were posted for delivery against September futures and that total delivery for the month are now 39 contracts.

Chart Trends: Trends in New York are mixed. Support is at 120.00, 118.00, and 116.00 December, and resistance is at 125.00, 127.00, and 129.00 December. Trends in London are mixed to up with objectives of 1450 and 1490 November. Support is at 1400, 1380, and 1370 November, and resistance is at 1450, 1470, and 1490 November.

SUGAR

General Comments: New York and London were a little higher but held the previous day's range. Brazilian mills are producing more Sugar and less Ethanol this year due to reduced Ethanol demand according to CONAB. The association there said that crushing was very strong in the first half of August due to dry weather. Ideas are that there is plenty of Sugar for the world market. Getting the Sugar moved is becoming more difficult with the widespread Coronavirus outbreak in both Brazil and India. Brazil appears to be exporting at a good pace. India is having trouble with exports even with a large Sugarcane crop, but futures indicate that the market is supplied with White Sugar now. 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 the irrigation of the crops.

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

Chart Trends: Trends in New York are mixed to down with objectives of 1230 and 1180 October. Support is at 1250, 1230, and 1180 October, and resistance is at 1300, 1330, and 1360 October. Trends in London are down with objectives of 342.00 October. Support is at 350.00, 347.00, and 345.00 October, and resistance is at 365.00, 368.00, and 371.00 October.

COCOA

General Comments: New York and London closed higher and the market is trying to decide if it wants to go sharply higher or to fail. The current crop features strong production but there are worries about the next crop due to dry conditions in West Africa. Nigerian traders told the wire services last week that the Nigerian harvest will be delayed by at least a month due to t dry weather keeping the pods and beans small and keeping the pods from developing normally. 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 lower today at 3.784 million bags. ICE said that 0 notices were posted for delivery today against September futures and that total delivery for the month are now 752 contracts.

Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2500, 2470, and 2460 December, with resistance at 2600, 2670, and 2800 December. Trends in London are mixed. Support is at 1670, 1660, and 1620 December, with resistance at 1730, 1750, and 1760 December.