Softs Report - Friday, Nov. 6

COTTON

General Comments: Cotton closed slightly higher in consolidation trading. The weekly export sales report showed just a typical demand. All eyes are on the WASDE report next week that is expected to show less production. It could also show less demand. The return of the Coronavirus threatens demand potential for Cotton at home and around the world. The good news is that most Asian countries are noting a return of the virus to pandemic levels, but the bad news is that Europe and the US are and a lot of the Cotton that is exported to Asia gets sent back west as clothes. Demand should stay generally weak as long as the Coronavirus is around.

Overnight News: The Delta and Southeast will get mostly dry conditions. Temperatures should average near to above normal in the Delta and in the Southeast. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 65.57 ct/lb. ICE said that certified stocks are now 66,598 bales, from 59,671 bales yesterday. USDA said yesterday that net Upland Cotton export sales were 115,600 bales this year and 55,700 bales next year. Net Pima sales were 16,800 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 6960, 6910, and 6810 December, with the resistance of 7110, 7180 and 7210 December.

FCOJ

General Comments: FCOJ was a little lower and continues to hold in the upper part of the recent trading range. Futures trade slightly higher early in the session but could not break through resistance areas on the daily charts. Florida has been spared any hurricanes or other serious storms this year in a year that has been very active for tropical storms. 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. Brazil has been too dry and irrigation is being used. Showers are falling in Brazil now. Mexico is now experiencing dry weather but the condition is still called good for crops.

Overnight News: Florida should get isolated showers. Temperatures will average near to above normal. Brazil should get scattered showers and near to above normal temperatures. ICE said that 0 notices were posted for delivery against November contracts and that total delivery for the month are 0 contracts.

Chart Trends: Trends in FCOJ are mixed. Support is at 112.00, 110.00, and 108.00 January, with resistance at 116.00, 118.00, and 121.00 January.

COFFEE

General Comments: Futures were higher in both markets due primarily to the weaker US Dollar. Worries about the weather in Vietnam continue as the country is getting too much rain now and flooding is being reported in the Central Highlands. The rains should continue for another week as a couple of tropical systems appear headed for the country. The demand from coffee shops and other foodservice operations is still at very low levels as consumers are still drinking coffee at home. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. Brazil producers are selling due to the weakness in the Real but are holding now with the US Dollar fading. Ideas are that production is very strong this year as it is the on year for the trees. Central America is also offering right now and offers are increasing. The weather is good in Colombia but a little dry in Brazil and Peru. Too much rain is falling in Central America due to a tropical system.

Overnight News: ICE certified stocks are unchanged today at 1.160 million bags. The ICO daily average price is now 106.10 ct/lb. Brazil will get scattered showers and rains with near to above normal temperatures. Vietnam will see some big rains.

Chart Trends: Trends in New York are mixed. Support is at 104.00, 102.00, and 99.00 December, and resistance is at 108.00, 111.00, and 112.00 December. Trends in London are mixed. Support is at 1310, 1280, and 1240 January, and resistance is at 1340, 1360, and 1380 January.

SUGAR

General Comments: New York and London were mostly a little lower in consolidation trading. Coronavirus has returned to the US and Europe and has caused some demand concerns. Brazil mills have been producing more Sugar and less Ethanol due to weak world and domestic petroleum prices. About 45% of the crush this year will go to Sugar, from 35% last year. It has been dry lately to affect Sugarcane production and producers are less aggressive sellers. Rains are falling now to improve Sugarcane's growing conditions. India has a very big crop of Sugarcane this year but the exports have been hard to make due to the lack of an export subsidy from the Indian government. Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season. Rains are moving through the country now from Vietnam and the Pacific. The EU is having problems with its Sugarbeets crop due to weather and disease.

Overnight News: Brazil will get scattered showers. Temperatures should average above normal.

Chart Trends: Trends in New York are mixed. Support is at 1440, 1400, and 1370 March, and resistance is at 1480, 1500, and 1530 March. Trends in London are mixed. Support is at 391.00, 384.00, and 381.00 March, and resistance is at 403.00, 406.00, and 409.00 March.

COCOA

General Comments: New York and London were higher on the weaker US Dollar and ideas of more government support in the US and Europe for citizens. More stimulus spending would mean better demand for Chocolate. The harvest for the next main crop is almost done for much of West Africa and very strong production is expected. There are a lot of demand worries as the Coronavirus is making a comeback in the US. Europe is also seeing a return of the pandemic.

Overnight News: 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 scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 3.382 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2240, 2170, and 2130 December, with resistance at 2330, 2370, and 2410 December. Trends in London are mixed. Support is at 1570, 1540, and 1510 December, with resistance at 1630, 1650, and 1670 December.