Softs Report - Friday, October 30

COTTON

General Comments: Cotton closed lower on trading tied to the higher US Dollar and the return of the Coronavirus outbreak to the US and Europe. Heavy rains are returning to the Southeast this week and Cotton could be hurt again as a new hurricane is onshore along the Louisiana coast and moving northeast into Mississippi and Alabama. Hurricane Delta moved through the Delta and Southeast a couple of weeks ago and did some damage to Cotton. Open bolls were reported in both regions and Cotton fiber was discolored or else blown out of the bolls due to the rain and winds. The discolored Cotton is getting a chance to recover now as it has turned dry and the fiber can be naturally bleached by the Sun. Demand should stay generally weak as long as the Coronavirus is around. Shopping is hard to do and many people are still unemployed.

Overnight News: The Delta and Southeast will get scattered showers with big storms possible as the hurricane comes onshore today. Temperatures should average near to above normal in the Delta and in the Southeast. Texas will have showers and snow. Temperatures will average near to above normal. The USDA average price is now 65.07 ct/lb. ICE said that certified stocks are now 45,898 bales, from 44,471 bales yesterday. USDA said that net Upland Cotton export sales were 288,700 bales this year and 900 bales next year. Net Pima sales were 32,700 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are down with objectives of 6850, 6720f, and 6390 December. Support is at 6920, 6810, and 6780 December, with a resistance of 7030, 7260, and 7300 December.

DJ On-Call Cotton – Oct 29 As of Oct 23. On-call positions represent spot cotton sold to or purchased from a merchant, based on New York cotton futures contracts of 500-pound bales. Prices are not yet fixed against these contracts. Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Dec 20 26,995 31,723 -4,728 13,667 15,306 -1,639
Mar 21 32,857 31,191 1,666 10,129 9,148 981
May 21 13,888 13,755 133 1,685 1,636 49
Jul 21 17,752 17,546 206 3,003 3,050 -47
Oct 21 0 0 0 0 0 0
Dec 21 10,560 8,708 1,852 11,651 10,329 1,322
Mar 22 2,005 1,873 132 212 212 0
May 22 473 473 0 26 26 0
Jul 22 348 348 0 233 233 0
Dec 22 0 0 0 1,483 1,395 88
Jul 23 0 0 0 220 220 0
Dec 23 0 0 0 227 227 0
Mar 24 0 0 0 441 441 0
Total 104,878 105,617 -739 42,977 42,223 754
Open Open Change
Int Int
Dec 20 127,400 126,117 1,283
Mar 21 71,274 65,350 5,924
May 21 15,264 14,687 577
Jul 21 10,970 10,564 406
Oct 21 6 5 1
Dec 21 19,532 18,139 1,393
Mar 22 1,095 1,093 2
May 22 258 246 12
Jul 22 378 349 29
Dec 22 720 671 49
Jul 23 1 1 0
Dec 23 0 0 0
Mar 24 0 0 0
Total 246,898 237,222 9,676

FCOJ

General Comments: FCOJ was lower with the deferred months the weakest. Traders were rolling positions out of November and into January or later months. Florida has been spared any hurricanes or other serious storms this year in a year that has been very active for tropical storms. The current tropical system will also miss the state as it moves into the central Gulf coast and then into Mississippi, Louisiana, and Alabama. The state will just get scattered showers. The Coronavirus is still promoting consumption of FCOJ at home. Restaurant and foodservice demand has been much less as no one is really dining out. Florida weather is good with frequent showers to promote good tree health and fruit formation. Showers are falling in Brazil now to help production and tree condition. Mexican crop conditions are called good to very good with ample rains.

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

Chart Trends: Trends in FCOJ are mixed. Support is at 111.00, 108.00, and 107.00 January, with resistance at 116.00, 117.00, and 119.00 January.

COFFEE

General Comments: Futures were lower in both markets on speculative selling caused by investor worries about the higher US Dollar. London was better supported due to stronger demand ideas and worries about the weather in Vietnam. The country is getting too much rain now and flooding is being reported in the Central Highlands. The rains should continue for at least another week as there are two more tropical systems taking aim at 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. The Brazil harvest is over and producers are selling due to the recent extreme weakness in the Real. 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 and Peru.

Overnight News: ICE certified stocks are higher today at 1.149 million bags. The ICO daily average price is now 104.80 ct/lb. Brazil will get scattered showers and rains with above normal temperatures. Vietnam will see some big rains.

Chart Trends: Trends in New York are mixed. Support is at 103.00, 100.00, and 98.00 December, and resistance is at 108.00, 109.00, and 111.00 December. Trends in London are mixed to up with objectives of 1380, 1400, and 1480 January. Support is at 1330, 1310, and 1290 January, and resistance is at 1360, 1380, and 1400 January.

SUGAR

General Comments: New York and London were lower on the higher US Dollar and weaker Real. Part of the action in London featured traders rolling out of December positions and into March. Rains are falling now in Brazil to improve Sugarcane growing conditions and the weaker Real makes selling into the world market very profitable. India has a very big crop of Sugarcane this year but the exports have been hard to make. The Indian government has not yet announced the subsidy for exporters of Sugar so no one knows how much to charge yet. Ideas are that the government will allow big exports, but with small subsidies. 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 so the next crop can be improved. The EU is having problems with its Sugarbeets crop due to weather and disease. Brazil mills have been producing more Sugar and less Ethanol due to weak world and domestic petroleum prices. Demand appears to be about average.

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

Chart Trends: Trends in New York are mixed. Support is at 1420, 1410, and 1370 March, and resistance is at 1470, 1500, and 1520 March. Trends in London are mixed to down with objectives of 382.00 and 368.00 March. Support is at 389.00, 385.00, and 381.00 March, and resistance is at 398.00, 404.00, and 406.00 March.

COCOA

General Comments: New York and London were lower on demand concerns caused by the Coronavirus outbreak that seems to be surging again in the US and in the EU. New York was weaker on the surging US Dollar. The harvest for the next main crop is spreading through 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. The North American and European cocoa grinds were at least 4% lower than a year ago and the Asian cocoa grind was down 10% from last year. Ivory Coast is in the middle of the presidential campaign season and some violences expected.

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 mostly dry conditions today and showers this weekend and near to above normal temperatures. ICE certified stocks are much lower today at 3.464 million bags.

Chart Trends: Trends in New York are mixed to down with objectives of 2290 and 2160 December. Support is at 2370, 2300, and 2240 December, with resistance at 2410, 2430, and 2470 December. Trends in London are mixed to down with objectives of 1520 December. Support is at 1620, 1590, and 1570 December, with resistance at 1640, 1690, and 1720 December.