Softs Report - Monday, June 8

COTTON
General Comments: Cotton closed higher on the back of unexpectedly good employment data released by the US government on Friday. Signs of an improving economy in the US and around the world really helped ideas of better Cotton demand despite a negative export sales report that was released on Thursday. Export sales were negative last week for old crop and were only slightly positive for new crop. There is concern that China will stop fulfilling its obligations in the Phase One trade deal due to ramped up US rhetoric on the Chinese response to the Coronavirus epidemic and now the unrest in Hong Kong. The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks. 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.
Overnight News: The Delta will get mostly dry conditions and Southeast will get mostly dry conditions. Temperatures should be mostly above normal. Texas will have dry conditions or isolated showers. Temperatures will average near normal. The USDA average price is now 55.46 ct/lb. ICE said that certified stocks are now 17,636 bales, from 14,289 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 6670 and 6820 July. Support is at 6050, 5970, and 5940 July, with resistance of 6230, 6250 and 6340 July.

FCOJ
General Comments: FCOJ was higher and chart patterns remain positive, especially for the weekly charts. 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. Oranges production was estimated as less in the latest USDA reports at below 70 million boxes, so supplies available to the market are somewhat reduced. Inventories in cold storage remain solid so there will be FCOJ to meet the demand. There is increasing concern about the foodservice demand not improving even with the partial opening of the states. The weather in Florida is currently good for the crops. Southern areas are cooler and have seen more frequent showers. The tree condition is called good. The Valencia harvest is in full swing. Brazil has been dry and irrigation has been used.
Overnight News: Florida should get periods of showers. Temperatures will average near normal. Brazil should get dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 125.00, 123.00, and 121.00 July, with resistance at 129.00, 130.00, and 133.00 July.

COFFEE
General Comments: Futures were higher in New York and in London. The demand from coffee shops and other foodservice operations is improving but is still at very low levels. Consumers are still drinking Coffee at home, but many smaller roasters are actively trying to unload green coffee already bought a there are only a few outlets for sales at this time. The logistics of moving Coffee from Central and South America remain difficult. Producers have had trouble getting workers to pick the cherries and mills and processors have had trouble getting workers to staff the plants. Shipping logistics have improved somewhat, but many are still having trouble getting the Coffee to ports to move to consumer nations. Vietnamese producers are not selling due to the weaker prices paid currently. Indonesian producers are more active sellers.
Overnight News: ICE certified stocks are slightly lower today at 1.745 million bags. The ICO daily average price is now 101.16 ct/lb. Brazil will get some isolated showers with above normal temperatures. Vietnam will see light to moderate showers.
Chart Trends: Trends in New York are down with objectives of 96.00 July. Support is at 95.00, 92.00, and 89.00 July, and resistance is at 102.00, 105.00 and 107.00 July. Trends in London are mixed. Support is at 1180, 1150, and 1120 July, and resistance is at 1210, 1230, and 1240 July.

SUGAR
General Comments: New York and London closed higher in part on stronger petroleum prices. The market acts as if there is a short supply of White Sugar available. The Brazil mills are trying to cover the lack of White Sugar in the market but might switch back to producing ethanol soon if prices continue to improve for the ethanol. Reports indicate that little is on offer from India in part due to logistical and harvest problems caused by the Coronavirus. 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. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. There are reduced flows from rivers from China as well.
Overnight News: Brazil will get a dry week or maybe isolated showers. Temperatures should average near to above normal.
Chart Trends: Trends in New York are up with objectives of 1310 and 1420 October. Support is at 1130, 1120, and 1100 October, and resistance is at 1220, 1260, and 1290 October. Trends in London are up with objectives of 408.00 August. Support is at 385.00, 379.00, and 370.00 August, and resistance is at 400.00, 405.00, and 412.00 August.

COCOA
General Comments: New York closed a little higher and London closed a little lower. Some of the trading was related to changes in currency relationships between the US Dollar and British Pound. Ideas are that deliveries can be slower on any contracted Cocoa and that the next crop could suffer as workers stay away. The Coronavirus helps keep demand away and helps keep workers from grinding facilities and chocolate manufacturers. The removal of the lock downs should improve demand in the short term. Harvest is now over for the main crop in West Africa and the results so far are very good. The reports from West Africa imply that a big harvest in the region. 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 4.250 million bags.
Overnight News:
Chart Trends: Trends in New York are mixed. Support is at 2370, 2320, and 2310 July, with resistance at 2430, 2450, and 2460 July. Trends in London are down with objectives of 1870 and 1820 July. Support is at 1870, 1830, and 1810 July, with resistance at 1910, 1940, and 1970 July.