Softs Report - Monday, Nov. 2

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. Temperatures should average near to above normal in the Delta and in the Southeast. Texas will have showers. Temperatures will average near to above normal. The USDA average price is now 64.21 ct/lb. ICE said that certified stocks are now 45,898 bales, from 49,300 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 6720, 6290, and 6190 December. Support is at 6840, 6810, and 6780 December, with the resistance of 7000, 7030, and 7260 December.

FCOJ

General Comments: FCOJ was near unchanged once again last week. 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. 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 a little lower last week in New York and higher in London. London had been better supported due to stronger demand ideas and worries about the weather in Vietnam 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. 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 lower today at 1.148 million bags. The ICO daily average price is now 104.83 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 a little lower on weaker world petroleum prices. The markets now show a reversal in trends to down on the weekly charts. 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. The Indian government has not yet announced the subsidy for exporters of Sugar so no one knows how much to charge yet. 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. 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 down with objectives of 1370 and 1300 March. Support is at 1400, 1370, and 1330 March, and resistance is at 1440, 1470, and 1500 March. Trends in London are down with objectives of 382.00 and 368.00 March. Support is at 384.00, 381.00, and 378.00 March, and resistance is at 393.00, 396.00, and 398.00 March.

COCOA

General Comments: New York and London were lower on demand concerns caused by the return of the Coronavirus to Europe and the US. The weekly charts show that downtrends are established again. 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. 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 at the tail end of the presidential campaign season and some violence is 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 down with objectives of 2220 and 2160 December. Support is at 2240, 2170, and 2130 December, with resistance at 2330, 2370, and 2410 December. Trends in London are down with objectives of 1520 December. Support is at 1590, 1570, and 1540 December, with resistance at 1630, 1650, and 1670 December.