Softs Report - Monday, Sept. 14

COTTON

General Comments: Cotton closed a little lower for the week and trends are still sideways on the weekly charts. Demand has improved over the last couple of weeks but remains at depressed levels. The export sales report showed better sales to China but not that much beyond that. Demand should stay a week as long as the Coronavirus is a feature of life around the world. Shopping is hard to do and many people are still unemployed. This is especially true for the US but it is true to some degree in just about all countries. US ending stocks were estimated at 7.2 million bales but came on the back of the lower production as export and domestic demand were trimmed. USDA estimated US Cotton production at just 127.06 million bales on Friday. Production was in line with trade expectations and below the 18 million produced last year. The supply losses are in the market now. However, the Harvest is still a way down the road and the tropical season is active. There will be more chances to inflict more damage on the crops to help try to rally prices.

Overnight News: The Delta will get mostly dry conditions and the Southeast will get isolated showers. Temperatures should be near to above normal. Texas will have scattered showers. Temperatures will average below normal. The USDA average price is now 58.77 ct/lb. ICE said that certified stocks are now 5,913 bales, from 5,913 bales yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 6340, 6230, and 6200 December, with the resistance of 6550, 6600, and 6640 December.

FCOJ

General Comments: FCOJ was lower. The daily and weekly charts show that trends are starting to turn down again. USDA left its Florida production estimate unchanged at 67.7 million boxes. This was about as expected by the trade. No hurricanes have hit Florida yet. The systems have all gone south into the Gulf of Mexico or north into the Carolinas. That usually means lower prices for futures but prices are already relatively cheap. 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 for 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. ICE said that 0 notices were posted against September contracts for delivery and that deliveries for the month are now 273 contracts.

Chart Trends: Trends in FCOJ are mixed. Support is at 114.00, 113.00, and 110.00 November, with resistance at 118.00, 121.00, and 126.00 November.

COFFEE

General Comments: Futures were lower last week in New York and in London. New York hit a wall of selling at the 135.00 area basis December futures. London has been the leader on the recent rally as demand for Robusta has improved with people staying at home. The demand from coffee shops and other foodservice operations is still at very low levels. Consumers are still drinking coffee at home and the return of the Coronavirus outbreak will keep things that way. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. Vietnam was dry during the flowering time and is dry again. Production ideas are lower. The Brazil harvest is almost over but shipping has become difficult due to the widespread outbreak of the Coronavirus there. Even so, the ports are operating normally. Ideas are that production will be very strong this year as it is one year for the trees. The strong production ideas are coming despite hot and dry weather seen in the country at flowering time.

Overnight News: ICE certified stocks are lower today at 1.117 million bags. The ICO daily average price is now 123.36 ct/lb. Brazil will get mostly dry conditions with above normal temperatures. Vietnam will see light to moderate showers. ICE said that 0 notices were posted for delivery against September futures and that total delivery for the month is now 450 contracts.

Chart Trends: Trends in New York are mixed. Support is at 127.00, 123.00, and 121.00 December, and resistance is at 135.00, 137.00, and 138.00 December. Trends in London are mixed to down with objectives of 1380 and 1330 November. Support is at 1400, 1380, and 1370 November, and resistance is at 1440, 1470, and 1480 November.

SUGAR

General Comments: New York closed slightly lower and London was higher on speculative and fund related buying seen in London. Chart trends are down in both markets. UNICA noted less production of ethanol and Sugar from cane in its latest report and said that bad weather kept farmers out of the fields. Ethanol demand is down, anyway, so mills there are producing more Sugar in the mix.. Ideas are that there is plenty of Sugar for the world market. 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 due to Coronavirus lockdowns. 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 above normal.

Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 1240, 1230, and 1220 March, and resistance is at 1290, 1300, and 1310 March. Trends in London are mixed to down with objectives of 353.00 December. Support is at 351.00, 347.00, and 345.00 December, and resistance is at 360.00, 364.00, and 367.00 December.

COCOA

General Comments: New York and London closed lower in correction trading. It was a rather narrow range week for both markets. The charts show that both markets are in sideways trends. The current crop features strong production but there are worries about the next crop. Nigerian traders told the wire services that the Nigerian rainfall has started and that crop conditions are much improved. 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 3.723 million bags. ICE said that 68 notices were posted for delivery today against September futures and that total delivery for the month are now 965 contracts.

Chart Trends: Trends in New York are mixed to down with objectives of 2450, 2380, and 2320 December. Support is at 2520, 2500, and 2470 December, with resistance at 2590, 2650, and 2710 December. Trends in London are mixed to down with objectives of 1740, 1690, and 1630 December. Support is at 1760, 1730, and 1700 December, with resistance at 1830, 1850, and 1880 December.