Softs Report - Monday, Sept. 21

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 and export demand was very strong last week. Demand should stay weak as long as the Coronavirus is around. Shopping is hard to do and many people are still unemployed. This is true in just about all countries. Hurricane Sally moved into the Southeast and brought some heavy rains. Ideas are that most of the Cotton crops in the region escaped any major damage that the storm could have brought. The supply losses are in the market now. However, the Harvest is still 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 scattered showers and the Southeast will get scattered showers. Temperatures should be near to above normal. Texas will have scattered showers. Temperatures will average below normal. The USDA average price is now 60.05 ct/lb. ICE said that certified stocks are now 6,987 bales, from 6,108 bales yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 6430, 6340, and 6320 December, with the resistance of 6600, 6680, and 6720 December.

FCOJ

General Comments: FCOJ was lower. No hurricanes have hit Florida yet. The systems have all gone south into the Gulf of Mexico or north into the Carolinas. It seems hard to believe that Florida has been spared as this year has been very active for tropical storms with a record amount of tropical storms hitting the US. The lack of damaging weather 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 near to above normal. Brazil should get dry conditions this week and isolated showers this weekend and near to above 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 to up with objectives of 119.00, 121.00, and 133.00 November. Support is at 115.00, 114.00, and 112.00 November, with resistance at 121.00, 126.00, and 129.00 November.

 

COFFEE

General Comments: Futures were lower last week in New York and in London. New York is close to support areas near 109.70 on the weekly charts. London has been better supported due to stronger demand ideas. The demand from coffee shops and other foodservice operations is still at very low levels. Consumers are still drinking coffee at home. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. Vietnam was dry during the flowering time and is now getting rains. Production ideas are lower. The Brazil harvest is over. Ideas are that production is very strong this year as it is the on 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 1.109 million bags. The ICO daily average price is now 110.89 ct/lb. Brazil will get mostly dry conditions this week and isolated showers this weekend with near to above normal temperatures. Vietnam will see light to moderate showers. ICE said that 44 notices were posted for delivery against September futures and that total delivery for the month are now 604 contracts.

Chart Trends: Trends in New York are down with objectives of 113.00 December. Support is at 113.00, 112.00, and 109.00 December, and resistance is at 120.00, 124.00 and 128.00 December. Trends in London are down with objectives of 1340 and 1330 November. Support is at 1340, 1310, and 1280 November, and resistance is at 1400, 1420, and 1440 November.
5.1% 2.8%

SUGAR

General Comments: New York and London were higher on speculative and fund related buying. Much of the buying came to New York, with London following. Brazil mills have been producing more Sugar and less Ethanol due to a weak world and domestic petroleum prices, but that might be changing. Petroleum prices have rallied lately so mills could now be producing less Sugar and more Ethanol. 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 this week and isolated showers this weekend. Temperatures should average near to above normal.

Chart Trends: Trends in New York are up with objectives of 1340 March. Support is at 1300, 1280, and 1260 March, and resistance is at 1340, 1360, and 1280 March. Trends in London are up with objectives of 381.00 December. Support is at 369.00, 365.00, and 360.00 December, and resistance is at 372.00, 382.00, and 389.00 December.

COCOA

General Comments: New York and London closed higher. London was the stronger market last week and trends turned up for the London market. New York held to sideways trends as futures were only able to match previous highs for the move. The current crop features strong production but there are worries about the next crop. The harvest for the next main crop just started in southeast Nigeria and will spread to the rest of West Africa in the coming weeks. 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 3.669 million bags. ICE said that 0 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. Support is at 2580, 2520, and 2500 December, with resistance at 2650, 2710, and 2730 December. Trends in London are up with objectives of 1940 December. Support is at 1830, 1790, and 1760 December, with resistance at 1930, 1940, and 1970 December.