Softs Report - Thursday, July 2

COTTON
General Comments: Cotton closed higher on follow through as USDA reduced planted area estimates to about 12 million acres on Tuesday. Low prices and demand fears kept farmers out of the fields and off of the planters. USDA showed slightly improved crop conditions in its weekly updates this week. Current forecasts call for hot and dry weather for Texas this week so the conditions are likely to go down next week. The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks. However, some states and countries are sliding backwards and could impose new restrictions soon. The situation remains hard to figure out. 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. The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth.
Overnight News: The Delta will get isolated showers and Southeast will get scattered showers. Temperatures should be near to above normal. Texas will have isolated showers. Temperatures will average near to above normal. The USDA average price is now 58.94 ct/lb. ICE said that certified stocks are now 40,640 bales, from 38,410 bales yesterday. ICE said that 0 notices were posted for delivery against July futures and that total deliveries for the month are now 307 contracts. USDA said that net Upland Cotton export sales were 67,300 bales this year and 246,200 bales next year. Net Pima sale were 4,700 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are up with no objectives. Support is at 6110, 6030, and 6010 December, with resistance of 6370, 6510, and 6580 December.

FCOJ
General Comments: FCOJ was mostly a little higher, but July was lower. Demand from grocery stores has remained strong in response to the increased consumer demand. The Coronavirus is making a comeback in the US and more lockdowns are possible. Inventories in cold storage remain solid so there will be FCOJ to meet the demand. There is increasing concern about the food service demand not improving even with the partial opening of the states. The weather in Florida is currently good for the crops. The tree condition is called good. The Valencia harvest is almost over. Brazil has been dry and irrigation has been used. Shipping from Brazil is more problematic due to the massive outbreak of the Coronavirus there.
Overnight News: Florida should get isolated showers. Temperatures will average near to above normal. Brazil should get dry conditions and near to below normal temperatures. ICE said that 0 notices were posted for delivery against July futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 130.00 and 136.00 September. Support is at 125.00, 123.00, and 121.00 September, with resistance at 129.00, 143.00, and 135.00 September.

COFFEE
General Comments: Futures were higher and trends are turning up in both markets. The lack of offer from Brazil has keyed the recent price action. The Brazil harvest is active but shipping and collection have become very difficult due to the widespread outbreak of the Coronavirus there. Ideas are that production will be 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. Vietnam also had hot and dry weather at flowering time and production ideas there are less than original expectations of a bumper crop. The demand from coffee shops and other food service operations is improving but 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. The logistics of moving Coffee from Central and South America remain difficult. Shipping logistics have improved somewhat, but many are still having trouble getting the Coffee to ports to move to consumer nations.
Overnight News: ICE certified stocks are higher today at 1.653 million bags. The ICO daily average price is now 102.44 ct/lb. Brazil will get dry conditions with near normal temperatures. Vietnam will see light to moderate showers. ICE said that 0 contracts were delivered against ICE July futures contracts and that total deliveries for the month are now 1,211 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 104.00 and 111.00 September. Support is at 100.00, 97.00, and 95.00 September, and resistance is at 10.00, 106.00 and 108.00 September. Trends in London are mixed to up with objectives of 1240 and 1290 September. Support is at 1190, 1160, and 1150 September, and resistance is at 1220, 1240, and 1250 September.

SUGAR
General Comments: New York and London closed higher. Ideas are that there is plenty of Sugar for the world market, but getting the Sugar moved is becoming increasingly difficult with the widespread Coronavirus outbreak in both Brazil and India. Brazil mills are currently producing about 48% Sugar from the cane crush, from about 33% a year ago. The overall crush rate is below year-ago levels. 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 lock downs. 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 dry conditions. Temperatures should average near normal. ICE said that 4,993 contracts were posted for delivery against July futures.
Chart Trends: Trends in New York are mixed. Support is at 1170, 1140, and 1120 October, and resistance is at 1230, 1240, and 1260 October. Trends in London are mixed. Support is at 352.00, 344.00, and 338.00 October, and resistance is at 360.00, 366.00, and 370.00 October.

COCOA
General Comments: New York and London closed lower and trends are down in both markets. There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US. The main crop harvest is now over in West Africa and the results so far are very good. However, the Midcrop could be less due to dry weather earlier in the season. There have been some showers in West Africa in recent days. Arrivals are on a pace about the same as last year. 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 higher today at 4.150 million bags. ICE said that 18 delivery notices were posted against July contracts and that total deliveries for the month are now 436 contracts.
Overnight News:
Chart Trends: Trends in New York are down with objectives of 2110 September. Support is at 2090, 2060, and 2030 September, with resistance at 2210, 2250, and 2320 September. Trends in London are down with objectives of 1560 and 1460 September. Support is at 1570, 1540, and 1510 September, with resistance at 1660, 1700, and 1720 September.