Softs Report - Thursday, Oct. 29

COTTON

General Comments: Cotton closed lower on trading tied to the higher US Dollar and sharply lower stock market indexes. Heavy rains are returning to the Southeast this week and Cotton could be hurt again as a new hurricane is approaching the Louisiana coast. 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 with big storms possible as the hurricane comes onshore today. Temperatures should average near to above normal in the Delta and in the Southeast. Texas will have showers and snow. Temperatures will average near to above normal. The USDA average price is now 67.00 ct/lb. ICE said that certified stocks are now 44,471 bales, from 40,728 bales yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 7000, 6920, and 6810 December, with the resistance of 7260, 7730, and 7330 December.

FCOJ

General Comments: FCOJ was a little higher in the front months and a little lower in the deferred months. Traders were rolling positions out of November and into January or later months. Florida has been spared any hurricanes or other serious storms this year in a year that has been very active for tropical storms. The next tropical system will also miss the state as it moves into the central Gulf coast and then into Mississippi, Louisiana, and Alabama. 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. Showers are falling in Brazil now to help production and tree condition. Mexican crop conditions are called good to very good with ample rains.

Overnight News: Florida should get isolated 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 114.00, 110.00, and 109.00 November, with resistance at 119.00, 121.00, and 126.00 November.

COFFEE

General Comments: Futures were lower in both markets on speculative selling caused by investor worries about the US elections next week and the sharply higher US Dollar. London was better supported due to stronger demand ideas and worries about the weather in Vietnam. The country is getting too much rain now and flooding is being reported in the Central Highlands. The rains should continue for at least another week as there are two more tropical systems taking aim at the country. 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 higher today at 1.146 million bags. The ICO daily average price is now 105.51 ct/lb. Brazil will get scattered showers and rains with above normal temperatures. Vietnam will see light to moderate showers.

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 up with objectives of 1350, 1360, and 1420 November. Support is at 1280, 1250, and 1230 November, and resistance is at 1340, 1370, and 1380 November.

SUGAR

General Comments: New York and London were generally lower, with only NY March closing a little higher. Part of the action in London featured traders rolling out of December positions and into March. Rains are falling now in Brazil 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. Ideas are that the government will allow big exports, but with small subsidies. 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 so the next crop can be improved. The EU is having problems with its Sugarbeets crop due to weather and disease. 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. 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 mixed to up with objectives of 1510 and 1580 March. Support is at 1460, 1420, and 1410 March, and resistance is at 1520, 1550, and 1580 March. Trends in London are mixed. Support is at 390.00, 388.00, and 380.00 December, and resistance is at 404.00, 409.00, and 412.00 December.

COCOA

General Comments: New York and London were lower on demand concerns caused by the Coronavirus outbreak that seems to be surging again in the US and in the EU. The US elections next week and the surging US Dollar were also negative for the market. The harvest for the next main crop is spreading through 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 is in the middle of the presidential campaign season and some violences 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 higher today at 3.650 million bags.

Chart Trends: Trends in New York are mixed to down with objectives of 2290 and 2160 December. Support is at 2370, 2300, and 2240 December, with resistance at 2410, 2430, and 2470 December. Trends in London are mixed to down with objectives of 1520 December. Support is at 1620, 1590, and 1570 December, with resistance at 1640, 1690, and 1720 December.