Softs Report - Thursday, Oct. 8

COTTON
General Comments: Cotton closed higher as another hurricane looks to impact the Delta and Southeast late this week and this weekend. Demand has improved over the last couple of weeks but the weekly export sales report showed just moderate demand last week. There was no major Chinese demand, but China and Turkey were the best buyers of US Cotton. 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. Another hurricane is forming that could bring some heavy rains and wind to the Southeast areas near the end of the week. Ideas are that most of the Cotton crops in the region escaped any major damage that the previous storms could have brought. This system is likely to do more damage as bolls are open and high winds and big rains could impact yields and quality.
Overnight News: The Delta will get mostly dry conditions until big rains are seen in the south on Friday and into the weekend, and Southeast will get scattered showers this weekend. Temperatures should trend to above normal in the Delta and in the Southeast. Texas will have mostly dry conditions. Temperatures will average near to above normal. The USDA average price is now 61.95 ct/lb. ICE said that certified stocks are now 19,789 bales, from 17,875 bales yesterday. ICE said that 0 notices were post4ee for delivery against October contracts and that total deliveries for the month are now 90 contracts. USDA said that net weekly Upland Cotton export sales were 178,400 bales this year and 15,000 balers next year. Net Pima sales were 21,700 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are up with objectives of 6800, 6860, and 6870 December. Support is at 6690, 6570, and 8520 December, with resistance of 6890, 7060 and 7090 December.

FCOJ
General Comments: FCOJ was a little lower after being much lower in early trading. Futures have no real reason to rally but can’t seem to break too much. Florida has been spared any hurricanes or other serious storms this year in a year that has been very active for tropical storms with a record amount of tropical storms hitting the US. There is a hurricane in the Gulf right now but it does not appear aimed at Florida. The lack of damaging weather usually means lower prices for futures. The Coronavirus is still promoting consumption of FCOJ at home. Restaurant and food service 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 to the US should be minimal as US prices remain below those of Europe. Brazil has been too dry and irrigation is being used.
Overnight News: Florida should get isolated showers. Temperatures will average near normal. Brazil should get dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 119.00 and 121.00 November. Support is at 111.00, 109.00, and 106.00 November, with resistance at 114.00, 117.00, and 119.00 November.

COFFEE
General Comments: Futures were higher in New York and lower in London on less selling by Brazil producers amid a stronger Real. London had been better supported due to stronger demand ideas and worries about the weather in Vietnam but the country is getting much rain now and the worries have abated and price trends are down. The demand from coffee shops and other food service 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. The Brazil harvest is over and producers are selling due to 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. The weather is a little dry in Peru but is mostly good in Colombia.
Overnight News: ICE certified stocks are lower today at 1.096 million bags. The ICO daily average price is now 106.54 ct/lb. Brazil will get mostly dry conditions this week and showers this weekend with above normal temperatures. Vietnam will see light to moderate showers.
Chart Trends: Trends in New York are mixed. Support is at 106.00, 105.00, and 103.00 December, and resistance is at 112.00, 115.00 and 119.00 December. Trends in London are mixed to down with no objectives. Support is at 1220, 1210, and 1180 November, and resistance is at 1280, 1320, and 1340 November.

SUGAR
General Comments: New York and London closed higher and both markets made new highs for the move. World petroleum prices are weaker. 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. India has a very big crop of Sugarcane this year but the Coronavirus has made exports hard. 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. There are reduced flows from rivers from China to hinder irrigation of the crops. 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 dry conditions. Temperatures should average above normal.
Chart Trends: Trends in New York are up with objectives of 1420 and 1460 March. Support is at 1370, 1330, and 1320 March, and resistance is at 1420, 1450, and 1490 March. Trends in London are up with objectives of 387.00 and 396.00 December. Support is at 380.00, 377.00, and 368.00 December, and resistance is at 389.00, 395.00, and 398.00 December.

COCOA
General Comments: New York and London closed a little higher in consolidation trading. Trends are still down in both markets. The harvest for the next main crop is spreading to much of West Africa and very strong production is expected. 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 also seeing a return of the pandemic. Ivory Coast is in the middle of the presidential campaign season and some violence s 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 and near to above normal temperatures. ICE certified stocks are higher today at 3.641 million bags.
Chart Trends: Trends in New York are down with objectives of 2400, 2360, and 2350 December. Support is at 2400, 2330, and 2300 December, with resistance at 2500, 2520, and 2540 December. Trends in London are down with objectives of 1680, 1670, and 1530 December. Support is at 1680, 1660, and 1620 December, with resistance at 1730, 1770, and 1810 December.