Softs Report - Thursday, Sept. 24

COTTON
General Comments: Cotton closed a little lower on the stronger US Dollar and as the harvest shows signs of progressing. Cotton was also weaker as the Coronavirus was making a comeback in Europe. Governments there are locking down again so stores will be closing. US Cotton demand depends largely on exports so the higher US Dollar was negative for US Cotton futures. Demand has improved over the last couple of weeks and export demand was very strong last week. Demand should stay generally 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. The harvest is increasingly active and the tropical season is active. There will be fewer chances to inflict more damage on the crops to help try to rally prices.
Overnight News: The Delta will get moderate rain through Thursday, then dry conditions and Southeast will get scattered showers into the weekend. Temperatures should be near to above normal. Texas will have mostly dry conditions. Temperatures will trend to above normal. The USDA average price is now 59.64 ct/lb. ICE said that certified stocks are now 8,339 bales, from 7,466 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 6470, 6340, and 6320 December, with resistance of 6620, 6680 and 6720 December.

FCOJ
General Comments: FCOJ was lower once again on the higher US Dollar and the good growing conditions seen in Florida so far this year. 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. 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. Some showers are in the region now to help in Sao Paulo.
Overnight News: Florida should get scattered to isolated showers. Temperatures will average near to above normal. Brazil should get dry conditions 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 down with objectives of 104.00 November. Support is at 106.00, 100.00, and 97.00 November, with resistance at 113.00, 117.00, and 119.00 November.

COFFEE
General Comments: Futures were slightly lower yesterday in New York and mostly a little higher in London. Both markets are showing oversold conditions on the daily charts, but both do not show any reasons to rally at this time. 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. Vietnam was dry during 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. CONAB said that the production could be the second-highest on record at over 61 million bags. Brazil is reportedly offering Coffee at very cheap prices to attract sales.
Overnight News: ICE certified stocks are lower today at 1.104 million bags. The ICO daily average price is now 109.76 ct/lb. Brazil will get mostly dry conditions this week with near to above normal temperatures. Vietnam will see light to moderate showers.
Chart Trends: Trends in New York are down with no objectives. Support is at 109.00, 107.00, and 105.00 December, and resistance is at 115.00, 119.00 and 120.00 December. Trends in London are down with objectives of 1230 November. Support is at 1320, 1310, and 1280 November, and resistance is at 1360, 1380, and 1400 November.

SUGAR
General Comments: New York and London were lower on a stronger US Dollar and as world petroleum prices were mostly steady at lower levels. Brazil mills have been producing more Sugar and less Ethanol due to weak world and domestic petroleum prices, but that might be changing as petroleum prices start to firm up. 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 irrigation of the crops.
Overnight News: Brazil will get dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1380 and 1420 March. Support is at 1310, 1300, and 1280 March, and resistance is at 1360, 1380, and 1410 March. Trends in London are mixed to up with objectives of 381.00 December. Support is at 366.00, 360.00, and 353.00 December, and resistance is at 376.00, 382.00, and 389.00 December.

COCOA
General Comments: New York and London closed higher. 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 is in fact coming back and consumers are reluctant to buy. Ideas are that Southeast Asia also has good crops.
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 slightly higher today at 3.671 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2480, 2430, and 2360 December. Support is at 2530, 2500, and 2470 December, with resistance at 2610, 2650, and 2670 December. Trends in London are mixed. Support is at 1830, 1790, and 1760 December, with resistance at 1880, 1930, and 1940 December.