Softs Report - Tueasday, June 23

COTTON
General Comments: Cotton closed higher as bad growing conditions continued in West Texas. USDA showed the deteriorating crop conditions in its weekly updates last night. Signs of an improving economy in the US and around the world really helped ideas of better Cotton demand as did reports of a lot of masks being made for use during the Coronavirus epidemic. 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 are sliding backwards and could impose new restrictions soon. 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. Demand will slowly improve but the industry should have plenty of supplies to work within the short term. The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth. However, it has been very hot and dry in West Texas, and crops there are suffering.
Overnight News: The Delta will get scattered showers and Southeast will get scattered showers. Temperatures should be near to below normal. Texas will have scattered showers. Temperatures will average near to below normal. The USDA average price is now 56.74 ct/lb. ICE said that certified stocks are now 36,145 bales, from 33,313 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 6670 and 6870 July Support is at 6090, 5980, and 5870 July, with resistance of 6340, 6360, and 6480 July.

FCOJ
General Comments: FCOJ was higher on chart-based buying. Florida production is now estimated at less than 68 million boxes. Support is coming from the continued effects from the Coronavirus that are keeping people at home and drinking Orange Juice. 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 foodservice demand not improving even with the partial opening of the states. The weather in Florida is currently good for the crops. Southern areas are cooler and have seen more frequent showers. The tree condition is called good. The Valencia harvest is almost over. Brazil has been dry and irrigation has been used.
Overnight News: Florida should get periods of showers for much of the week. Temperatures will average near to below normal. Brazil should get dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 117.00, 115.00, and 112.00 July, with resistance at 122.00, 125.00, and 129.00 July.

COFFEE
General Comments: Futures were lower in both New York and higher in London as the Brazil harvest is underway and starting to expand. 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. The Brazilian Real was lower against the US Dollar. 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 foodservice operations is improving but is still at very low levels. Consumers are still drinking coffee at home, but many smaller roasters are actively trying to unload green coffee already bought a there are only a few outlets for sales at this time. The logistics of moving Coffee from Central and South America remain difficult. Producers have had trouble getting workers to pick the cherries and mills and processors have had trouble getting workers to staff the plants. Shipping logistics have improved somewhat, but many are still having trouble getting the Coffee to ports to move to consumer nations. Indonesian producers are more active sellers.
Overnight News: ICE certified stocks are higher today at 1.667 million bags. The ICO daily average price is now 98.80 ct/lb. Brazil will get dry conditions with above normal temperatures. Vietnam will see light to moderate showers. Ice Said that 476 contracts were delivered against ICE July futures contracts and that total deliveries for the month are now 674 contracts.
Chart Trends: Trends in New York are mixed. Support is at 95.00, 92.00, and 89.00 September, and resistance is at 99.00, 101.00, and 102.00 September. Trends in London are mixed. Support is at 1180, 1150, and 1130 September, and resistance is at 1210, 1240, and 1270 September.

SUGAR
General Comments: New York and London closed lower in nearby months despite stronger petroleum prices and in part due to a weaker Brazilian Real. The Brazil mills are trying to cover the lack of White Sugar in the market but might switch back to producing ethanol soon if prices continue to improve for the ethanol. 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. Reports indicate that little is on offer from India in part due to logistical and harvest problems caused by the Coronavirus. 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. 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 a dry week. Temperatures should average above normal.
Chart Trends: Trends in New York are mixed. Support is at 1170, 1130, and 1120 October, and resistance is at 1240, 1260, and 1290 October. Trends in London are down with objectives of 355.00, 324.00, and 308.00 August. Support is at 360.00, 352.00, and 342.00 August, and resistance is at 375.00, 384.00, and 394.00 August.

COCOA
General Comments: New York and London closed higher. New York is showing a double top on the charts at about 2300 July but found little in the way of follow-through selling last week. It rebounded yesterday after holding some support on the charts. London has been the weaker market but also held chart support. There are a lot of demand worries as the Coronavirus is not going away and could be making a comeback in the US. Harvest is now over for the main crop in West Africa and the results so far are very good. The reports from West Africa imply that a big harvest in the region. However, the Midcrop could be less due to dry weather earlier in the season. 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 above normal temperatures. ICE certified stocks are lower today at 4.195 million bags. ICE said that 85 delivery notices were posted against July contracts and that total deliveries for the month are now 367 contracts.
Overnight News:
Chart Trends: Trends in New York are mixed. Support is at 2200, 2170, and 2140 September, with resistance at 2290, 2320, and 2360 September. Trends in London are mixed to down with no objectives. Support is at 1660, 1630, and 1600 September, with resistance at 1710, 1750, and 1770 September.