Softs Report - Tuesday, Sept. 8

COTTON

General Comments: Cotton closed a little lower for the week and trends are sideways on the weekly charts. Demand has improved over the last couple of weeks but remains at depressed levels. The export sales report showed better sales to China but not that much beyond that. Demand should stay a week as long as the Coronavirus is a feature of life around the world. Shopping is hard to do and many people are still unemployed. This is especially true for the US but it is true to some degree in just about all countries. The supply losses are in the market now. However, the Harvest is still way down the road and the tropical season is active. There will be more chances to inflict more damage on the crops to help try to rally prices.

Overnight News: The Delta will get mostly dry conditions and the Southeast will get isolated showers. Temperatures should be near to above normal. Texas will have mostly dry conditions. Temperatures will average near to above normal. The USDA average price is now 58.83 ct/lb. ICE said that certified stocks are now 5,913 bales, from 6,465 bales yesterday.

Chart Trends: Trends in Cotton are mixed to down with objectives of 6290 and 6100 December. Support is at 6390, 6370, and 6330 December, with the resistance of 6550, 6600, and 6640 December.

FCOJ

General Comments: FCOJ was higher. The daily and weekly charts show that trends are starting to turn up. No hurricanes have hit Florida yet. The systems have all gone south into the Gulf of Mexico or north into the Carolinas. That usually means lower prices for futures but prices are already relatively cheap. 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. 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 showers. Temperatures will average above normal. Brazil should get dry conditions and near-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 up with objectives of 123.00 and 128.00 November. Support is at 118.00, 116.00, and 115.00 November, with resistance at 122.00, 126.00, and 129.00 November.

COFFEE

General Comments: New York and London closed little changed in consolidation trading. London has been the leader on the rally as demand for Robusta has improved with people staying at home. It is now trying to form a bull flag. Chart trends are still up in New York. Vietnam was dry during the flowering time and is dry again. Production ideas are lower. Demand remains down. The demand from coffee shops and other foodservice operations 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. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. Europe is emerging from lockdowns. The Brazil harvest is almost over but shipping has become difficult due to the widespread outbreak of the Coronavirus there. Even so, the ports are operating normally. Ideas are that production will be very strong this year as it is one year for the trees. The strong production ideas are coming despite hot and dry weather seen in the country at flowering time. Bloomberg reports that Brazil producers are getting ready to flood the New York market with Coffee that they hope will find its way into certified stocks.

Overnight News: ICE certified stocks are lower today at 1.180 million bags. The ICO daily average price is now 124.49 ct/lb. Brazil will get mostly dry conditions with above normal temperatures. Vietnam will see light to moderate showers. ICE said that 0 notices were posted for delivery against September futures and that total delivery for the month are now 447 contracts.

Chart Trends: Trends in New York are up with objectives of 135.00 and 138.00 December. Support is at 132.00, 129.00, and 127.00 December, and resistance is at 135.00, 138.00, and 142.00 December. Trends in London are mixed to up with objectives of 1490 November. Support is at 1430, 1400, and 1380 November, and resistance is at 1470, 1480, and 1490 November.

SUGAR

General Comments: New York and London were both lower on speculative and fund related selling. Chart trends are down in both markets. The ISO said on Wednesday that Sugar supply and demand were in balance for this crop year but a supply deficit is possible next year. The ISO news for the current year appeared to be enough to start to turn trends down. CONAB noted in its most recent report that Brazilian mills are producing more Sugar and less Ethanol this year due to reduced Ethanol demand. Ideas are that there is plenty of Sugar for the world market. 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 the irrigation of the crops.

Overnight News: Brazil will get dry conditions. Temperatures should average above normal.

Chart Trends: Trends in New York are down with objectives of 1260 March. Support is at 1260, 1240, and 1220 March, and resistance is at 1310, 1320, and 1350 March. Trends in London are down with objectives of 353.00 December. Support is at 352.00, 347.00, and 345.00 December, and resistance is at 364.00, 367.00, and 369.00 December.

COCOA

General Comments: New York and London closed lower in correction trading. The charts show that both markets turned trends up last week but are giving back gains now. The current crop features strong production but there are worries about the next crop. Nigerian traders told the wire services that the Nigerian rainfall has started and that crop conditions are much improved. 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 consumers are reluctant to buy. 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 3.765 million bags. ICE said that 0 notices were posted for delivery today against September futures and that total delivery for the month are now 853 contracts.

Chart Trends: Trends in New York are down with objectives of 2540, 2450, and 2380 December. Support is at 2530, 2500, and 2470 December, with resistance at 2650, 2710, and 2730 December. Trends in London are mixed to up with objectives of 1850 December. Support is at 1760, 1730, and 1700 December, with resistance at 1830, 1850, and 1880 December.