Softs Report - Wednesday, April 1

COTTON
General Comments Cotton was a little higher in spite of the USDA perspective plantings estimate. USDA estimated Cotton planted area at 13.7 million acres, about unchanged from last year. Many doubt that much Cotton will get planted now because of price, but the headline number was big and had to be respected. Much of the selling was related to lost demand potential due to the Coronavirus and the extremely weak petroleum prices. The Coronavirus has closed malls across America and stores are not selling clothes. Clothes for the US market made in Asia are not being ordered. Chinese buyers might need less Cotton now as factories inside their country were closed for an extended holiday. All are reopen now, but the manufacturing pace has been slow. China has also been slow to buy products from Southeast Asia and demand for US Cotton has been hurt in the entire region. The weakness in Petroleum futures comes from the moves by Saudi Arabia to ramp up production just at the time when the world economy is slowing down. The threat of a worldwide recession is very real.
Overnight News: The Delta and Southeast should see scattered showers today and Friday. Temperatures should be variable. Texas will have mostly dry conditions this week and a few showers over the weekend. Temperatures will average mostly above normal. The USDA average price is now 45.95 ct/lb. ICE said that certified stocks are now 28,446 bales, from 28,446 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 4700 and 4380 May. Support is at 4880, 4840, and 4780 May, with resistance of 5250, 5420 and 5490 May.

FCOJ
General Comments: FCOJ was higher on demand considerations here in the US. Industry sources suggest that demand has improved as consumers are returning to FCOJ due to the Coronavirus. Many have been stockpiling juice. Grocery stores in many areas have sold out and need to restock. The increased demand has really turned the market around. The early and mid crop harvest is about over and the Valencia harvest is increasing. Good growing conditions and increased oranges production estimates by USDA this season have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no severe storms so far this year. Many areas have been dry lately and irrigation is being used. Reports indicate that new crop fruit is progressing well.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get isolated showers and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to up with no objectives. Support is at 117.00, 115.00, and 113.00 May, with resistance at 122.00, 124.00, and 127.00 May.

COFFEE
General Comments: Futures were higher in New York and low in London as the logistics of shipping Coffee from anywhere in Latin America remain difficult at best. Demand in consumer countries has increased due to stockpiling by consumers because of the Coronavirus. Containers are bottled up in China and are increasingly hard to find for shipping in most Coffee exporter countries. The chart trends are down in New York and mixed in London due to big production ideas. Rains were reported in Brazil Coffee areas over the weekend and showers are continuing through this week. It is dry in other parts of Latin America. Central America has had less than normal rains, especially in Honduras. The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low.
Overnight News: ICE certified stocks are lower today at 1.979 million bags. The ICO daily average price is now 110.75 ct/lb. Brazil will get isolated showers with near-normal temperatures. Vietnam will see mostly dry conditions in the south and some light to moderate showers in the north.
Chart Trends: Trends in New York are down with objectives of 116.00 and 108.00 May. Support is at 116.00, 110.00, and 107.00 May, and resistance is at 124.00, 131.00 and 135.00 May. Trends in London are mixed to down with no objectives. Support is at 1160, 1150, and 1130 May, and resistance is at 1220, 1250, and 1270 May.

SUGAR
General Comments: New York and London both closed mostly lower, with some deferred months in New York closing higher. The next harvest is about to start in Brazil, and major processors and sellers of ethanol announced force majeure in Brazil earlier this week due to the lack of driving caused by the Coronavirus there. The recently weaker petroleum futures make higher-priced ethanol that much more expensive to blend and cuts demand. That makes more Sugarcane available for processing into Sugar. The Brazil mills are trying to cover the lack of White Sugar in the market. Reports indicate that little is on offer from India. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season.
Overnight News: Brazil will get isolated showers. Temperatures should average near normal.
Chart Trends: Trends in New York are down with objectives of 990 May. Support is at 1030, 1000, and 970 May, and resistance is at 1080, 1130, and 1170 May. Trends in London are mixed to up with objectives of 364.00 and 384.00 May. Support is at 349.00, 344.00, and 332.00 May, and resistance is at 361.00, 364.00, and 369.00 May.

COCOA
General Comments: New York and London closed lower. London has been the weaker market as the British Pound has been relatively strong against the US Dollar and the Euro. Harvest is now over for the main crop in West Africa and the results so far are very good. Ideas are that demand is less than before due to the Coronavirus problems in Europe. The reports from West Africa imply that a big harvest in the region. The weather in Ivory Coast is good. The weather is too dry in Ghana and Nigeria and there are fears that the mid crop is not developing well at this time.
Overnight News: Isolated to scattered showers are forecast for West Africa. Temperatures will be above 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 3.973 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2190, 2160, and 2130 May, with resistance at 2310, 2360, and 2400 May. Trends in London are mixed. Support is at 1740, 1710, and 1680 May, with resistance at 1800, 1840, and 1890 May.