Softs Report - Wednesday, July 15

Cotton

General Comments: Cotton closed lower despite bad growing conditions continuing in West Texas and as farmers planted less than expected area to Cotton at 12 million acres. It was a demanding market, and the demand for US Cotton has been poor. It is not likely to get any better as the US has announced it will not start Phase 2 negotiations with the Chinese. \Signs of an improving economy in the US and around the world really helped ideas of better Cotton demand. 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, economic improvement in the US was thrown into doubt as Coronavirus cases surged higher in states that had reopened. 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 isolated showers and Southeast will get isolated showers. Temperatures should be near to above normal. Texas will have isolated showers. Temperatures will average near to above normal. The USDA average price is now 59.61 ct/lb. ICE said that certified stocks are now 25,582 bales, from 38,157 bales yesterday. ICE said that 0 notices were posted for delivery against July futures and that total delivery for the month are now 436 contracts.

Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 6320, 6250, and 6110 December, with a resistance of 6490, 6510, and 6580 December.

FCOJ

General Comments: FCOJ was a little higher. Florida production is now estimated at 67 million boxes, unchanged from last month. The Florida Movement and Pack report showed slightly lower ending stocks for the month. California and US production was increased. Support is coming from the continued effects of the Coronavirus that are keeping people at home and drinking Orange Juice. Demand from grocery stores has remained strong in response to increased consumer demand. 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. The harvest is increasingly active in Brazil.

Overnight News: Florida should get isolated showers. Temperatures will average near to above normal. Brazil should get dry conditions and near to below normal temperatures. ICE said that 0 notices were posted for delivery against July futures and that total delivery for the month is now 0 contracts.

Chart Trends: Trends in FCOJ are mixed to up with no objectives. Support is at 125.00, 123.00, and 121.00 September, with resistance at 129.00, 132.00, and 135.00 September.

Coffee

General Comments: Futures were higher in New York and higher in London. London broke out to the upside on the daily charts. The Coronavirus has returned to the US to kill demand hopes. Europe is in much better shape battling the virus. The Brazil harvest is active but shipping and collection have become very difficult due to the widespread outbreak of the Coronavirus there. Even so, the pickers are showing up for work. 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. 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 still at very low levels. Consumers are still drinking coffee at home and the return of the Coronavirus outbreak will keep things that way.

Overnight News: ICE certified stocks are unchanged today at 1.621 million bags. The ICO daily average price is now 99.09 ct/lb. Brazil will get dry conditions or isolated showers with near to above normal temperatures. Vietnam will see light to moderate showers. ICE said that 0 contracts were delivered against ICE July futures contracts and that total delivery for the month are now 1,303 contracts.

Chart Trends: Trends in New York are mixed. Support is at 97.00, 95.00, and 92.00 September, and resistance is at 103.00, 105.00, and 106.00 September. Trends in London are mixed. Support is at 1210, 1180, and 1150 September, and resistance is at 1230, 1260, and 1300 September.

Sugar

General Comments: New York and London closed lower on reports of an active Brazil shipping program for Sugar and ideas of good supplies for the world market. Getting the Sugar moved is becoming more difficult with the widespread Coronavirus outbreak in both Brazil and India. Brazil mills have shifted part of the crush to Sugar production due to less ethanol demand. 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 also have less this year due to reduced planted area and erratic rains during the monsoon season.

Overnight News: Brazil will get dry conditions or isolated showers. Temperatures should average near normal.

Chart Trends: Trends in New York are mixed to down with objectives of 1120 and 1050 October. Support is at 1140, 1120, and 1100 October, and resistance is at 1230, 1240, and 1260 October. Trends in London are mixed to down with objectives of 327.00 October. Support is at 338.00, 336.00, and 330.00 October, and resistance is at 350.00, 357.00, and 360.00 October.

Cocoa

General Comments: New York a closed higher London closed a little lower. It was a currency-related trade yesterday with the US Dollar the weaker currency. 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 in much better shape in battling the virus. 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 at 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 near to above normal temperatures. ICE certified stocks are higher today at 4.112 million bags. ICE said that 0 delivery notices were posted against July contracts and that total delivery for the month is now 441 contracts.

Chart Trends: Trends in New York are mixed. Support is at 2090, 2060, and 2030 September, with resistance at 2220, 2310, and 2360 September. Trends in London are mixed. Support is at 1540, 1510, and 1480 September, with resistance at 1600, 1660, and 1700 September.