Softs Report - Wednesday, Nov. 4

COTTON

General Comments: Cotton closed higher on ideas that a Biden win would create new stimulus spending and that a Biden win would also result in improved China ties and that China could then buy more US Cotton. The return of the Coronavirus threatens demand potential for Cotton at home and around the world. The good news is that most Asian countries are noting a return of the virus to pandemic levels, but the bad news is that Europe and the US are and a lot of the Cotton that is exported to Asia gets sent back west as clothes. Heavy rains returned to the Southeast last week and Cotton could be hurt again. Hurricane Delta moved through the Delta and Southeast a couple of weeks ago and did some damage to Cotton. Open bolls were reported in both regions and Cotton fiber was discolored or else blown out of the bolls due to the rain and winds. The discolored Cotton is getting a chance to recover now as it has turned dry and the fiber can be naturally bleached by the Sun. Demand should stay generally weak as long as the Coronavirus is around.

Overnight News: The Delta and Southeast will get scattered showers. Temperatures should average near to above normal in the Delta and in the Southeast. Texas will have showers. Temperatures will average near to above normal. The USDA average price is now 65.67 ct/lb. ICE said that certified stocks are now 54,155 bales, from 51,079 bales yesterday.

Chart Trends: Trends in Cotton are down with objectives of 6720, 6290, and 6190 December. Support is at 6910, 6810, and 6780 December, with a resistance of 7930, 7260 and 7300 December.

FCOJ

General Comments: FCOJ was mostly a little lower as the coronavirus returned to pandemic status in the US and Europe. Florida has been spared any hurricanes or other serious storms this year in a year that has been very active for tropical storms. 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. Brazil has been too dry and irrigation is being used. Showers are falling in Brazil now. Mexican crop conditions are called good to very good with ample rains.

Overnight News: Florida should get dry conditions or isolated showers. Temperatures will average near normal. Brazil should get scattered showers and near to above normal temperatures. ICE said that 0 notices were posted for delivery against November contracts and that total delivery for the month are 0 contracts.

Chart Trends: Trends in FCOJ are mixed. Support is at 112.00, 110.00, and 108.00 January, with resistance at 116.00, 118.00, and 121.00 January.

COFFEE

General Comments: Futures were higher in New York and lower in London. New York was supported by the outside financial markets amid ideas of a Biden victory in the presidential elections. London had been better supported due to stronger demand ideas and worries about the weather in Vietnam as the country is getting too much rain now and flooding is being reported in the Central Highlands. The rains should continue for another week or more as a series of tropical systems appear headed for the country. The demand from coffee shops and other foodservice operations is still at very low levels as consumers are still drinking coffee at home. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. Brazil producers are selling due to the weakness in the Real. Ideas are that production is very strong this year as it is the on year for the trees. Central America is also offering right now and offers are increasing. The weather is good in Colombia and Peru.

Overnight News: ICE certified stocks are unchanged today at 1.152 million bags. The ICO daily average price is now 104.72 ct/lb. Brazil will get scattered showers and rains with above normal temperatures. Vietnam will see some big rains.

Chart Trends: Trends in New York are mixed to down with objectives of 99.00 and 94.00 December. Support is at 101.00, 98.00, and 95.00 December, and resistance is at 106.00, 108.00 and 109.00 December. Trends in London are mixed. Support is at 1320, 1310, and 1280 January, and resistance is at 1340, 1360, and 1380 January.

SUGAR

General Comments New York and London were lower on Coronavirus concerns. Coronavirus has returned to the US and Europe and has caused some demand concerns. Brazil mills have been producing more Sugar and less Ethanol due to weak world and domestic petroleum prices. About 45% of the crush this year will go to Sugar, from 35% last year. It has been dry lately to affect Sugarcane production and producers are less aggressive sellers. Rains are falling now to improve Sugarcane's growing conditions. India has a very big crop of Sugarcane this year but the exports have been hard to make. The Indian government has not yet announced the subsidy for exporters of Sugar so no one knows how much to charge yet. The government said today that it is not considering subsidies for exports this yea due to stable international prices. Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season. Rains are moving through the country now from Vietnam and the Pacific. The EU is having problems with its Sugarbeets crop due to weather and disease.

Overnight News: Brazil will get scattered showers. Temperatures should average above normal.

Chart Trends: Trends in New York are mixed. Support is at 1470, 1440, and 1400 March, and resistance is at 1500, 1550, and 1580 March. Trends in London are mixed. Support is at 397.00, 393.00, and 384.00 March, and resistance is at 406.00, 409.00, and 412.00 March.

COCOA

General Comments: New York and London were higher on the ideas that a Biden victory will create more stimulus spending and despite demand concerns caused by the return of the Coronavirus to Europe and the US. More stimulus spending would mean better demand for Chocolate. The weekly charts show that downtrends are established again. The harvest for the next main crop is almost done for much of West Africa and very strong production is expected. There are a lot of demand worries as the Coronavirus is making a comeback in the US. Europe is also seeing a return of the pandemic. The North American and European cocoa grinds were at least 4% lower than a year ago and the Asian cocoa grind was down 10% from last year. Ivory Coast at the tail end of the presidential campaign season and some violence is expected.

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 today and showers this weekend and near to above normal temperatures. ICE certified stocks are lower today at 3.422 million bags.

Chart Trends: Trends in New York are down with objectives of 2220 and 2160 December. Support is at 2240, 2170, and 2130 December, with resistance at 2330, 2370, and 2410 December. Trends in London are down with objectives of 1520 December. Support is at 1570, 1540, and 1510 December, with resistance at 1630, 1650, and 1670 December.