Softs Report - Friday, Dec. 18

COTTON
General Comments: Cotton closed sharply higher once again on follow-through buying tied to the USDA reports and increased export demand. USDA surprised the market on Thursday when it released its monthly supply and demand reports. The reports showed a significant drop in production of US Cotton and much reduced US ending stocks levels. The reports were bullish and a move to the upper end of the 70 cents range is possible. Harvest is wrapping up amid drier weather conditions in West Texas and the Delta and Southeast. The weekly export sales report showed very strong demand again yesterday. Export demand has held strong despite stay at home orders and weaker economies around the world. Traders now hope for even more demand later as the vaccines are given out and the world economies start to recover.
Overnight News: The Delta and Southeast will get mostly dry conditions except for some showers on Friday in the Delta and Saturday in the Southeast. Temperatures should average near to below normal in the Delta and in the Southeast but will turn to near to above normal in the Delta over the weekend. Texas will have mostly dry conditions except for some isolat4ed showers on Friday and near to above normal temperatures. The USDA average price is now 72.90 ct/lb. ICE said that certified stocks are now 78,031 bales, from 79,352 bales yesterday. ICE said that 0 notices were posted for delivery against December contracts and that total deliveries for the month are now 354 contracts.
Chart Trends: Trends in Cotton are up with objectives of 7490, 7740, and 7930 March. Support is at 7600, 7550, and 7460 March, with resistance of 7740, 7770 and 7800 March.

FCOJ
General Comments: FCOJ was lower in range trading. The big Florida production estimate for oranges is still hanging on the market price action. Florida was spared from hurricanes or other serious storms this year in a year that has been very active for tropical storms. The Coronavirus is still promoting consumption of FCOJ at home, but this could change soon as vaccines become available. Restaurant and food service demand has been much less as no one is dining out. The weather in Florida is good with some showers to promote good tree health and fruit formation. Brazil has been too dry. Showers are falling in Brazil now and these need to continue to ensure good tree health. Mexican crop conditions are called good with rains.
Overnight News: Florida should get mostly dry conditions. Temperatures will average below normal. Brazil should get scattered showers and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 112.00 and 110.00 January. Support is at 113.00, 110.00, and 100.00 January, with resistance at 118.00, 120.00, and 122.00 January.

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