Softs Report - Friday, Dec. 23

COTTON
General Comments: Cotton was sharply lower to limit down yesterday on news of negative export sales in the weekly USDA report. Some ideas that demand could soon increase as China could start to open its economy in the next couple of months were hurt by cancellations made in the weekly reportx. Covid is now widespread in the country so the beneficial economic effects of the opening could be delayed. The people there do not trust the government vaccines. Demand has not been real strong so far this year and the weekly export sales report last week was bad once again. Demand has not improved with the reduction in prices and a lower US Dollar to date. Production in the US is very short.
Overnight News: The Delta will get mostly dry conditions and near normal temperatures. The Southeast will see isolated showers and near to below normal temperatures. Texas will have mostly dry conditions and near normal temperatures. The USDA average price is now 84.37 ct/lb. ICE said that certified stocks are now 8,901 bales, from 8,901 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 83.30, 79.80, and 78.80 March, with resistance of 87.40, 89.60 and 89.90 March.

white flower field during daytime

Photo by Jeff Hutcheson on Unsplash

FCOJ
General Comments: FCOJ was lower yesterday on long liquidation even with worries still around about freeze damage to crops this weekend from freezing temperatures and despite weakening demand ideas as domestic demand could be less with the holidays and end of the year coming very soon. Ideas are that much of the bullish news is now in the market and the market seems to be in a sideways range. The supply situation in the US and in the world market looks very tight. Historically low estimates of production due in part to the hurricanes and in part to the greening disease has hurt production remain in place but are apparently part of the price structure now. The weather remains generally good for production around the world for the next crop but not for production areas in Florida that have been impacted in a big way by the two storms. Brazil has some rain and conditions are rated good. Mostly dry conditions are in the forecast for the coming days. Florida Citrus said that FCOJ inventories are now 43.5% below last year.
Overnight News: Florida should get scattered showers. Temperatures will average above normal. Brazil should get scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 206.00, 202.00, and 198.00 January, with resistance at 214.00, 216.00, and 219.00 January.

COFFEE
General Comments: New York closed higher again yesterday as producers are quiet right now in Vietnam and most of Latin America. London closed a little lower in January and March on a lack of demand but the back months closed a little higher. Buying interest is also reduced, but the lack of offer has motivated the market to move higher. The Brazilian Real has been firming against the US Dollar and that has hurt offers from Brazil. Ideas of reduced Brazil production and reports of reduced offers into the cash market from Brazil and Vietnam continue, but the weather is good in Brazil and improving in Vietnam. There are ideas that production potential for Brazil had been overrated and reports of too much rain in Vietnam affecting the harvest progress. The weather in Brazil is currently very good for production potential but worse conditions seen earlier in the growing cycle hurt the overall production prospects as did bad weather last year. Ideas are that the market will have more than enough Coffee when the next harvest comes in a few months.
Overnight News: ICE certified stocks are higher today at 0.788 million bags. The ICO daily average price is now 160.10 ct/lb. Brazil will get isolated showers in northern areas with near to below normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE said that 44 contracts were tendered for delivery against December futures and that total deliveries for the month are now 1,718 contracts.
Chart Trends: Trends in New York are mixed. Support is at 163.00, 181.00, and 157.00 March, and resistance is at 171.00, 174.00 and 177.00 March. Trends in London are mixed. Support is at 1950, 1930, and 1910 January, and resistance is at 1990, 2060, and 2100 January.

SUGAR
General Comments: New York and London closed higher again yesterday with the biggest moves in the top step March contract for both markets once again yesterday in part on what seems to be strong demand against tight nearby supplies. The harvest has been delayed in Thailand. Australia and Central America harvests are also delayed. India is producing White Sugar mostly from Raws imported from Brazil, so the market is thought to be short Raw Sugar. Pakistan has lifted its ban on Sugar exports and now will allow up to 100,000 tons to be sold. The weather in Brazil remains good for the next crop but bad for harvest and loading at ports as it is still raining in production areas. World Sugar is expected to be in a big surplus production next year. The supply is starting to increase. Brazil Sugar offers are increasing on ideas of unprofitable Ethanol prices coming to the country and reports of increased use of Corn for Ethanol production
Overnight News: Brazil will get scattered showers. Temperatures should average near tpo below normal. India will get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in New York are up with objectives of 2160 March. Support is at 2030, 1980, and 1950 March and resistance is at 2100, 2130, and 2160 March. Trends in London are up with objectives of 572.00 and 602.00 March. Support is at 564.00, 553.00, and 550.00 March and resistance is at 576.00, 582.00, and 588.00 March.

COCOA
General Comments: New York and London closed higher again yesterday. New York made new highs for the move. Ivory Coast arrivals appear to have improved lately with the recent rally in futures prices. Ivory coast arrivals are now 954,000 tons, up 10% from last year. Good production is reported and traders are worried about the world economy moving forward and how that could affect demand. Supplies of Cocoa are as large as they will be now for the rest of the marketing year. Reports of scattered showers along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. Nigeria is reporting that Harmattan winds have arrived but no significant effects are reported for now. The weather is good in Southeast Asia.
Overnight News: Scattered showers are forecast for West Africa. Temperatures will be near to above normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 5.163 mi0lion bags.
Chart Trends: Trends in New York are up with objectives of 2700 and 2860 March. Support is at 2570, 2520, and 2490 March, with resistance at 2630, 2650, and 2700 March. Trends in London are up with objectives of 2160 March. Support is at 2000, 1980, and 1960 March, with resistance at 2060, 2090, and 2120 March.


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Disclaimer: A Subsidiary of Price Holdings, Inc. – a Diversified Financial Services Firm. Member NIBA, NFA Past results are not necessarily indicative of future results. Investing in ...

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