Softs Report - Friday, Oct. 21

General Comments: Cotton was mixed yesterday as the harvest expands and traders worry about demand now and in the future. Nearby months closed slightly lower and deferred months closed slightly higher. Traders are worried about a global recession and demand in that recession and also about Chinese demand due to the lockdowns there. Production is very short. The harvest is appearing in the market, and the market has responded to it with sideways to lower prices. The trade is still worried about demand moving forward due to recession fears and Chinese lockdowns but is also worried about total US production potential. It is possible that the continued Chinese lockdowns will continue to hurt demand for imported Cotton for that country and that a weaker economy in the west will hurt demand from the rest of the world.
Overnight News: The Delta and Southeast will get mostly dry conditions or isolated showers and below normal temperatures. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 79.15 ct/lb. ICE said that certified stocks are now 880 bales, from 880 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 72.80, 72.00, and 63.80 December. Support is at 76.60, 75.40, and 74.20 December, with resistance of 83.00, 85.80 and 89.80 December.

cottons on white surface

Photo by Marianne Krohn on Unsplash

General Comments: FCOJ was a little higher and is holding firm on supply-side fundamentals. USDA estimated Florida production at 28 million boxes, down 32% from last year and a dramatic drop in production potential. Early and mid production dropped 40% while Valencia production was 25% lower. These estimates could be lower in coming production reports. 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 storm. Brazil has some rain and conditions are rated good. More showers are in the forecast for the coming days. Florida damage is expected to be very big, with many trees lost as well as fruit lost. Mexican areas are showing mixed trends, with dry weather in some northern areas but better weather to the south. Florida Citrus Mutual said that FCOJ inventories are now 46% below a year ago.
Overnight News: Florida should get moistly dry conditions. Temperatures will average near to below normal. Brazil should get scattered showers and near to above normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 234.00 November. Support is at 205.00, 202.00, and 200.00 November, with resistance at 213.00, 216.00, and 219.00 November.

General Comments: New York closed a little lower and London closed higher yesterday in response to reports of improving growing conditions and increasing availability of Coffee in Brazil. The US Dollar was about 0.3 cents lower yesterday and was not really a factor for the buyers or sellers. Trends are down on the daily and weekly charts for both markets. There is still a threat for a third year of La Nina which could negatively affect Coffee production again next year but so far the crop conditions are called good so producers are selling. Some beneficial precipitation was reported in Brazil last week. More showers and rains are in the forecast in Brazil Coffee areas for this week. Vietnam has also been dry and wire reports from there indicate that production losses are likely, but scattered showers are now part of the forecast for Coffee areas. The cash market remains strong for Arabica and the demand for certified stocks from the exchange remains a price positive factor.
Overnight News: ICE certified stocks are unchanged today at 0.392 million bags. The ICO daily average price is now 171.53 ct/lb. Brazil will get scattered showers with near normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are down with objectives of 180.00 December. Support is at 186.00, 183.00, and 180.00 December, and resistance is at 192.00, 196.00 and 200.00 December. Trends in London are down with no objectives. Support is at 2010, 1980, and 1950 November, and resistance is at 2080, 2100, and 2150 November.

General Comments: New York and London closed lower again yesterday on more ideas that supplies of White Sugar would soon be increasing for the market. Crude Oil was higher. Ethanol demand has been soft but ideas are that it can increase with higher Crude Oil futures. The New York market had been worried that reduced ethanol demand due to taxing policies in Brazil will force mills down there to continue to produce more Sugar for export and the Brazilian president has lowered the fuel taxes in Brazil, and this is squeezing the profit margins of the mills. The mills could produce much more Sugar over time due to the tax changes but so far have not produced enough to meet the demand as it has been raining in southern Brazil and the harvest is a little delayed. The London market had been looking for increased White Sugar supplies from origin as EU production was reduced by a hot and dry Summer. Indian exporters are still waiting for a government announcement on its export policy before offering much to the market. This announcement is expected within a week now. India has had a very good production year and estimated Sugar production is now at 36.5 million tons with 9.0 million tons available for export.
Overnight News: Brazil will get scattered showers. Temperatures should average near to above normal. India will get scattered showers in the east and near to below normal temperatures.
Chart Trends: Trends in New York are mixed to down with objectives of 1790, 1730, and 1710 March. Support is at 1830, 1790, and 1760 March and resistance is at 1880, 1890, and 1920 March. Trends in London are down with objectives of 513.00, 510.00, and 485.00 December. Support is at 523.00, 520.00, and 510.00 December and resistance is at 533.00, 541.00, and 557.00 December.

General Comments: New York and London closed higher, with New York a little stronger before the release of the North America grind data in the afternoon. Good production and questionable demand remain. 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. Ideas are still that good production is expected from West Africa as a whole for the year. The weather is good in West Africa. The weather is good in Southeast Asia.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near normal temperatures. ICE certified stocks are much lower today at 5.465 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2250 December. Support is at 23120, 2280, and 2240 December, with resistance at 2350, 2370 and 2420 December. Trends in London are mixed. Support is at 1940, 1900, and 1880 December, with resistance at 1960, 2000, and 2020 December.

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Softs Report - Wednesday, Oct. 19
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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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