Softs Report - Friday, September 15

shallow focus photography of coffee beans in sack

Photo by Tina Guina on Unsplash

Cotton

General Comments: Cotton closed higher yesterday in range trading and despite a poor weekly export sales report. The USDA reports released on Tuesday showed reduced production and ending stocks estimates. Weak demand is still a problem and export demand was trimmed in the supply and demand reports. Ideas are around that Chinese economic data implies less US cotton demand for the coming year but demand from other buyers has been good. There is more talk of a contraction that could develop in China and Cotton demand could be hurt if people have less money to spend on clothes. Ideas of weaker demand due to economic problems in Asia continue and Chinese economic data continues to show weakness. There are still many concerns about demand from China and the rest of Asia due to the slow economic return of China in the world market.

Overnight News: The Delta will get isolated showers and above normal temperatures. The Southeast will see isolated showers and near to above normal temperatures. Texas will have scattered showers and near to above normal temperatures. The USDA average price is now 82.49 ct/lb. ICE daily certified stocks are now 5,312 bales, from 5,112 bales yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 86.60, 85.20, and 84.90 December, with resistance of 88.60, 89.00 and 90.80 December.

 

FCOJ

General Comments: FCOJ closed higher yesterday in response to the USDA reports released on Tuesday that showed production in Florida near unchanged levels at 15.8 million boxes, from 15.7 million last month. Traders are also wary about selling futures due to the hurricane season that could bring a storm to damage crops in Florida again. Hurricane Lee was the latest storm, but the track now keeps it away from the southeast US. Another storm is forming in the Atlantic now to bring more risk to the start. Reports of short supplies in Florida and Brazil are around. CitrusBR last week estimated stocks were estimated at 84,745 tons for last season. This was the lowest estimate since 2012 when data collection started and stocks were estimated below 100,000 tons. Production for next year is expected to drop a bit due to weather concerns. Futures remain supported by very short Oranges production estimates for Florida. Futures are also being supported in forecasts for an above average hurricane season that could bring a storm to damage the trees once again. Historically low estimates of production due in part to the hurricanes and in part to the greening disease that have hurt production, but conditions are significantly better now with scattered showers and moderate temperatures. The weather remains generally good for products around the world for the next crop including production areas in Florida that have been impacted in a big way by the two storms seen previously in the state

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

Chart Trends: Trends in FCOJ are mixed to up with objectives of 356.00 and 382.00 November. Support is at 322.00, 311.00, and 305.00 November, with resistance at 335.00, 338.00, and 341.00 November.

 

Coffee

General Comments: New York and London closed higher yesterday as demand for Robusta improved along with a lack of offers from Asia, mostly from Vietnam but also Indonesia. There is not all that much going on in the market that could affect Arabica prices, although demand for cheaper and lower quality Arabica is increasing due to the price differentials with Robusta. Offers from Brazil and other countries in Latin America should be increasing but prices are considered a little cheap to create much selling interest from producers. The Brazil harvest moving quickly and this fact has pressured prices. Vietnam is not offering much Coffee into the world market as domestic cash prices are very high. There are still tight Robusta supplies for the market amid strong demand for Robusta with no offers from Vietnam in the world market due to very high domestic prices.

Overnight News: ICE certified stocks are unchanged today at 0.442 million bags. The ICO daily average price is now 154.44 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Central America will get mostly dry conditions. Vietnam will see scattered showers. ICE NY said that 26 contracts were tendered for delivery against September futures and that total deliveries for the month are now 1,301 contracts.

Chart Trends: Trends in New York are mixed. Support is at 147.00, 145.03, and 142.00 December, and resistance is at 158.00, 160.00 and 163.00 December. Trends in London are mixed. Support is at 2460, 2430, and 2390 November, with resistance at 2520, 2570, and 2600 November.

 

Sugar

General Comments: Both markets closed higher yesterday in correction trading as the market continues to see stressful conditions in Asian production areas to keep chart trends mostly up. The Asian supply situation is more pronounced this week with dry weather the main feature, but Brazil is exporting. Traders are worried about the lack of Sugar exports from India. The Indian monsoon is expected to withdraw early this year and leave Sugarcane high and dry. Many growing areas have been dry, anyway. There are also worries about the Thai and Indian production potential for this year of El Nino. Reports of offers from Brazil are still around but other origins are still not offering, and demand is still strong. Brazil reports very good harvest conditions but the weather in Southeast Asia is currently dry. Indian production is less this year and Pakistan also has reduced production and the monsoon has been uneven so far in both countries. Thailand production is also down a lot this year and many Asian countries are worried about El Nino impacting future production.

Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to below normal. India will get mostly dry conditions and below normal temperatures.

Chart Trends: Trends in New York are mixed to up with objectives of 2770 March. Support is at 2670, 2620, and 2600 March and resistance is at 2750, 2770, and 2800 March. Trends in London are mixed to up with objectives of 770.00 December. Support is at 721.00, 703,00, and 693.00 December, with resistance at 740.00, 744.00, and 750.00 December.

 

Cocoa

General Comments: New York and London closed mostly higher yesterday and at new highs for the move as the supply and demand situation remains bullish. Reports of diseases in West Africa that are hurting production continue. The diseases are from too much rain falling at this time. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue, Talk is that hot and dry conditions reported earlier in Ivory Coast could curtail main crop production, and main crop production ideas are not strong. Midcrop production ideas are lower now with diseases reported in the trees due to too much rain that could also affect the main crop production.

Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average near normal. Brazil will get isolated showers and near to above normal temperatures. ICE certified stocks are lower today at 5.080 million bags. ICE NY said that 0 notices were posted for delivery against September futures and that total deliveries for the month are now 992 contracts.

Chart Trends: Trends in New York are up with objectives of 3780 and 3900 December. Support is at 3640, 3570, and 3550 December, with resistance at 3770, 3800, and 3840 December. Trends in London are up with no objectives. Support is at 3020, 2990, and 2900 December, with resistance at 3110, 3140, and 3170 December.


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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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