Softs Report - Monday, Aug. 16

General Comments: Futures were higher last week, with much of the buying in response to the USDA reports. Actual US production and ending stocks estimates were far less than trade expectations and the reason for the rally. Prices can continue to climb in coming days. Showers are falling in Texas and throughout the major growing areas of the south. Ideas of strong demand continue but the weekly reports have shown more like an average demand. The demand is expected to be strong from Asian countries as world economies recover from Covid lockdowns. Analysts say the demand is still very strong and likely to hold at high levels for the future. However, the expansion of the Delta variant has given pause to the better demand ideas due to fears of economies here and around the world starting to partially lock down again. Production ideas are being impacted in just about all areas due to the weather extremes. It has been very hot in parts of Texas and the Delta and Southeast have had drenching rains at various times in the last couple of months.
Overnight News: The Delta will get isolated showers and above normal temperatures and Southeast will get isolated to scattered showers and near to above normal temperatures. Texas will have isolated showers and near to above normal temperatures. The USDA average price is now 91.32 ct/lb. ICE said that certified stocks are now 83,639 bales, from 85,932 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 9680 December. Support is at 9240, 9100, and 9030 December, with resistance of 9480, 9540 and 9600 December.

Image by Jeser Andrade Arango from Pixabay

General Comments: FCOJ closed higher Friday but a little lower for the week as Florida weather remains non-threatening and the cold weather has passed in Brazil. Freezing temperatures have been reported in Sao Paulo in the last couple of weeks. Weather conditions in Florida are rated mostly good for the crops. The Atlantic is more active and a system is threatening western parts of the state this weekend. Some Orange groves reported excessive rain from this event but little if any wind damage. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. Northeastern Mexico areas are too dry, but the rest of northern and western Mexico are rated in good condition. Demand news has been bad with Nielsen reporting a third month of declining sales. The sales are now the weakest since the Pandemic began and are likely to head lower as the world and the US emerge from the pandemic.
Overnight News: Florida should get scattered showers with big rains this weekend. Temperatures will average near to above normal. Brazil should get mostly dry conditions and below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 131.00, 128.00, and 126.00 September, with resistance at 139.00, 142.00, and 144.00 September.

General Comments: New York and London closed higher last week on the adverse weather for Brazil Arabica Coffee areas. Prices have stayed firm as the current Brazil harvest starts to wind down. The freeze threat in Brazil has passed but the damage has been done. The government in Brazil estimates that 11% of the Coffee areas were affected. Temperatures are warmer with near to above normal readings expected. It is flowering time for the next crop and the flowers were frozen and will drop off the trees. It is also harvest time and the crop is now 89% harvested. The current outlook calls for 10 days of dry weather which will not support the flowering either. Improved showers are now in the forecast for Southeast Asia. Little demand is showing for Vietnamese Coffee as containers to ship the Coffee are hard to find. Good conditions are reported in northern South America and good conditions reported in Central America. Colombia is having trouble exporting Coffee due to protests inside the country. Conditions are reported to be generally good in parts of Africa, but Ivory Coast and Ghana have been a little dry.
Overnight News: ICE certified stocks are higher today at 2.161 million bags. The ICO daily average price is now 163.22 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are mixed to up with objectives of 191.00 September. Support is at 180.00, 177.00, and 173.00 September, and resistance is at 187.00, 195.00 and 200.00 September. Trends in London are up with objectives of 1880 and 1960 September. Support is at 1800, 1770, and 1730 September, and resistance is at 1880, 1920, and 1950 September.

General Comments: New York and London were higher again as the temperatures have moderated in Brazil. Chart trends are up in both markets. The freeze and drought damage is there and UNICA last week noted less second half July production because of all the damage that the cane crops have sustained. Ideas are now that the Brazil processing and exporting season will end very early due to the freezes. Ideas are that the damage from previous freezes and drought episodes should show up in processing data for August as well. London has been the weaker market but has firmed a bit lately with the problems in Brazil and trends in this market could now be turning up. There is plenty of White Sugar available in India for the market and monsoon rains are promoting good conditions for the next crop. Thailand is expecting improved production. Ethanol demand is returning to the market as more world economies open up after the pandemic, but renewed Ethanol demand is now in doubt with weaker Crude Oil futures and covid pandemic fears as the Delta variant spreads.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are up with objectives of 2010 and 2050 October. Support is at 1960, 1930, and 1880 October, and resistance is at 2030, 2060, and 2090 October. Trends in London are up with objectives of 509.00 October. Support is at 479.00, 477.00, and 470.00 October, and resistance is at 492.00, 498.00, and 504.00 October.

General Comments: New York and London closed higher last week and trends remain up in both markets. London was the stronger market. Ivory Coast has forward sold 1.4 million tons of beans and has stopped selling for the next crop on fears of less supplies. The grind data was released recently and showed a strong recovery from the Covid times. World economies are starting to reopen after Covid and the open economies are giving demand the boost. Ports in West Africa are filled with Cocoa right now. The weather has had below to rains in West Africa and crop conditions are rated good. Ivory Coast arrivals are now 2.11 million tons, up 4.8% from last year. Ivory Coast processed 452,000 tons of beans by the end of July, down 3.6% from last year.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be above normal. Malaysia and Indonesia should see showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 5.638 million bags.
Chart Trends: Trends in New York are up with objectives of 2580 September. Support is at 2500, 2450, and 2420 September, with resistance at 2590, 2620, and 2650 September. Trends in London are up with objectives of 1720 September. Support is at 1680, 1660, and 1630 September, with resistance at 1710, 1730, and 1750 September.

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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