Softs Report - Monday, August 1

General Comments: Cotton was higher last week and trends are trying to turn up in this market but so far the trends remain sideways. 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. The USDA crop condition rating were a little lower again this week with the biggest problems still found in Texas. Conditions in Georgia and the rest of the Southeast and Delta appear to be mostly good to excellent. The Chinese had been reopening the economy and country lately as Covid faded, but some reports of a new variant found there could shut the country down again in the near term. The quarantine is one week now instead of one month as before. The cities of Shanghai, Shenzhen, and Wuhan are all subject to lockdowns of one type or another. 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. Current weather forecasts call for hot and dry conditions for much of the Great Plains including west Texas Cotton area.
Overnight News: The Delta will get isolated showers and above normal temperatures and Southeast will get scattered showers and near to above normal temperatures. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 107.77 ct/lb. ICE said that certified stocks are now 5,813 bales, from 8,277 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 109.00 and 125.90 December. Support is at 94.80, 92.10, and 88.80 December, with resistance of 98.50, 100.80 and 103.20 December.

field of cotton trees

Photo by Trisha Downing on Unsplash

General Comments: FCOJ was higher last week and trends are up on the daily and weekly charts. A price recovery has started as the harvest winds down. The recent market weakness has been dramatic since the market made new contract highs earlier this month. The weather remains generally good for production around the world for the next crop. Brazil has some rain and conditions are rated good. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are up with no objectives. Support is at 168.00, 165.00, and 162.00 September, with resistance at 175.00, 179.00, and 181.00 September.

General Comments: New York and London were higher last week on renewed fund and other speculator buying interest. Some speculative long liquidation was noted late in the week before the end of the month. Trends are mixed on the daily charts in both markets. Certified stocks keep dropping but GCA stocks are holding strong. Demand for Coffee overall is thought to be less but the cash market remains strong. There is less Coffee on offer from origin, with Brazil offering less and Central America and Vietnam offering less as well. The weather in Brazil is good for Coffee production and any harvest activities. Temperatures are above normal in Brazil and conditions are mostly dry. The dry weather is raising some concerns about the next crop potential but it is normally dry at this time of year.
Overnight News: ICE certified stocks are unchanged today at 0.700 million bags. The ICO daily average price is now 192.36 ct/lb. Brazil will get mostly dry conditions with 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 237.00 and 248.00 September. Support is at 212.00, 210.00, and 203.00 September, and resistance is at 226.00, 228.00 and 231.00 September. Trends in London are mixed to up with objectives of 2050, 2110, and 2900 September. Support is at 3010, 1980, and 1940 September, and resistance is at 2060, 2090, and 2110 September.

General Comments: New York and London closed a little lower last week on what appeared to be speculative selling based on production data from Unica in Brazil. Unica estimated the Sugar production at about 2.97 million tons, above trade estimates near 2.84 million. Sugarcane crushed totaled 46.34 million tons. The selling in these markets has been relentless for the last week to 10 days. The New York market is worried that the lack of clarity about ethanol demand in Brazil will force mills down there to produce more Sugar for export. The London market had been looking for increased supplies from origin and now is more worried about demand after recent price strength. Trends are down in New York and in London. Brazil is reported to have a big crop of Sugarcane coming and as it is harvesting its crop of Sugarcane and turning much of it into Ethanol but is still making some Sugar and some of that Sugar is making it into export channels. The production mix could change in the short term to include more Sugar. Reports from India indicated that conditions are generally good for Sugar production. Monsoon rains have been good in India this year.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average above normal. India will get isolated showers in eastern areas and near to above normal temperatures.
Chart Trends: Trends in New York are down with objectives of 1720 and 1660 October. Support is at 1710, 1680, and 1650 October and resistance is at 1770, 1820, and 1850 October. Trends in London are mixed to down with no objectives. Support is at 508.00, 501.00, and 493.00 October and resistance is at 519.00, 526.00, and 537.00 October.

General Comments: New York and London were a little lower last week. Supplies of Cocoa are as large as they will be now for the rest of the marketing year but the market is trying to hold the recent lows. Trends are turning up in both markets. Reports of sun and dry weather 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 for the year. The weather is good for harvest activities in West Africa but the harvest should be winding down now. Current reports from Ivory Coast indicate that the weather is a good mix of sun and rain. The weather is good in Southeast Asia. Ivory Coast arrivals are now estimated at 2.013 million tons for the current marketing year, down 4.1% from the previous year.
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 higher today at 5.537 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2290, 2240, and 2200 September, with resistance at 2380, 2410, and 2420 September. Trends in London are mixed. Support is at 1690, 1680, and 1650 September, with resistance at 1740, 1770, and 1780 September.

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