Softs Report - Monday, Feb. 7

COTTON        

General Comments: Cotton futures were lower on Friday but higher for the week as demand was strong once again. The weekly USDA sales report showed very strong sales. The US Dollar was weaker and kept export demand ideas strong but fears that the Fed might do something soon to rein in inflation kept selling interest around.  It’s been a demand market and futures have been correcting lower over the last few sessions in search of new demand.  Ideas are that demand remains strong for US Cotton even with the weaker export sales reports over the last couple of weeks.  Analysts say the Asian demand is still very strong and likely hold at high levels for the future.  US consumer demand has been very strong as well despite higher prices and inflation.  Good US production is expected for next year as planted area is expected to increase due to high cotton prices and the expense of planting Corn.  Chart trends are still mostly up in this market.

Overnight News:  The Delta will get scattered showers and near-normal temperatures.  The Southeast should get mostly dry conditions and above normal temperatures.  Texas will have mostly dry conditions and below normal temperatures.  The USDA average price is now 123.69 ct/lb.  ICE said that certified stocks are now 617 bales, from 617 bales yesterday.

Chart Trends:  Trends in Cotton are mixed to up with objectives of 13140 March.  Support is at 12480, 12210, and 12080 March, with resistance of 12960, 13080 and 13200 March.

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FCOJ 

General Comments:  FCOJ was lower last week on moderate weather forecasts. Freezing temperatures reported last weekend did little to hurt the crops.  Temperatures in Florida are still below normal, but much warmer than last weekend. The trends are down on the daily charts.  Brazil has some rain and conditions are rated very good.  Brazil production was down last year due to dry conditions at flowering time and then a freeze just before harvest.  Mexico is rated in good condition.

Overnight News:  Florida should get mostly dry conditions.  Temperatures will average below normal.   Brazil should get scattered showers and near to above normal temperatures.

Chart Trends:  Trends in FCOJ are down with objectives of 133.00 March.  Support is at 137.00, 135.00, and 133.00 March, with resistance at 143.00, 149.00, and 150.00 March.

COFFEE   

General Comments:  New York and London closed higher last week as Brazil producers are slow to export and as certified stocks on the New York exchange keep dropping.  Ideas continue that the next crop in Brazil is experiencing good growing conditions.  Vietnamese producers have been selling and Brazil producers have sold some coffee for the next crop.  The dry weather and then the freeze in Brazil have created a lot of problems for the trees to form cherries this year.  Big rains more recently in some Brazil growing areas have hurt cherry formation as well.  The logistical situation in both Vietnam and Brazil has eased in recent weeks but is still considered difficult and expensive to manage.  Brazil producers have sold most of the current year crop and are forward pricing for next year.  Vietnam producers are also selling and some of the Robusta is going to the exchange in London as differentials have weakened.  Vietnam is getting scattered showers on the coast but dry conditions inland.  The rest of Southeast Asia should get scattered showers in the islands and mostly dry conditions on the mainland.  Production conditions for the next crop in Colombia are not good due to too much rain.  Brazil exported 178,093 tons of Coffee in January, from 221,966 tons last year.

Overnight News: ICE-certified stocks are lower today at 1.133 million bags.  The ICO daily average price is now 208.15 ct/lb.  Brazil will get scattered showers with near-normal temperatures.  Central America will get mostly dry conditions.  Vietnam will see scattered showers near the coast and mostly dry conditions inland.

Chart Trends:  Trends in New York are mixed to up with objectives of 245.00 and 256.00 March.  Support is at 240.00, 235.00, and 230.00 March, and resistance is at 244.00, 246.00, and 252.00 March.  Trends in London are up with objectives of 2250 and 2290 March.   Support is at 2200, 2160, and 2140 March, and resistance is at 2250, 2270, and 2300 March[JS1].

SUGAR                 

General Comments:  New York and London were higher on Friday and a little higher for the week as the US Dollar moved lower.  Crude Oil futures were higher and ethanol data for the US showed very big supplies.  The US Dollar moved lower last week.  There have been reports of improved growing conditions for the crops in central-south areas of Brazil.  Showers will continue into much of this week and crops should benefit from the return of moisture to the region.  Hot and dry weather is expected for southern areas after the rains pass this week.  Ideas are that the supplies are available from India and Thailand as harvests there are off to a good start but it will take a stronger price to get them into the market.  India has produced 18.7 million tons of Sugar so far this marketing year, up 5.6% from last year.

Overnight News:  Brazil will get scattered showers.  Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed to down with no objectives.  Support is at 1750, 1740, and 1710 May and resistance is at 1820, 1860, and 1900 May.  Trends in London are mixed to down with no objectives.  Support is at 472.00, 466.00, and 460.00 May and resistance is at 485.00, 490.00, and 493.00 May.

COCOA                                                                                   

General Comments:  Both markets closed higher last week on what was called speculative buying.  The weather is generally good for West Africa and Southeast Asia but some producers in West Africa are worried about the dry weather that has been noted for the last couple of weeks.  Ideas are that demand will continue to improve and production in West Africa appears to be good this year.  Both Ivory Coast and Ghana are reporting improved weather as it is now mostly sunny with some scattered showers around.  Some farmers want more rain for the best Spring harvest results.  Ivory Coast arrivals are now estimated at 1.340 million tons for the marketing year., up 1.5% from last year.

Overnight News:  Mostly dry conditions are forecast for West Africa.  Temperatures will be near to above normal.  Malaysia and Indonesia should see showers.  Temperatures should average above normal.  Brazil will get scattered showers and near normal temperatures.  ICE certified stocks are higher today at 4.630 million bags.

Chart Trends:  Trends in New York are up with no objectives.  Support is at 2590, 2530, and 2500 March, with resistance at 2690, 2700, and 2770 March.  Trends in London are up with objectives of 1770 March.  Support is at 1740, 1700, and 1680 March, with resistance at 1790, 1810, and 1830 March.

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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