Softs Report - Monday, September 27

By Jack Scoville of The PRICE Futures Group

Monday, September 27, 2021 1:56 PM EST

person holding dried beans

COTTON

General Comments: Futures were higher on Friday in response to a stronger US Dollar and a strong weekly export sales report. The weekly charts imply that significantly higher prices are coming soon. Demand or US Cotton remains very strong and that is good news for sellers as the strong demand implies strong prices should continue. 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 lockdown again. Those fears were magnified yesterday by the debt crisis here and the Evergrande crisis in China. 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. Bolls are opening now so any new system to git the Southeast would have a much better chance to damage the fiber. Good US production totals are expected.

Overnight News: The Delta and Southeast will get mostly dry conditions and temperatures trending from below normal to above normal. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 92.85 ct/lb. ICE said that certified stocks are now 57,659 bales, from 60,107 bales yesterday. ICE said that 0 notices were posted for delivery against October contracts and that total deliveries for the month are now 115 contracts.

Chart Trends: Trends in Cotton are mixed. Support is at 9400, 9300, and 9200 December, with resistance of 9670, 9800 and 9920 December.

FCOJ

General Comments: FCOJ closed lower on Friday and a little lower for the week after trading both sides of unchanged as weather concerns, especially for Brazil but also for Florida and Mexico, remained important. A freeze hit Sao Paulo state several weeks ago and reports of significant losses are being heard. Weather conditions in Florida are rated mostly good for the crops with scattered showers and near-normal temperatures. 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. Florida is in the middle of the hurricane season but the storms have missed the state so far and crop conditions are good.

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

Chart Trends: Trends in FCOJ are mixed. Support is at 134.00, 130.00, and 128.00 November, with resistance at 142.00, 146.00, and 149.00 November.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of September 21, 2021
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
FRZN CONCENTRATED ORANGE JUICE – ICE FUTURES U.S. (CONTRACTS OF 15,000 POUNDS) :
CFTC Code #040701 Open Interest is 13,386 :
: Positions :
: 2,909 10,653 1,323 97 0 3,571 0 99 1,407 590 1,299 :
: Changes from: September 14, 2021 :
: -27 -56 14 -1 0 -60 0 0 -32 -30 -148 :
: Percent of Open Interest Represented by Each Category of Trader :
: 21.7 79.6 9.9 0.7 0.0 26.7 0.0 0.7 10.5 4.4 9.7 :
: Number of Traders in Each Category Total Traders: 67 :
: 18 16 4 . 0 16 0 . 17 5 6 :
—————————————————————————————————————-

COFFEE

General Comments: New York closed much higher and London closed higher last week. It remains a bull market on a lack of supplies available from origin. New York has found support from the lack of Coffee available in Brazil after extreme weather events. London is having trouble sourcing Coffee from Vietnam due to a shortage of containers to carry the Coffee out of the country and as the country suffers from a resurgence of the Covid epidemic. Prices in New York have been firm as the current Brazil harvest starts to wind down. Dry weather and warm temperatures are seen now in Brazil for the last of the harvest. Scattered showers are now in the forecast for Southeast Asia. Good conditions are reported in northern South America and good conditions are reported in Central America. Conditions are reported to be generally good in parts of Africa.

Overnight News: ICE-certified stocks are lower today at 2.123 million bags. The ICO daily average price is now 174.48 ct/lb. Brazil will get mostly dry conditions or isolated showers with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.

Chart Trends: Trends in New York are up with objectives of 195.00 and 203.00 December. Support is at 190.00, 188.00, and 185.00 December, and resistance is at 194.00, 201.00, and 203.00 December. Trends in London are mixed to up with objectives of 2250 November. Support is at 2100, 2060, and 2030 November, and resistance is at 2180, 2210, and 2240 November.

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/21/2021
Reportable Positions
===============================================================================
Producer/Merchant/ Swap Dealers
Processor/User
OI Long Short Long Short Spreading
===============================================================================
ICE Futures Europe
146,324 51,972 88,122 6,658 9,657 2,126
Percent of Open Interest Represented by each Category of Trader
100% 35.5% 60.2% 4.6% 6.6% 1.5%
Number of Traders in Each Category
145 39 38 11 8 11
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
36,473 1,614 9,526 4,269 3,118 28,625
Percent of Open Interest Represented by Each Category of Trader
24.9% 1.1% 6.5% 2.9% 2.1% 19.6%
Number of Traders in Each Category
44 4 12 16 9 19
Nonreportable Positions
=======================
Long Short
=======================
6,675 3,536
Percent of Open Interest Represented by Each Category of Trader
4.6% 2.4%

SUGAR

General Comments: New York and London were both a little lower last week and the charts imply that the current rally attempt might be running out of steam. There is still talk of a squeeze developing as the market moves to September expiration. The reduced production potential from Brazil is still impacting the market. India is not offering as world prices are well below domestic prices. The ISO has noted that this will be the second year of deficit production for the world, in large part because of the Brazil freeze that cut production. Consumption of Sugar remains on the light side. Fears that Covid is coming back and could reduce economic activity and demand are still around. Thailand is expecting improved production.

Overnight News: Brazil will get mostly dry conditions or isolated showers. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed to up with objectives of 2040, 2090, and 2120 March. Support is at 1980, 1950, and 1930 March, and resistance is at 2030, 2050, and 2090 March. Trends in London are mixed to up with objectives of 526.00 December. Support is at 508.00, 505.00, and 496.00 December, and resistance is at 520.00, 526.00, and 532.00 December.

COT — Supplemental Report – Option and Futures Combined Positions as of September 21, 2021
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SUGAR NO. 11 – ICE FUTURES U.S.
CFTC Code #080732 Open Interest is 1,101,439
: Positions :
: 199,746 36,585 209,554 333,231 732,371 267,648 72,933 1,010,178 1,051,443: 91,261 49,996
: Changes from: September 14, 2021 (Change in open interest: -137,599) :
: -4,824 -2,340 -54,712 -54,667 -45,025 -14,587 -29,264 -128,790 -131,341: -8,808 -6,258
: Percent of Open Interest Represented by Each Category of Trader :
: 18.1 3.3 19.0 30.3 66.5 24.3 6.6 91.7 95.5: 8.3 4.5
: Total Traders: 238 Number of Traders in Each Category :
: 79 27 67 74 76 40 18 217 167:
——————————————————————————————————————-DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/21/2021
Reportable Positions
===============================================================================
Producer/Merchant/ Swap Dealers
Processor/User
OI Long Short Long Short Spreading
===============================================================================
ICE Futures Europe
71,404 30,302 51,908 8,112 3,343 3,196
Percent of Open Interest Represented by each Category of Trader
100% 42.4% 72.7% 11.4% 4.7% 4.5%
Number of Traders in Each Category
91 27 34 10 4 5
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
17,100 2,360 5,828 320 988 587
Percent of Open Interest Represented by Each Category of Trader
23.9% 3.3% 8.2% 0.4% 1.4% 0.8%
Number of Traders in Each Category
24 4 11 3 3 4
Nonreportable Positions
=======================
Long Short
=======================
5,959 3,194
Percent of Open Interest Represented by Each Category of Trader
8.3% 4.5%

COCOA

General Comments: New York and London closed lower Friday and chart trends are turning down on the weekly charts in New York. The weekly charts in London are still showing up trends. There are increasing concerns that Ghana will have less production this year. Ghana is the worlds second-largest producer behind Ivory Coast. It signed a deal to borrow money for crop financing and export financing for the year. Ivory Coast has stopped selling for the next crop on fears of less supplies. World economies are starting to reopen after Covid and the open economies are giving demand the boost. The weather has had below-normal rains in West Africa and crop conditions are rated good for now but there is concern about the lack of rain. Drier weather will be beneficial for the harvest which will be underway soon. Some are forecasting less production in the coming year. Ivory Coast sources told wire services that the country has sold between 1.64 million and 1.66 million tons of Cocoa so far this season. This is considered a very big amount and there are concerns about Cocoa availability at origin moving forward. Cocoa production in Ivory Coast is expected to drop by up to 11% in the 2021/2022 season that starts on Oct. 1 from last year.

Overnight News: Isolated to scattered 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 5.503 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2540, 2520, and 2470 December, with resistance at 2620, 2660, and 2710 December. Trends in London are mixed. Support is at 1780, 1740, and 1710 December, with resistance at 1820, 1840, and 1850 December.

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/21/2021
Reportable Positions
===============================================================================
Producer/Merchant/ Swap Dealers
Processor/User
OI Long Short Long Short Spreading
===============================================================================
ICE Futures Europe
319,610 183,959 249,803 32,949 10,535 10,708
Percent of Open Interest Represented by each Category of Trader
100% 57.6% 78.2% 10.3% 3.3% 3.4%
Number of Traders in Each Category
143 43 42 15 6 10
Reportable Positions
===============================================================================
Managed Money Other Reportable
Long Short Spreading Long Short Spreading
===============================================================================
43,883 6,827 13,057 5,624 470 25,817
Percent of Open Interest Represented by Each Category of Trader
13.7% 2.1% 4.1% 1.8% 0.1% 8.1%
Number of Traders in Each Category
36 12 14 13 8 15
Nonreportable Positions
=======================
Long Short
=======================
3,613 2,393
Percent of Open Interest Represented by Each Category of Trader
1.1% 0.7%

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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