Softs Report - Thursday, Aug. 19

COTTON
General Comments: Futures were mixed to higher yesterday with nearby months showing some weakness. Prices can continue to climb in coming days. Showers are falling in Texas and throughout the major growing areas of the south. The Southeast is turned drier now as Fred has passed through the region. 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. Overall growing conditions are much better now in just about all areas.
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 91.63 ct/lb. ICE said that certified stocks are now 80,330 bales, from 83,639 bales yesterday. USDA said that net Upland Cotton export sales were 242,400 bales this year and 59,500 bales next year. Net Pima sales were 10,600 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are up with objectives of 9680 December. Support is at 9270, 9250, and 9180 December, with resistance of 9600, 9670 and 9720 December.

Image by zanna-76 from Pixabay

FCOJ
General Comments: FCOJ closed lower yesterday in range trading as Florida weather remains nonthreatening 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. A new system could hit the state in the next couple of days and be more threatening than Fred, but the market appears unconcerned. 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.
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 135.00, 139.00, and 142.00 September.

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