Softs Report - Thursday, Dec. 17

COTTON
General Comments: Cotton closed higher once again on follow-through buying tied to the USDA reports and increased export demand. USDA surprised the market on Thursday when it released its monthly supply and demand reports. The reports showed a significant drop in production of US Cotton and much reduced the US ending stocks levels. The reports were bullish and a move to the upper end of the 70 cents range is possible. Harvest is wrapping up amid drier weather conditions in West Texas and the Delta and Southeast. The weekly export sales report showed very strong demand again today. Export demand has held strong despite stay at home orders and weaker economies around the world. Traders now hope for even more demand later as the vaccines are given out and the world economies start to recover.
Overnight News: The Delta and Southeast will get mostly dry conditions except for some showers on Friday in the Delta and Saturday in the Southeast. Temperatures should average near to below normal in the Delta and in the Southeast. Texas will have mostly dry conditions except for some isolat4ed showers on Friday and near to below normal temperatures. The USDA average price is now 71.36 ct/lb. ICE said that certified stocks are now 79,352 bales, from 82,228 bales yesterday. ICE said that 0 notices were posted for delivery against December contracts and that total deliveries for the month are now 354 contracts. USDA said that net weekly Upland Cotton export sales were 420,900 bales this year and 13,800 bales next year. Net Pima sales were 7,900 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are up with objectives of 7490, 7740, and 7930 March. Support is at 7460, 7400, and 7350 March, with resistance of 7560, 7590, and 7620 March.

FCOJ
General Comments: FCOJ was higher on short-covering following the sharp selloff due to the better than expected Florida crop production report. January closed firm. Florida was spared from hurricanes or other serious storms this year in a year that has been very active for tropical storms. The Coronavirus is still promoting consumption of FCOJ at home, but this could change soon as vaccines become available. Restaurant and food service demand has been much less as no one is dining out. The weather in Florida is good with some showers to promote good tree health and fruit formation. Brazil has been too dry. Showers are falling in Brazil now and these need to continue to ensure good tree health. Mexican crop conditions are called good with rains.
Overnight News: Florida should get scattered showers today, then dry conditions. Temperatures will average below normal. Brazil should get scattered showers and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 112.00 and 110.00 January. Support is at 115.00, 113.00, and 110.00 January, with resistance at 118.00, 120.00, and 122.00 January.

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