Softs Report - Thursday, March 26

General Comments: Cotton was higher again yesterday. A stronger US and world stock market and a weaker US Dollar were the best reasons to buy. Much of the selling was related to lost demand potential due to the Coronavirus and the still weak petroleum prices. The Coronavirus has the chance to hurt trade in Cotton between the US and the rest of the world. The weakness in Petroleum futures comes from the moves by Saudi Arabia to ramp up production just at the time when the world economy is slowing down. The threat of a worldwide recession is very real. It also means that man-made fibers are that much cheaper than natural fibers. The strong US Dollar hurts trade anywhere and pushes buying to alternative growths like Brazil.
Overnight News: The Delta and Southeast should see scattered showers starting on Saturday. Temperatures should average above normal. Texas will have mostly dry conditions. Temperatures will trend to near to below normal. The USDA average price is now 48.26 ct/lb. ICE said that certified stocks are now 28,446 bales, from 28,446 bales yesterday. USDA said that net weekly Upland Cotton export sales were 277,100 bales this year and 120,100 bales next year. Net Pima sales were 18,300 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are down with no objectives. Support is at 5070, 5020, and 4960 May, with resistance of 5490, 5630 and 5800 May.

General Comments: FCOJ was sharply higher on-demand considerations here in the US and in South America. Industry sources suggest that demand has improved as consumers are returning to FCOJ due to the Coronavirus. The increased demand has really turned the market around. Good growing conditions and increased oranges production estimates by USDA this season have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no severe storms so far this year. Many areas have been dry lately and irrigation is being used. Crop yields and quality should be high for Florida this year.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get scattered showers through the weekend and near to above normal temperatures.
Chart Trends: Trends in FCOJ are up with no objectives. Support is at 117.00, 115.00, and 113.00 May, with resistance at 133.00, 124.00, and 127.00 May.

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Disclaimer: Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also ...

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