Softs Report - Thursday, Sept. 15

cottons on white surface

Photo by Marianne Krohn on Unsplash


General Comments: Cotton closed a little higher yesterday in range trading. The late-season weather in the Great Plains was better and the crop showed improvement. An increase in export volumes was noted by USDA because of the increased production, but the supply increase was bigger than the demand increase, and ending stock estimates increased. The harvest is coming and the market is preparing for it sideways to lower prices. The trade is still worried about demand moving forward due to recession fears and Chinese lockdowns but is also worried about total US production potential. The Chinese quarantine is one week now instead of one month as before. It is possible that the continued Chinese lockdowns will continue to hurt demand for imported Cotton for that country and that a weaker economy in the west will hurt demand from the rest of the world.

Overnight News: The Delta will get mostly dry conditions and near to below-normal temperatures and the Southeast will get mostly dry conditions and near-normal temperatures. Texas will have mostly dry conditions and near to above-normal temperatures.  The USDA average price is now 107.95 ct/lb.  ICE said that certified stocks are now 4,552 bales, from 4,552 bales yesterday. USDA said that the combined export sales for the weeks of August 18 and August 25 for Upland Cotton were 258,100 bales this year and 93,000 bales next year.  Net Pima sales were 900 bales this year and o bales next year.  For the week ending September 1, Upland Cotton sales were 20,900 bales this year and 0 bales next year.  Net Pima sales were 230,700 bales this year and 101,000 bales next year.  For the week ending September 8, net Upland Cotton sales were 100,300 bales this year and 25,500 bales net year. Net Pima sales were 0 bales this year and o bales a net year.

Chart Trends: Trends in Cotton are mixed. Support is at 101.20, 99.50, and 97.60 December, with resistance of 106.00, 108.70 and 111.00 December.


General Comments: FCOJ was lower again yesterday in range trading. USDA issued a lower production estimate for California oranges, but California oranges are mostly used for fresh consumption and not for juice. USDA increased the Florida production estimate to 41.1 million boxes, from 41.0 million last month. The weather remains generally good for production around the world for the next crop. Brazil has some rain and the conditions are rated good.  It has been dry recently in Sao Paulo but apparently not dry enough to affect the trees or fruit all that much. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures. It has been dry in Brazil. Mexican areas are showing mixed trends, with dry weather in some northern areas but better weather to the south. FCOJ inventories are now 39.8% less than a year ago.   

Overnight News: Florida should get scattered showers. Temperatures will average near normal.  Brazil should get mostly dry conditions and near to 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 to down with no objectives. Support is at 165.00, 162.00, and 159.00 November, with resistance at 173.00, 175.00, and 178.00 November.



General Comments: New York and London were lower again yesterday with most of the weakness in New York on ideas of improving conditions for the Brazil crop and hopes for better offers. Better offers in Arabica were confirmed by CECAFE which noted a big increase in exports last month in its report. Robusta shipments were down sharply and overall Coffee exports were less. There is concern that Brazil will produce less Coffee this year due to very dry conditions after early rains led to premature flowering.  The forecasts call for some light and isolated to scattered showers in the region for this weekend.  Vietnam has also been dry and wire reports from there indicate that production losses are likely. Demand for Coffee overall is thought to be less but the cash market remains strong. There is less Coffee on offer from the origin, with Brazil offering less and Central America and Vietnam offering less as well. The weather in Brazil is good for Coffee production and any harvest activities. Temperatures are mostly above normal in Brazil and conditions are mostly dry. The dry weather is raising some concerns about the next crop potential but it is normally dry at this time of year.

Overnight News: ICE-certified stocks are lower today at 0.575 million bags. The ICO daily average price is now 197.38 ct/lb.  Brazil will get mostly dry conditions with near to above-normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 94 contracts were posted for delivery against September futures and that total deliveries for the month are now 1,493 contracts.

Chart Trends: Trends in New York are down with objectives of 206.00 December. Support is at 213.00, 210.00, and 205.00 December, and resistance is at 221.00, 224.00 and 231.00 December. Trends in London are mixed to down with objectives of 2380 and 2320 November.  Support is at 2220, 2200, and 2150 November, and resistance is at 2270, 2300, and 2350 November.


General Comments: New York closed a little higher and London was lower yesterday but both markets remain in a trading range. The selling appeared as the market tries to identify much demand amid reports from UNICA of increased cane processing and increased Sugar in the production mix at the expense of Ethanol. The New York market is worried that the lack of clarity about ethanol demand in Brazil will force mills down there to continue to produce more Sugar for export.  The Brazilian president has lowered the fuel taxes in Brazil and this is squeezing the profit margins of the mills. The mills could produce much more Sugar over time due to the tax changes. The London market had been looking for increased supplies from the origin and now is more worried about demand after recent price strength. Indian exporters are waiting for the government to announce its export policy for the coming year. The government is expected to announce the first tranche of 5.0 million tons for the export market in the next few days.

Overnight News: Brazil will get isolated showers. Temperatures should average near to above normal. India will get isolated showers in eastern areas and near to above-normal temperatures.

Chart Trends: Trends in New York are mixed. Support is at 1790, 1760, and 1740 March and resistance is at 1830, 1850, and 1860 March. Trends in London are mixed. Support is at 530.00, 527.00, and 520.00 December and resistance is at 544.00, 548.00, and 559.00 December.


General Comments: New York and London were both lower as ideas of big production and uncertain demand kept the markets in a sideways trend at best. Trends are mixed in both markets but the price action overall has been weak. Reports indicate that buyers of Cocoa have enough coverage for now and can afford to wait for lower prices to develop. Supplies of Cocoa are as large as they will be now for the rest of the marketing year. Reports of scattered showers along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. Ideas are still that good production is expected from West Africa for the year. The weather is good for harvest activities in West Africa but the harvest should be winding down now. The weather is good in Southeast Asia.  Ivory Coast arrivals are now 59,000 tons, up 9.2% from last year.

Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal.  Brazil will get mostly dry conditions and near-normal temperatures. ICE-certified stocks are lower today at 5.653 million bags. ICE NY said that 2 notices were posted for delivery against September contracts and that total deliveries for the month are now 2,689 contracts.

Chart Trends: Trends in New York are mixed to down with objectives of 2290 December. Support is at 2320, 2310, and 2280 December, with resistance at 2400, 2430, and 2450 December. Trends in London are mixed to down with objectives of 1800 December. Support is at 1800, 1770, and 1750 December, with resistance at 1860, 1880, and 1900 December.

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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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