Softs Report - Tuesday, 18

General Comments: Futures were a little higher in recovery trading. Trends have turned down on the daily charts but the weekly charts are holding mixed trends. The WASDE reports released on Wednesday featured a tight ending stocks scenario moving forward for the market. Demand ideas were strong. However, the export sales reports in the last several weeks have been less than hoped for. Buying is still coming from dry weather in Texas although the forecasts for the region are improved with rains seen over the weekend and with more coming and selling is coming from weaker demand as seen in the weekly export sales reports. The demand for US Cotton in the export market was weaker once again last week, but has been strong even with the Coronavirus causing disruptions at the retail level around the world. The US economy is better and is starting to reopen.
Overnight News: The Delta will get scattered showers today and tomorrow, then mostly dry conditions and near to above normal temperatures and Southeast will get mostly dry conditions and near normal temperatures. Texas will have scattered showers and near to below normal temperatures. The USDA average price is now 78.14 ct/lb. ICE said that certified stocks are now 105,098 bales, from 95,536 bales yesterday. ICE said that 0 notices were posted for delivery against May contracts and that total deliveries for the month are now 70 contracts. USDA said that Cotton was 38% planted, from 25% last week, 42% last year, and 40% average.
Chart Trends: Trends in Cotton are down with objectives of 7850 July. Support is at 8120, 8090, and 7900 July, with resistance of 8460, 8610 and 8750 July.

Coffee Beans, Coffee Cup, Cup, Coffee, Benefit From

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General Comments: FCOJ closed higher in range trading on what appeared to be speculative buying. Daily and weekly chart trends are turning up. The weather in Florida is good with a few showers or dry weather to promote good tree health and fruit formation. The hurricane season is coming and a big storm could threaten trees and fruit. That is still a couple of months away. It is dry in Brazil and crop conditions are called good even with drier than normal soils. Stress to trees could return if the dry weather continues as is in the forecast. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. It is dry in northern and western Mexican growing areas.
Overnight News: Florida should get mostly dry conditions. Temperatures will average near to above normal. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 contracts were posted for delivery against May futures and that total deliveries for the month are now 118 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 121.00 and 126.00 July. Support is at 116.00, 113.00, and 112.00 July, with resistance at 120.00, 122.00, and 126.00 July.

General Comments: New York closed a little higher and London closed a little lower as the US Dollar was weaker and the weather in Brazil stays bad. The daily charts show down trends. The current and future Brazil weather is still moving the market. Most if not all areas should stay dry for at least the next week. Fears of dry weather impacting the Brazil production continued to support prices overall. It remains generally dry there and there are still no forecasts for any significant rains in Coffee areas. It was dry at flowering time as well. It is also the off year in the two year production cycle. Production conditions elsewhere in Latin America are mixed with good conditions reported in northern South America and improved conditions reported in Central America. Conditions are reported to be generally good in Asia and Africa. Its turning a little dry in Southeast Asia including Vietnam.
Overnight News: ICE certified stocks are little changed today at 2.020 million bags. The ICO daily average price is now 130.32 ct/lb. Brazil will get mostly dry conditions except for scattered showers today and tomorrow with near to above normal temperatures. Central America will get scattered showers or dry conditions. Vietnam will see scattered showers. ICE said that 48 contracts were tendered for delivery against NY May futures and that total deliveries for the month are now 1.040 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 140.00 and 132.00 July. Support is at 144.00, 142.00, and 140.00 July, and resistance is at 152.00, 155.00 and 157.00 July. Trends in London are mixed to down with objectives of 1480 and 1440 July. Support is at 1440, 1410, and 1380 July, and resistance is at 1480, 1500, and 1520 July.

General Comments: New York and London were both higher on drought conditions continuing in Brazil. Both markets could still be forming tops on the daily and weekly charts. There is plenty of White Sugar available in India for the market and London has been the weaker market lately. Fears of dry Brazilian weather continued. The primary growing region has been dry in Brazil with little or no rain in the forecast except for Parana. Production has been hurt due to dry weather earlier in the year. The seasonal crush is off to a slow start and Sugar content of the cane is reduced in initial industry reports from the center-south of Brazil. India is exporting Sugar and is reported to have a big cane crop this year. Thailand is expecting improved production after drought induced yield losses last year. The EU had production problems last year but is expecting much better production this year.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1680, 1580, and 1390 July. Support is at 1660, 1650, and 1610 July, and resistance is at 1740, 1780, and 1800 July. Trends in London are mixed. Support is at 449.00, 447.00, and 439.00 August, and resistance is at 459.00, 466.00, and 470.00 August.

Brazilian farmers will produce 628.1 million tons of sugar cane in the current season, a decline of 4% from the 2020-2021 season, Conab said Tuesday in its first forecast for the cycle. Sugar output will fall 5.7% to 38.9 million tons and production of ethanol, from sugar cane and from corn, will decline 6.8% from the previous season to 30.5 billion liters, it said.
Brazil, the world’s biggest producer and exporter of sugar, is suffering from a lack of rain in many of its most important agricultural areas, leading analysts to forecast lower productivity for the country’s coffee and corn crops as well. Conab is scheduled to publish its second forecast for the 2021 coffee growing season on May 25.
Some Brazilian sugar cane farmers are switching over to soybean and corn production because of better prices on world markets for those commodities, Conab said, and the agency forecast a decline in the planted area for sugar cane of 2.2% in 2021-2022.
Brazil has the world’s largest fleet of vehicles that can run on either gasoline or ethanol, and all the gasoline in the country also has ethanol blended into it. The price for ethanol in Brazil is normally set based on the price of gasoline, making it vulnerable to swings in global oil and fuel prices.
The scant precipitation in some areas and an outlook for continued dry weather will likely lead to Brazilian mills using a greater proportion of the sugar cane crop to produce ethanol at the expense of the sweetener, according to Conab. The outlook for low ethanol prices this year, because of lower-than-normal domestic demand and falling oil prices, could reverse that trend, Conab added.

General Comments: New York and London closed higher again yesterday. Weekly price trends are up in London and are turning up in New York. The daily charts show sideways trends in New York but up trends in London. The harvests are over in West Africa and ports there have been filled with Cocoa. European demand has been slow as the quarterly grind data showed a 3% decrease from a year ago in grindings. This has been caused by less demand created by the pandemic. Asian demand improved. North American data showed improved demand. But, the supplies are there for any increased demand.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near to 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 5.195 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2510, 2408, and 2450 July, with resistance at 2550, 2570, and 2590 July. Trends in London are up with objectives of 1740 July. Support is at 1690, 1660, and 1630 July, with resistance at 1730, 1760, and 1770 July.

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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