Softs Report - Tuesday, Aug. 10

COTTON
General Comments: Futures were lower yesterday on reduced hopes for improved demand on fears of a return of the Covid pandemic due to the Delta variant and on weaker Crude Oil futures. Ideas of good US production continue as the weather is currently good. 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 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 with some dry pockets noted, and the Delta and Southeast have had drenching rains at various times in the last couple of months. The Texas Panhandle is expecting beneficial showers this week.
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 88.31 ct/lb. ICE said that certified stocks are now 91,041 bales, from 91,041 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 9230, 9460, and 9680 December. Support is at 8890, 8800, and 8590 December, with resistance of 9130, 9180 and 9240 December.

Image by Jeser Andrade Arango from Pixabay

FCOJ
General Comments: FCOJ closed lower again yesterday in range trading as Florida weather remains nonthreatening and the cold weather has passed in Brazil. Freezing temperatures have been reported in the state in the last couple of weeks. Weather conditions in Florida are rated mostly good for the crops. The Atlantic is more active but nothing has formed to threaten the state of Florida yet. A big storm could threaten trees and fruit. 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. Demand news has been bad with Nielsen reporting a third month of declining sales. The sales are now the weakest since the Pandemic began and are likely to head lower as the world and the US emerge from the pandemic.
Overnight News: Florida should get scattered showers. 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 138.00, 142.00, and 144.00 September.

COFFEE
General Comments: New York and London closed higher yesterday on dry weather for Brazil Coffee areas and a weaker US Dollar. Prices have stayed firm as the current Brazil harvest starts to wind down. The freeze threat in Brazil has passed with some additional damage. The government in Brazil estimates that 11% of the Coffee areas were affected. Temperatures are trending warmer with near to above normal readings expected. It is flowering time for the next crop and the flowers were frozen and will drop off the trees. The current outlook calls for 10 days of dry weather which will not support the flowering either. London remains firm overall on dry weather in Southeast Asia, but improved showers are now in the forecast. Little demand is showing for Vietnamese Coffee as containers to ship the Coffee are hard to find. Good conditions are reported in northern South America and good conditions reported in Central America. Colombia is having trouble exporting Coffee due to protests inside the country. Conditions are reported to be generally good in the rest of Southeast Asia and in parts of Africa, but Ivory Coast and Ghana have been a little dry.
Overnight News: ICE certified stocks are unchanged today at 2.159 million bags. The ICO daily average price is now 157.07 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.
Chart Trends: Trends in New York are mixed. Support is at 171.00, 168.00, and 166.00 September, and resistance is at 190.00, 200.00 and 209.00 September. Trends in London are mixed. Support is at 1730, 1710, and 1670 September, and resistance is at 1800, 1870, and 1920 September.

SUGAR
General Comments: New York and London were lower as the temperatures have moderated in Brazil. Crude oil was much weaker and hurt ideas of Ethanol demand. Ideas are that the damage from previous freezes and drought episodes should show up in processing data for August. London has been the weaker market but has firmed a bit lately with the problems in Brazil. There is plenty of White Sugar available in India for the market and monsoon rains are promoting good conditions for the next crop. Thailand is expecting improved production. Ethanol demand is returning to the market as more world economies open up after the pandemic, but renewed Ethanol demand is now in doubt with weaker Crude Oil futures and covid pandemic fears as the Delta variant spreads.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1920 and 1980 October. Support is at 1820, 1780, and 1750 October, and resistance is at 1890, 1910, and 1940 October. Trends in London are mixed. Support is at 446.00, 442.00, and 440.00 October, and resistance is at 459.00, 465.00, and 467.00 October.

COCOA
General Comments: New York and London closed a little higher yesterday in range trading. London was the stronger market. Ivory Coast has forward sold 1.4 million tons of beans and has stopped selling for the next crop on fears of less supplies. The grind data was released recently and showed a strong recovery from the Covid times. World economies are starting to reopen after Covid and the open economies are giving demand the boost. Ports in West Africa are filled with Cocoa right now. The weather has had below to rains in West Africa and crop conditions are rated good. Ivory Coast arrivals are now 2.11 million tons, up 4.8% from last year. Ivory Coast processed 452,000 tons of beans by the end of July, down 3.6% from last year.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be 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 5.670 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2390, 2340, and 2330 September, with resistance at 2430, 2460, and 2500 September. Trends in London are mixed. Support is at 1660, 1630, and 1610 September, with resistance at 1690, 1710, and 1730 September.

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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