Softs Report - Tuesday, Dec. 22

COTTON
General Comments: Cotton closed higher again and made a new high close on the weekly charts again. USDA surprised the market over a week ago 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 once again last week. 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. Temperatures should average near to above normal in the Delta and in the Southeast early in the week, then near to below normal. Texas will have mostly dry conditions and near normal temperatures. The USDA average price is now 70.47 ct/lb. ICE said that certified stocks are now 77,326 bales, from 77,678 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.
Chart Trends: Trends in Cotton are up with objectives of 7490, 7740, and 7930 March. Support is at 7600, 7550, and 7460 March, with resistance of 7740, 7770 and 7800 March.

FCOJ
General Comments: FCOJ closed higher again yesterday on follow through buying from the rally late last week. The weather in Florida remains mostly benign. Florida has been spared any 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. Restaurant and food service demand has been much less as no one is dining out. The weather in Florida is good with frequent showers to promote good tree health and fruit formation. Brazil has been too dry and irrigation is being used. Showers are falling in Brazil now and these need to continue to ensure good tree health. However, it could turn warm and dry again next week. Mexican crop conditions are called good with rains.
Overnight News: Florida should get mostly dry conditions today and tomorrow, then scattered showers. Temperatures will average near to above normal through Thursday, then below normal normal. Brazil should get scattered showers and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 123.00, 128.00, and 130.00 January. Support is at 115.00, 113.00, and 110.00 January, with resistance at 125.00, 126.00, and 127.00 January.

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