Softs Report - Tuesday, July 20

General Comments: Futures were lower on demand concerns as Covid has returned to the forefront. The Delta variant has spread fast and is hurting mostly unvaccinated people. The speed at which it has spread has scared traders and investors and caused a big selloff in the stock index futures in the US. The outlook for a weaker than expected economy and the potential for lockdowns or restricted movement hurt Cotton as it depends on people buying clothes and spending money. The return of Covid means that they might not have much leftover for new clothes for at least the short term. Production ideas are being impacted in just about all areas due to the weather extremes. Demand was increased in the weekly export sales report and is expected to stay strong as the world economy rebounds from the Covid times.
Overnight News: The Delta will get isolated showers and near to below normal temperatures and Southeast will get scattered showers and near to below normal temperatures. Texas will have mostly dry conditions and near to below normal temperatures. The USDA average price is now 86.59 ct/lb. ICE said that certified stocks are now 107,517 bales, from 107,517 bales yesterday. ICE said that 0 notices were posted for July delivery and that total deliveries for the month are now 117 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 8630, 8590, and 8470 December, with resistance of 8900, 9000, and 9060 December.

Image by mac231 from Pixabay

General Comments: FCOJ closed lower yesterday on world economic concerns caused by the return of Covid and as conditions in Florida are rated mostly good for the crops. The Atlantic is turning more active although nothing has formed to threaten the state of Florida yet. A big storm could threaten trees and fruit. Brazil is reported to be in good condition, but dry. It has been cold but any damage is called minor. Cold weather is forecast for later this week and a little damage is possible although rated as not likely by forecasters. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. Northern and western Mexico areas are getting some rains and conditions are rated mostly good. Some areas have had too much rain. Florida inventories are now 16.6% below a year ago.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get mostly dry conditions and near-normal temperatures. ICE said that 0 notices were posted for delivery against July contracts and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 125.00, 122.00, and 121.00 September, with resistance at 132.00, 135.00, and 138.00 September.

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