Softs Report - Tuesday, July 27

COTTON
General Comments: Futures were a little higher on demand concerns as ideas of strong demand continue. 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. 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.
Overnight News: The Delta will get isolated showers and near to above normal temperatures and Southeast will get scattered showers and near normal temperatures. Texas will have isolated showers and near to above normal temperatures. The USDA average price is now 86.18 ct/lb. ICE said that certified stocks are now 101,709 bales, from 101,709 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 9130, 9250 and 9460 December. Support is at 8800, 8590, and 8470 December, with resistance of 9000, 9060 and 9120 December.

Image by zanna-76 from Pixabay

FCOJ
General Comments: FCOJ closed a little lower despite new forecasts for freezing temperatures in Sao Paulo Brazil that could affect the production of Oranges in the state. Freezing temperatures have been reported in the state in the last couple of weeks but the freezes were already priced into the market. Weather 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 cold and dry. 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.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get mostly dry conditions and below 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 to up with objectives of 142.00 September. Support is at 134.00, 130.00, and 128.00 September, with resistance at 139.00, 142.00, and 144.00 September.

COFFEE
General Comments: New York closed sharply higher and London closed higher last week on freezing temperatures in Brazil growing areas early last week and forecasts for more later this week. It is not yet known how extensive the damage was but ideas are that a significant part of the cop got hurt. The forecasts for freezing temperatures later this week means more damage is possible. It is flowering time for the next crop and the flowers were frozen and will drop off the trees. London remains firm overall on some speculative and commercial buying tied to dry weather in Southeast Asia and on reports that Vietnamese producers were not selling or delivering. Some of the buying was tied to the big rally in New York as well. Temperatures are uncertain in Brazil. There were some losses created by a hot and dry start to the growing season that impacted flowering and initial cherry development and a little Coffee was lost during the freeze event several weeks ago. Showers are coming this week to Southeast Asia and tree condition should be improved. 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 parts of Asia and parts of Africa.
Overnight News: ICE certified stocks are a little lower today at 2.177 million bags. The ICO daily average price is now 149.00 ct/lb. Brazil will get mostly dry conditions with below normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are up with no objectives. Support is at 199.00, 193.00, and 187.00 September, and resistance is at 215.00, 220.00 and 226.00 September. Trends in London are up with no objectives. Support is at 1780, 1750, and 1710 September, and resistance is at 1990, 2020, and 2050 September.

SUGAR
General Comments: New York and London were higher as freezing temperatures hit Sugarcane areas of Brazil and probably caused some significant damage. More cold temperatures are in the forecast for later this week. Reports of damaged cane in Brazil and pictures of the damage were tweeted, but there has not been any real information sent out since the event. The pictures are showing the potential for significant damage to crops. Mills were also processing for more Ethanol and less for Sugar than expected and this trend should continue even with weaker world petroleum prices. London has been the weaker market on ample supplies of White Sugar available to the market and as demand for White Sugar is less. There is plenty of White Sugar available in India for the market and monsoon rains are promoting good conditions for the next crop. The Indians are selling with or without a subsidy from the government. Thailand is expecting improved production. Sugar demand is said to be weak. Ethanol demand is returning to the market as more world economies open up after the pandemic.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average below normal.
Chart Trends: Trends in New York are up with objectives of 1880 and 1980 October. Support is at 1780, 1750, and 1710 October, and resistance is at 1860, 1880, and 1910 October. Trends in London are mixed. Support is at 451.00, 446.00, and 442.00 October, and resistance is at 460.00, 466.00, and 470.00 October.

COCOA
General Comments: New York and London closed higher yesterday on ideas of increasing demand. Futures remain in a trading range on the daily and weekly charts. It appears that the supply fundamentals are now part of the price structure for Cocoa. The European grind data was released recently and showed a strong recovery from the Covid times. Asian data was released a week ago and also showed increased demand, although not as much of an increase than showed for Europe. The North American data also showed increased demand. 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 above average rains in West Africa and crop conditions are rated good.
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 higher today at 5.813 million bags.
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2370, 2310, and 2260 September, with resistance at 2440, 2460, and 2500 September. Trends in London are mixed. Support is at 1580, 1570, and 1550 September, with resistance at 1660, 1670, and 1690 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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