Softs Report - Tuesday, May 25

General Comments: Futures were a little higher yesterday. Trends are mixed on the daily charts. Cotton growing conditions have improved. The export sales reports in the last several weeks have been less than hoped for but were improved last week. The forecasts for the Panhandle region of Texas are improved with rains seen over last week and with more coming. It is drier in the Southeast and Delta production areas and this is beneficial for now. The Southeast needs to be watched as conditions there could turn too hot and dry. The demand for US Cotton in the export market was improved last week and 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 isolated showers and near to above normal temperatures and the Southeast will get mostly dry conditions and above normal temperatures. Texas will have isolated showers and near to above normal temperatures. The USDA average price is now 78.64 ct/lb. ICE said that certified stocks are now 136,192 bales, from 131,061 bales yesterday. USDA said that Cotton was 49% planted, from 38% last week, 52% last year, and 52% average.
Chart Trends: Trends in Cotton are mixed. Support is at 8150, 8120, and 8090 July, with resistance of 8430, 8460, and 8610 July.

General Comments: FCOJ closed a little lower in range trading. Trends are still trying to turn up in this market. The weather in Florida is good with mostly dry weather. The hurricane season is coming and a big storm could threaten trees and fruit. That is still a month 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 mixed. Support is at 113.00, 112.00, and 110.00 July, with resistance at 118.00, 120.00, and 122.00 July.

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General Comments: New York closed lower in correction trading as some beneficial precipitation was reported in Brazil. London was higher as Vietnam stayed dry. The daily charts show mixed trends. Good precipitation was reported in Minas Gerais over the weekend. Most Brazil Coffee areas should stay dry for at least the next week although a few showers are possible in southern Minas Gerais again. Fears of dry weather impacting the Brazil's production continued to support prices overall. 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. It's turning a little dry in Southeast Asia including Vietnam, but a major storm is expected to bring generous rains to the country later this week.
Overnight News: ICE-certified stocks are higher today at 2.067 million bags. The ICO daily average price is now 134.22 ct/lb. Brazil will get mostly dry conditions or isolated showers 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 146.00, 144.00, and 142.00 July, and resistance is at 151.00, 155.00, and 157.00 July. Trends in London are mixed. Support is at 1450, 1440, and 1410 July, and resistance is at 1520, 1540, and 1560 July.

Brazil has a two-year coffee growing cycle in which harvests are normally bigger in even-numbered years, then decline in odd-numbered years as the coffee plants recover. In 2019, Brazil’s coffee growers produced a total crop of 49.3 million bags, a record for an odd-numbered year, and grew 34.3 million bags of arabica.
Several coffee-growing states, especially Minas Gerais, suffered from scant and irregular rain and high temperatures during April and November of last year, hurting development of the plants and adding an additional negative impact on production compared with 2020.
Brazil is the world’s biggest producer and exporter of coffee, growing about one-third of total world production. It’s the biggest grower of arabica coffee and the second-biggest producer of robusta, after Vietnam.
Brazil will produce a robusta crop of 15.4 million bags this year, compared with the earlier forecast for a range of 14.1 million bags to 16.6 million bags. In 2020, Brazil grew 14.3 million bags and in 2019 produced 15 million bags. Robusta plants are less affected by the two-year cycle than arabica plants.

General Comments: New York and London were both higher on demand ideas and did not react much to the rains in southern Brazil over the weekend. Demand for ethanol should be increasing. 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 to date. Fears of dry Brazilian weather continued, but southern growing areas are getting some beneficial rains, with Parana and Sao Paulo getting the best rains. 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. Ethanol demand is returning to the market as more world economies open up after the pandemic.
Overnight News: Brazil will get mostly dry conditions or isolated showers. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1600 and 1450 July. Support is at 1650, 1610, and 1580 July, and resistance is at 1700, 1740, and 1780 July. Trends in London are mixed to down with objectives of 438.00, 434,00, and 424.00 August. Support is at 444.00, 439.00, and 436.00 August, and resistance is at 453.00, 461.00, and 466.00 August.

General Comments: New York and London closed lower with most of the weakness in New York. New York was catching up to the London price action of last week. The daily charts show sideways or downtrends in both markets. 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 5.420 million bags.
Chart Trends: Trends in New York are down with objectives of 2270 and 2210 July. Support is at 2380, 2280, and 2170 July, with resistance at 2430, 2470, and 2490 July. Trends in London are mixed to down with objectives of 1610 July. Support is at 1620, 1580, and 1540 July, with resistance at 1670, 1690, and 1720 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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