Softs Report - Tuesday, September 12
Photo by Tim Mossholder on Unsplash
Cotton
General Comments: Cotton closed higher yesterday in anticipation of the USDA reports that will be released later today and on reports of stressful conditions for US Cotton production continue. Weak demand is still a problem. Ideas are around that Chinese economic data implies less US cotton demand for the coming year but demand from other buyers has been good. There is more talk of a contraction that could develop in China and Cotton demand could be hurt if people have less money to spend on clothes. The heat is still extreme in the southern US and has yet to moderate. Ideas of weaker demand due to economic problems in Asia continue and Chinese economic data continues to show weakness. There are still many concerns about demand from China and the rest of Asia due to the slow economic return of China in the world market.
Overnight News: The Delta will get isolated showers and above normal temperatures. The Southeast will see isolated showers and near to above normal temperatures. Texas will have scattered showers and near to above normal temperatures. The USDA average price is now 81.87 ct/lb. ICE daily certified stocks are now 4,463 bales, from 2,652 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 86.60, 85.20, and 84.90 December, with resistance of 80.00, 90.80 and 91.20 December.
Crop Progress
Date 10-Sep 3-Sep 2022 Avg
Cotton Setting Bolls 98 94 100 98
Cotton Bolls Opening 43 32 48 42
Cotton Harvested 8 8 7
Crop Condition
Very Poor Poor Fair Good Excellent
Cotton This Week 18 23 30 24 5
Cotton Last Week 19 22 28 26 5
Cotton Last Year 15 22 30 29 4
FCOJ
General Comments: FCOJ closed lower yesterday after trading sharply higher to limit up on Friday on fears that a new hurricane could strike Florida. The track now keeps it away from the US. Reports of short supplies in Florida and Brazil are around. CitrusBR last week estimated stocks were estimated at 84,745 tons for last season. This was the lowest estimate since 2012 when data collection started and stocks were estimated below 100,000 tons. Production for next year is expected to drop a bit due to weather concerns. Futures remain supported by very short Oranges production estimates for Florida. Futures are also being supported in forecasts for an above average hurricane season that could bring a storm to damage the trees once again. Historically low estimates of production due in part to the hurricanes and in part to the greening disease that have hurt production, but conditions are significantly better now with scattered showers and moderate temperatures. The weather remains generally good for products around the world for the next crop including production areas in Florida that have been impacted in a big way by the two storms seen previously in the state
Overnight News: Florida should get isolated showers. Temperatures will average near normal. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 notices were posted for delivery against September futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 356.00 and 382.00 November. Support is at 322.00, 311.00, and 305.00 November, with resistance at 338.00, 344.00, and 350.00 November.
Coffee
General Comments: New York and London closed higher yesterday on weakness in the US Dollar. Offers from Brazil and other countries in Latin America should be increasing but prices are considered a little cheap to create much selling interest from producers. The Brazil harvest moving quickly and this fact has pressured prices. Vietnam is not offering much Coffee into the world market as domestic cash prices are very high. There are still tight Robusta supplies for the market amid strong demand for Robusta with no offers from Vietnam in the world market due to very high domestic prices.
Overnight News: ICE certified stocks are lower today at 0.442 million bags. The ICO daily average price is now 153.74 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Central America will get mostly dry conditions. Vietnam will see scattered showers. ICE NY said that 221 contracts were tendered for delivery against September futures and that total deliveries for the month are now 1,281 contracts.
Chart Trends: Trends in New York are mixed. Support is at 147.00, 145.00, and 142.00 December, and resistance is at 153.00, 158.00 and 160.00 December. Trends in London are mixed. Support is at 2420, 2400, and 2350 November, with resistance at 2480, 2530, and 2570 November.
Sugar
General Comments: Both markets closed higher yesterday in part due to weakness in the US Dollar and in part on continued stressful conditions seen in Asian production areas. The Asian supply situation became more pronounced this week with dry weather the main feature. Traders are more worried about the lack of Sugar exports from India than they are about actual exports from Brazil. The Indian monsoon is expected to withdraw early this year and leave Sugarcane high and dry. Many growing areas have been dry, anyway. There are also worries about the Thai production potential in this year of El Nino. Reports of increased offers from Brazil are still around but other origins are still not offering, and demand is still strong. Brazil reports very good harvest conditions but the weather in Southeast Asia is currently dry. Indian production is less this year and Pakistan also has reduced production and the monsoon has been uneven so far in both countries. Thailand production is also down a lot this year and many Asian countries are worried about El Nino impacting future production.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to below normal. India will get mostly dry conditions and below normal temperatures.
Chart Trends: Trends in New York are up with objectives of 2770 March. Support is at 2620, 2600, and 2540 March and resistance is at 2700, 2720, and 2740 March. Trends in London are mixed. Support is at 703.00, 693,00, and 690.00 December, with resistance at 737.00, 748.00, and 754.00 December.
Cocoa
General Comments: New York closed higher and London closed lower yesterday in consolidation trading. Reports of diseases in West Africa that are hurting production continue. The diseases are from too much rain falling at this time. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue, Talk is that hot and dry conditions reported earlier in Ivory Coast could curtail main crop production, and main crop production ideas are not strong. Midcrop production ideas are lower now with diseases reported in the trees due to too much rain that could also affect the main crop production.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average near normal. Brazil will get isolated showers and near to above normal temperatures. ICE certified stocks are lower today at 5.110 million bags. ICE NY said that 5 notices were posted for delivery against September futures and that total deliveries for the month are now 969 contracts.
Chart Trends: Trends in New York are mixed. Support is at 3570, 3550, and 3490 December, with resistance at 3710, 3740, and 3770 December. Trends in London are mixed. Support is at 2990, 2900, and 2810 December, with resistance at 3050, 3080, and 3110 December.
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