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COTTON

General Comments: Futures were lower on some selling generated by the harvest and the increased ending stocks seen in the Friday USDA reports. 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. However, the expansion of the Delta variant has given pause to the better demand ideas due to fears of economies here and around the world starting to partially lockdown again. Production ideas are being impacted in just about all areas due to the weather extremes. It has been very hot in parts of Texas and the Delta and Southeast have had drenching rains at various times in the last couple of months. Even so, good US production totals are expected.

Overnight News: The Delta will get isolated showers with some big rains possible in the south and near-normal temperatures and the Southeast will get isolated to scattered showers and near to above normal temperatures. Texas will have isolated showers or dry conditions and above normal temperatures. The USDA average price is now 90.59 ct/lb. ICE said that certified stocks are now 64,455 bales, from 64,455 bales yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 9200, 9180, and 9160 December, with a resistance of 9370, 9510, and 9600 December.

Crop Progress
Date 12-Sep 5-Sep 2020 Avg
Cotton Setting Bolls 96 94 99 99
Cotton Bolls Opening 36 29 46 43
Cotton Harvested 5 6 8
Crop Condition
Very Poor Poor Fair Good Excellent
Cotton This Week 1 5 30 50 14
Cotton Last Week 1 6 32 50 11
Cotton Last Year 7 20 28 36 9

FCOJ

General Comments: FCOJ closed higher again yesterday and chart trends are still mostly up on weather concerns, especially for Brazil but also for Florida and Mexico. A freeze hit Sao Paulo state several weeks ago and reports of significant losses are being heard. Weather conditions in Florida are rated mostly good for the crops with scattered showers and near-normal temperatures. 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 above normal temperatures. ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 0 contracts.

Chart Trends: Trends in FCOJ are mixed. Support is at 135.00, 130.00, and 128.00 November, with resistance at 143.00, 144.00, and 146.00 November.

COFFEE

General Comments: New York closed lower and London closed higher yesterday as speculators appeared to liquidate some long positions and as chart trends started to turn down. London took the speculative selling better as that market is having trouble sourcing Coffee from Vietnam due to a shortage of containers to carry the Coffee out of the country. The expansion of the Delta variant that has caused so many problems around the world and is really affecting the Vietnamese. Prices in New York have been firm as the current Brazil harvest starts to wind down with smaller production. The damage from the Brazil freeze several weeks ago is apparent. Some trees were killed and will have to be replaced. Dry weather and warm temperatures are reported now. Scattered showers are now in the forecast for Southeast Asia. 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 Africa.

Overnight News: ICE-certified stocks are unchanged today at 2.161 million bags. The ICO daily average price is now 167.75 ct/lb. Brazil will get mostly dry conditions with above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 0 contracts were tendered for delivery against September futures and that total delivery for the month are now 1,047 contracts.

Chart Trends: Trends in New York are down with objectives of 182.00 and 172.00 December. Support is at 182.00, 178.00, and 176.00 December, and resistance is at 191.00, 194.00, and 201.00 December. Trends in London are mixed. Support is at 2030, 2000, and 1950 November, and resistance is at 2100, 2120, and 2150 November.

DJ Brazil Coffee Exports Fall 25.2% in Aug. to 2.67M Bags, Cecafe Says
By Jeffrey T. Lewis

SÃO PAULO–Brazilian coffee exports dropped in August as shipping problems got in the way, according to exporters group Cecafe.
The South American country exported 2.67 million 132-pound bags of coffee last month, a decline of 25.2% from the same month a year earlier, Cecafe said Monday. Sales abroad of the arabica variety of coffee fell 23.8% to 2.1 million bags, while exports of robusta beans fell 51.9% to 228,460 bags. Exports of roasted, ground, and soluble coffee rose 1.5% to 337,470 bags.

Bottlenecks at Brazilian ports are being worsened by some of the same supply problems that are impeding the flow of other types of goods around the world, according to Cecafe President Nicolas Rueda.

“This serious operational crisis has generated soaring freight costs, constant cancellations of bookings, container space on ships, difficulty in making new appointments, and disputes for containers and places on ships,” he said. Brazil’s total coffee exports in August were the smallest for the month since 2017, according to Cecafe numbers.

SUGAR

General Comments: New York and London were higher yesterday but the trends are still mostly down on the daily and weekly charts. The reduced production potential from Brazil is still impacting the market, but the stronger US Dollar makes Sugar more expensive in local currency terms and the recently weaker Crude Oil prices mean that Ethanol prices could work lower. Wire reports suggest that Ethanol and Sugar prices are at parity so any lower Crude Oil prices now could mean that Ethanol prices move below those of Sugar. That idea is not seen in the latest UNICA data that showed a slightly greater percentage of Sugarcane processed for Ethanol than Sugar in the latest two week period. The ISO has noted that this will be the second year of deficit production for the world, in large part because of the Brazil freeze that cut production. Consumption of Sugar remains on the light side. Fears that the Covid is returning and could reduce economic activity and demand are around. Thailand is expecting improved production.

Overnight News: Brazil will get mostly dry conditions. Temperatures should average above normal.

Chart Trends: Trends in New York are down with objectives of 1880 March. Support is at 1930, 1920, and 1890 March, and resistance is at 1980, 2020, and 2050 March. Trends in London are down with objectives of 486.00 December. Support is at 485.00, 481.00, and 476.00 December, and resistance is at 496.00, 504.00, and 508.00 December.

COCOA

General Comments: New York and London closed higher last week in range trading. Trends are still sideways to down on the daily charts and are mixed on the weekly charts. Ivory Coast has stopped selling for the next crop on fears of less supplies. World economies are starting to reopen after Covid and the open economies are giving demand the boost. The weather has had below-normal rains in West Africa and crop conditions are rated good for now but there is concern about the lack of rain. Drier weather will be beneficial for the harvest which will be underway soon. Some are forecasting less production in the coming year but the ICCO said that it expects a production surplus of 230,000 tons this year, from its previous estimate of 165,000 tons. Ivory Coast sources told wire services that the country has sold between 1.64 million and 1.66 million tons of Cocoa so far this season. This is considered a very big amount and there are concerns about Cocoa availability at origin moving forward.

Overnight News: Isolated to scattered 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 5.488 million bags. ICE said that 47 contracts were posted for delivery against September futures and that total deliveries for the month are now 1,557 contracts.

Chart Trends: Trends in New York are mixed. Support is at 2600, 2570, and 2540 December, with resistance at 2670, 2710, and 2740 December. Trends in London are mixed to down with objectives of 1730 December. Support is at 1770, 1740, and 1710 December, with resistance at 1810, 1840, and 1870 December.