Softs Report - Wednesday, Aug. 5

COTTON
General Comments: Cotton closed higher on hopes for improved demand and as bad growing conditions continued in West Texas. The world is starting to slowly recover from the Coronavirus scare and some stores are open again. However, economic improvement in the US was thrown into doubt as Coronavirus cases surged higher in states that had reopened and some chains have declared bankruptcy. The retail demand has been slow to develop as many consumers got hurt economically due to stay at home orders during the height of the pandemic and have little disposable funds to spend on clothes. Demand will slowly improve but the industry should have plenty of supplies to work with in the short term. The US weather situation is mixed, with good rains noted in the Southeast and good conditions in the Midsouth. However, it has been very hot and dry in West Texas, and crops there are suffering.
Overnight News: The Delta will get scattered showers and Southeast will get isolated showers. Temperatures should be near to above normal. Texas will have scattered showers. Temperatures will average near to above normal. The USDA average price is now 59.64 ct/lb. ICE said that certified stocks are now 6,800 bales, from 6,828 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 6260, 6180, and 6080 December, with resistance of 6430, 6580 and 6680 December.

FCOJ
General Comments: FCOJ was lower in what appeared to be speculative and fund selling. Florida production is now estimated at 67 million boxes, unchanged from last month. New crop production could be hurt by an extended flowering season for the early varieties. California and US production was increased. Support is coming from the continued effects from the Coronavirus that are keeping people at home and drinking Orange Juice. Demand from grocery stores has remained strong in response to the increased consumer demand. Inventories in cold storage remain solid so there will be FCOJ to meet the demand, but inventories are creeping lower. There is concern about the food service demand not improving even with the partial opening of the states. The weather in Florida is currently good for the crops. Prices in the US are lower than those in Europe, so imports are minimal. The tree condition is called good. Brazil has been dry and irrigation has been used. The harvest is active in Brazil.
Overnight News: Florida should get isolated showers. Temperatures will average near to above normal. Brazil should get dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are down with objectives of 113.00 and 111.00 September. Support is at 118.00, 116.00, and 108.00 September, with resistance at 126.00, 128.00, and 132.00 September.

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