Softs Report - Wednesday, Feb. 28

field of cotton trees

Photo by Trisha Downing on Unsplash


COTTON
General Comments: Cotton closed higher yesterday and price trends turned up on the daily charts on reports of stronger demand. The demand news has been solid in this market for the last several weeks. The US economic data has been positive, but the Chinese economic data has not been real positive and demand concerns are still around. 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 mostly dry weather and near normal temperatures. The Southeast will see mostly dry conditions and below normal temperatures. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 93.73 ct/lb. ICE daily certified stocks are now 985 bales, from 997 bales yesterday. ICE said that 0 contracts were posted for delivery against March futures and that total deliveries for the month are now 0 contacts.
Chart Trends: Trends in Cotton are up with objectives of 100.60 May. Support is at 96.70, 96.00, and 93.70 March, with resistance of 99.40, 100.60 and 101.80 March.

FCOJ
General Comments: FCOJ closed limit down yesterday but stopped short of making new highs for the move. The daily chart trends ar3e mixed. Prices had been moving lower on the increased production potential for Florida and the US and also in Brazil but held late last week as current supplies remain very tight amid only incremental relief for supplies is forecast for the coming new crop season. There are no weather concerns to speak of for Florida or for Brazil right now. The weather has improved in Brazil with some moderation in temperatures and increased rainfall amid reports of short supplies in Florida and Brazil are around but will start to disappear as the weather improves and the new crop gets harvested. Historically low estimates of production in Florida 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.
Overnight News: Florida should get scattered showers or dry conditions. Temperatures will average near normal. Brazil should get scattered showers and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 370.00, 365.00, and 361.00 May, with resistance at 389.00, 391.00, and 402.00 May.

COFFEE
General Comments: New York and London closed higher yesterday and prices remain in trading ranges. Robusta offers remain difficult to find and the lack of offer of Robusta remains the main bullish force behind the market action, and reports indicate that Brazil producers are reluctant sellers as well as they apparently have already sold a lot. Brazil weather continues to improve for Coffee production but is still not perfect. Rains continued to fall in parts of Brazil Coffee areas. Brazil weather is improving for the best crop production.
Overnight News: ICE certified stocks are higher today at 0.333 million bags. The ICO daily average price is now 180.23 ct/lb. Brazil will get mostly scattered showers with near normal temperatures. Central America will get mostly dry conditions. Vietnam will see scattered showers. ICE NY said that 0 delivery notices were posted against March contracts and that total deliveries for the month are now 700 contracts.
Chart Trends: Trends in New York are mixed. Support is at 178.00, 173.00, and 169.00 May, and resistance is at 186.00, 190.00 and 194.00 May. Trends in London are mixed. Support is at 2980, 2890, and 2780 May, with resistance at 3120, 3180, and 3200 May.

SUGAR
General Comments: New York and London closed higher again yesterday and futures are at the top end of the trading range. The market continues to see stressful conditions in Asian production areas. There are worries about the Thai and Indian production and talk that India could turn into an importer next year. Offers from Brazil are still active but other origins. are still not offering in large amounts except for Ukraine. Unica in Brazil said that the Sugar crush in south central Brazil as 549,000 tons, up 650% from last year.
Overnight News: Brazil will get rains in the south and scattered showers in the north. Temperatures should average above normal. India will get mostly dry conditions and below normal temperatures.
Chart Trends: Trends in New York are mixed to up with objectives of 2290 and 2390 May. Support is at 2230, 2160, and 2110 May and resistance is at 2290, 2340, and 2360 May. Trends in London are mixed. Support is at 626.00, 610.00, and 601.00 May, with resistance at 645.00, 651.00, and 663.00 May.

COCOA
General Comments: New York and London were lower again yesterday on what appeared to be some speculative profit taking as both markets reflect on the lack of supply in the world market against demand from non traditional sources along with traditional buyers. Production in West Africa could be reduced by 500,000 tons this year due to the extreme weather which now includes Harmattan conditions. Both markets kept the short term trends up. The availability of Cocoa from West Africa remains restricted and projections for another production deficit against demand for the coming year are increasing. The harvest seems to be coming and demand could be a problem with the current very high prices. Traders are worried about another short production year and these feelings have been enhanced by El Nino that is threatening West Africa crops with hot and dry weather. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue. Demand continues strong, especially from non traditional buyers of Cocoa. Ghana now estimates Cocoa production between 650,000 and 700,000 tons, the lowest production in 14 years.
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 above normal temperatures. ICE certified stocks are lower today at 4.178 million bags. ICE NY said that 188 notic3s were posted for delivery against March futures and that total deliveries for the month are now 673 contacts.
Chart Trends: Trends in New York are up with objectives of 6870 May. Support is at 6260, 6050, and 5670 May, with resistance at 6680, 6740, and 6800 May. Trends in London are up with no objectives. Support is at 4020, 3900, and 3800 May, with resistance at 4240, 4360, and 4480 May.


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Grains Report - Monday, Feb. 26
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