Softs Report - Wednesday, Jan. 13

COTTON       

General Comments:  Cotton closed higher and near the highs of the day in response to the USDA reports. USDA cut production by another 1.0 million bales and increased export demand. Domestic demand was trimmed a bit, but ending stocks dropped sharply. Traders had expected USDA to drop production and ending stocks estimates, but not by as much as USDA did. The US weather outlook calls for drier and colder weather for Texas after some big snows over the weekend. It should be colder in the Delta and Southeast as well. Attention for overseas weather has turned south and it is dry in Bahia, Brazil

Overnight News: The Delta and Southeast will get mostly dry conditions or isolated showers. Temperatures should average near normal. Texas will have mostly dry conditions and mostly near-normal temperatures. The USDA average price is now 77.34 ct/lb.ICE said that certified stocks are now 68,681 bales, from 68,681 bales yesterday.

Chart Trends:  Trends in Cotton are up with objectives of 8270 and 8540 March. Support is at 8040, 7960, and 7870 March, with resistance of 8190, 9020 and 9050 March.

FCOJ 

General Comments:  FCOJ closed a little lower despite reduced production estimates from USDA. The reaction to the report shows that demand is becoming more of a problem for FCOJ. The weather in Florida remains good for the crops although it has been cold recently. The Coronavirus is still promoting consumption of FCOJ at home. Restaurant and food service demand has been much less as no one is dining out. The weather in Florida is good with frequent showers to promote good tree health and fruit formation. Brazil has been too dry and irrigation is being used. Showers are falling in Brazil now and these need to continue to ensure good tree health. However, it could turn warm and dry again next week. Mexican crop conditions are called good with rains.

Overnight News: Florida should get isolated showers or dry conditions. Temperatures will average near normal. Brazil should get scattered showers and near to above normal temperatures. ICE said that 0 notices were posted for delivery against January contracts today and that total deliveries for the month are now 0 contracts.

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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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