Softs Report - Wednesday, July 6

brown coffee beans on brown wooden table

Photo by Anastasiia Chepinska on Unsplash

COTTON
General Comments: Cotton was sharply lower yesterday on fund selling as the funds continued to liquidate positions due to a trend change in the charts and general economic weakness here in the US and overseas. There continues to be the talk of a big recession here in the US and around the world. Traders worry that the continued Chinese lockdowns will hurt demand for imported Cotton for that country and that a weaker economy in the west will hurt demand from the rest of the world. There are forecasts for hot and dry weather to return this week after some showers in West Texas and the rest of the Great Plains over the last couple of weeks. The crop condition ratings by USDA are better than expected after a very hot and dry period in West Texas and the rest of the western Great Plains. The Indian weather is cooler and wetter and conditions appear good. Chinese demand could become less due to the Covid lockdowns there be trimming imports due to Covid and has closed a number of cities as the Covid spreads through the nation. The cities and ports are shut down again as Covid returns.
Overnight News: The Delta will get isolat4ed showers and near to above normal temperatures and Southeast will get scattered showers and above normal temperatures. Texas will have mostly dry conditions and above-normal temperatures. The USDA average price is now 106.02 ct/lb. ICE said that certified stocks are now 15,191 bales, from 13,733 bales yesterday. ICE NY said that 15 notices were posted for delivery against July contracts and that total deliveries for the month are now 143 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 90.90, 89.70, and 88.50 December, with resistance of 99.50, 100.80 and 103.20 December.

FCOJ
General Comments: FCOJ was lower yesterday on fund selling tied to ideas that physical products were too high priced and that a recession was coming. The funds were big sellers in just about all markets yesterday. The recent market weakness has been dramatic since the market made new contract highs earlier this month. The weather remains generally good for production around the world for the next crop. Brazil has some rain and conditions are rated good. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures. The Florida FCOJ movement and pack report showed that inventories are more than 24% below last year. Nielsen said that 29.22 million gallons of FCOJ were sold through June 16, the lowest volume since October 2019. Volumes are now 23% below those of last year.
Overnight News: Florida should get isolated showers. Temperatures will average near to above normal. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 contracts were poste for delivery against July futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 163.00 and 157.00 September. Support is at 161.00, 158.00, and 155.00 September, with resistance at 170.00, 175.00, and 179.00 September.

COFFEE
General Comments: New York and London closed lower yesterday as the US Dollar moved sharply higher and fears of a recession returned. The funds were the best sellers and sold in all commodities yesterday. Futures remain rather cheap and certified stocks keep dropping.. Demand for Coffee overall is thought to be less as the world economic situation changes for the worse but the strong cash market means that even less Coffee is on offer. There is less Coffee on offer from origin, with Brazil offering less and Central America and Vietnam offering less as well. Temperatures are near to above normal in Brazil and there are no forecasts for frosts or freezes in the short term.
Overnight News: ICE certified stocks are lower today at 0.823 million bags. The ICO daily average price is now 192.30 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 13 contracts were tendered for delivery against July futures and that total deliveries for the month are 13 contracts.
Chart Trends: Trends in New York are mixed. Support is at 219.00, 216.00, and 212.00 September, and resistance is at 228.00, 231.00 and 236.00 September. Trends in London are down with objectives of 1960 and 1900 September. Support is at 1960, 1940, and 1910 September, and resistance is at 2000, 2020, and 2060 September,

SUGAR
General Comments: New York and London closed lower yesterday on selling that hit all pits. Selling came from ideas that a recession for the world is just around the corner and this was reinforced by a major rally in the US Dollar. The selling could run through the market again today or else the funds could rest as they have already liquidated a lot of positions. White Sugar supplies and production are short right now. New York Raw Sugar and London White Sugar trends are sideways to perhaps up in London on the daily charts. India is reported to have a big crop of Sugarcane coming and as Brazil is harvesting its crop of Sugarcane and turning most of it into Ethanol but some Sugar is making it into export channels. Ethanol demand ideas were hurt yesterday due to big weakness in Crude Oil futures. Sugar production from these countries is expected to be surplus or at least in line with demand. Thailand is still offering and exporting. Reports from India indicated that conditions are generally good for Sugar production. The Indian weather service is predicting a normal monsoon season this year.
Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to below normal. India will get isolated showers in eastern areas and near to above normal temperatures.
Chart Trends: Trends in New York are down with objectives of 1720 October. Support is at 1760, 1750, and 1740 October and resistance is at 1810, 1840, and 1870 October. Trends in London are mixed. Support is at 519.00, 510.00, and 508.00 October and resistance is at 537.00, 540.00, and 544.00 October.

COCOA
General Comments: New York was lower and London was higher yesterday and trends are still down on the daily charts in New York on weak demand ideas. Selling came from ideas that a recession for the world is just around the corner and this was reinforced by a major rally in the US Dollar. The selling could run through the market again today or else the funds could rest as they have already liquidated a lot of positions. Reports of sun and dry weather along with very good soil moisture keep big production ideas alive in Ivory Coast. Some very good rains were reported last week. Ideas are still that good production is expected from West Africa for the year. The weather is good for harvest activities in West Africa. Current reports from Ivory Coast indicate that the weather is a good mix of sun and rain so a good midcrop production is expected. The weather is good in Southeast Asia.
Overnight News: Scattered showers are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near to below normal temperatures. ICE certified stocks are higher today at 5.561 million bags. ICE NY said that 0 contracts were posted for delivery against July contracts and that total deliveries for the month are now 2,356 contracts.
Chart Trends: Trends in New York are down with no objectives. Support is at 2260, 2230, and 2200 September, with resistance at 2350, 2400, and 2430 September. Trends in London are mixed. Support is at 1690, 1680, and 1650 September, with resistance at 1750, 1780, and 1790 September.


More By This Author:

Grains Report - Wednesday, July 6
Softs Report - Friday, July 1
Softs Report - Wednesday, June 29

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 ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments