Softs Report - Wednesday, June 3

COTTON
General Comments Cotton was higher. It was partly a weather market as growing conditions are still difficult in the Texas Panhandle. Support is coming from improved demand for US Cotton, but this demand has started to fade. Export sales were poor last week. There is concern that China will stop fulfilling its obligations in the Phase One trade deal due to ramped up US rhetoric on the Chinese response to the Coronavirus epidemic and now the unrest in Hong Kong. The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks. 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.
Overnight News: The Delta will get mostly dry conditions and Southeast will get mostly dry conditions. Temperatures should be mostly above normal. Texas will have dry conditions or isolated showers. Temperatures will average near normal. The USDA average price is now 55.87 ct/lb. ICE said that certified stocks are now 11,279 bales, from 10,123 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 6670 July. Support is at 5980, 5940, and 5730 July, with resistance of 6120, 6220 and 6150 July.

FCOJ
General Comments: FCOJ was higher. Trends are still mostly up in the market. 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. Oranges production was estimated as less in the latest USDA reports at below 70 million boxes, so supplies available to the market are somewhat reduced. Inventories in cold storage remain solid so there will be FCOJ to meet the demand. There is increasing 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. Southern areas are cool and have seen a few showers. The Valencia harvest is in full swing. More signs of growth on trees are reported. Brazil has been dry and irrigation has been used.
Overnight News: Florida should get periods of showers. Temperatures will average near normal. Brazil should get dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 123.00, 122.00, and 120.00 July, with resistance at 140.00, 133.00, and 136.00 July.

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