Softs Report - Wednesday, March 10


General Comments: Futures were sharply lower on fund and other speculative selling that started early in the session and continued after the USDA WASDE reports were released. The chart trends are still mostly down on the daily charts. USDA cut ending stocks slightly by cutting production and also domestic demand. USDAQ said that the domestic industry was slow to rebound after the Coronavirus kept many at home. The demand for US Cotton has been strong even with the Coronavirus. USDA also cut Brazil production due to reduced planted area this year. The US Dollar has started to firm recently and could be hurting demand. The US stock market has been generally firm to help support ideas of a better economy here and potentially increased demand for Cotton products.

Overnight News: The Delta will get scattered showers and above normal temperatures and the Southeast will get mostly dry conditions and above normal temperatures. Texas will have mostly dry conditions or isolat4ed showers and above temperatures. The USDA average price is now 79.50 ct/lb. ICE said that certified stocks are now 99,706 bales, from 99,706 bales yesterday.ICE said that 0 notices were posted for delivery against March contracts and that total deliveries for the month are now 91 contracts.

Chart Trends: Trends in Cotton are down with objectives of 8360 and 8000 May. Support is at 8400, 8280, and 8100 May, with resistance of 8570, 8720, and 8920 May.

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General Comments: FCOJ closed mostly a little lower in range trading. The tone of the market is mixed. USDA cut Florida production once again but raised US production due to increased production in California. Texas estimates were higher than last year but unchanged last month. Some damage to leaves and open flowers was possible in Texas and northern Mexico in the wake of the recent hard freeze, but ideas are that the overall damage was minor. Moderate temperatures are expected for Florida this week. The weather in Florida is good with a few showers to promote good tree health and fruit formation. Showers are falling in Brazil now and crop conditions are called good even with drier than normal soils. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. It is dry in northern and western Mexican growing areas.

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