Softs Report - Wednesday, Oct. 12

General Comments: Cotton closed higher on follow-through buying tied in part to news that China would honor its WTO commitments for Cotton import quotas. The news was bullish for a market that has been starved for demand news for a while. Traders are worried about a global recession and demand in that recession. Production is very short. The harvest is appearing in the market, and the market is preparing for it with sideways to lower prices. The trade is still worried about demand moving forward due to recession fears and Chinese lockdowns but is also worried about total US production potential. It is possible that the continued Chinese lockdowns will continue to 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.
Overnight News: The Delta and Southeast will get mostly dry conditions or isolated showers and near to above normal temperatures. The Southeast will get some heavy rains from the hurricane on Friday and Saturday. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 89.09 ct/lb. ICE said that certified stocks are now 880 bales, from 2,109 bales yesterday. ICE aid that 0 notices were posted against October contracts and that total deliveries for the month are now 12 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 84.80, 81.40, and 80.20 December, with resistance of 88.90, 90.10 and 90.30 December.

selective focus photo of plant

Image Source: Unsplash

General Comments: FCOJ was higher yesterday and futures held support areas in range trading as 1major hurricane that moved onshore Florida last week left extensive damage. Much of the damage is already factored into prices, but the market is holding at elevated levels. Some of the damaged fruit is being collected and sent to FCOJ processors so supply is increasing and prices can work somewhat lower. The weather remains generally good for production around the world for the next crop but not for production areas in Florida that have been impacted in a big way by the storm. Brazil has some rain and conditions are rated good. More showers are in the forecast for the coming days. Florida damage is expected to be very big, with many trees lost as well as fruit lost. Mexican areas are showing mixed trends, with dry weather in some northern areas but better weather to the south.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 185.00, 184.00, and 179.00 November, with resistance at 196.00, 202.00, and 204.00 November.

General Comments: New York and London closed a little lower yesterday in quiet trading on what appeared to be new speculative selling on ideas and reports of improving growing conditions in Brazil. Small offers in Arabica are reported from Brazil. There is a threat for a third year of La Nina which could negatively affect Coffee production again next year but so far the crop conditions are called good. Some beneficial precipitation was reported in Brazil last week. More showers and rains are in the forecast in Brazil Coffee areas for this week. Vietnam has also been dry and wire reports from there indicate that production losses are likely. The cash market remains strong for Arabica and the demand for certified stocks from the exchange remains a price positive factor.
Overnight News: ICE certified stocks are unchanged today at 0.416 million bags. The ICO daily average price is now 191.62 ct/lb. Brazil will get scattered showers with near normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are mixed to with objectives of 206.00, 205.00, and 191.00 December. Support is at 214.00, 211.00, and 210.00 December, and resistance is at 222.00, 226.00 and 230.00 December. Trends in London are mixed to down with objectives of 2120 and 2020 November. Support is at 2100, 2050, and 2010 November, and resistance is at 2170, 2190, and 2220 November.

General Comments: New York and London closed higher yesterday in moderate volume trading. Crude Oil was lower again after a strong rally last week based on news reports that OPEC and Russia would institute a production cut to keep prices elevated. Ethanol demand should increase and the pricing power of the mills can increase. The New York market had been worried that reduced ethanol demand due to taxing policies in Brazil will force mills down there to continue to produce more Sugar for export and Crude Oil futures have been weaker until recently. The Brazilian president has lowered the fuel taxes in Brazil, and this is squeezing the profit margins of the mills. The mills could produce much more Sugar over time due to the tax changes but so far have not produced enough to meet the demand. The London market had been looking for increased White Sugar supplies from origin as EU production was reduced by a hot and dry Summer. Indian White Sugar exports have so far not been enough to meet the demand. UNICA said that the center-south Sugar crush was 25.3 million tons for the second half of September, down 28.7% from last year.
Overnight News: Brazil will get scattered showers. Temperatures should average near to above normal. India will get scattered showers in the east and near to below normal temperatures.
Chart Trends: Trends in New York are mixed to up with objectives of 1890 and 1970 March. Support is at 1830, 1810, and 1790 March and resistance is at 1880, 1920, and 1940 March. Trends in London are up with no objectives. Support is at 547.00, 540.00, and 531.00 December and resistance is at 563.00, 566.00, and 572.00 December.

General Comments: New York and London closed lower again yesterday on what appeared to be some follow through speculative selling. Futures prices might have formed at least a short term top. Ideas of big production and uncertain demand are still around but reports from Africa indicate that demand has improved lately. Reports indicate that buyers of Cocoa have enough coverage for now and can afford to wait for lower prices to develop. Supplies of Cocoa are as large as they will be now for the rest of the marketing year. Reports of scattered showers along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. Ideas are still that good production is expected from West Africa for the year. The weather is good in West Africa. The weather is good in Southeast Asia.
Overnight News: Isolated 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 normal temperatures. ICE certified stocks are lower today at 5.589 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2310 and 2250 December. Support is at 2320, 2300, and 2240 December, with resistance at 2370, 2420, and 2430 December. Trends in London are mixed. Support is at 1970, 1940, and 1920 December, with resistance at 2030, 2060, and 2090 December.

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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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