Tuesday Softs Report

General Comments: Cotton closed higher after testing recent lows. Harvest is ongoing amid drier weather conditions in West Texas and the Delta and Southeast. Reports indicate that some Cotton could have been damaged in Georgia and the Carolinas and into eastern Virginia due to the excessive winds and rains caused by the hurricanes. The rains and winds could have damaged fiber and blown fiber out of the bolls. Export demand has held strong despite stay at home orders and weaker economies around the world. Traders now hope for even more demand later as the vaccines are given out and the world economies start to recover.
Overnight News: The Delta and Southeast will get mostly dry conditions except for some showers on Friday in the Delta. Temperatures should average near to below normal in the Delta and in the Southeast. Texas will have mostly dry conditions or isolated showers and above normal temperatures. The USDA average price is now 68.02 ct/lb. ICE said that certified stocks are now 100,390 bales, from 100,647 bales yesterday. ICE said that 10 notices were posted for delivery against December contracts and that total deliveries for the month are now 318 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 7100, 7020, and 6890 March, with resistance of 7350, 7430 and 7470 March.

DJ Thailand’s Cotton Imports May Increase, USDA Says — Market Talk
0415 GMT – Thailand’s 2020-21 cotton imports are expected to increase 4% on year to 730 thousand bales due to a gradual economic downturn caused by the Covid-19 pandemic, the U.S. Department of Agriculture says. Imports of cotton saw a sharp fall at the start of the year as spinning mills reportedly lowered their cotton yarn inventories and cotton and cotton-blended yarn production decreased by 28% and 44%, respectively. (lucy.craymer@wsj.com)

General Comments: FCOJ was lower on what appeared to be follow through selling from speculators. Florida has been spared any hurricanes or other serious storms this year. 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, but showers are falling in Brazil now and these need to continue to ensure good tree health. However, it could turn warm and dry again this week. Mexican crop conditions are called good with rains.
Overnight News: Florida should get isolated showers or dry conditions. Temperatures will average below normal. Brazil should get scattered showers and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 120.00, 118.00, and 113.00 January, with resistance at 124.00, 125.00, and 127.00 January.

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