Softs Report - Thursday, Sept. 16


General Comments: Futures were a little lower as Hurricane Nicholas came on shore near Houston and threatened to bring some big rains to Cotton production areas in the Delta and Southeast. More bolls are open now so there is a better chance for damage to or loss of fiber. The demand is expected to be strong from Asian countries as world economies recover from Covid lockdowns. Analysts say the demand is still very strong and likely to hold at high levels for the future. A weaker US Dollar yesterday helped demand ideas. However, the expansion of the Delta variant has given pause to the better demand ideas due to fears of economies here and around the world starting to partially lockdown again. Production ideas are being impacted in just about all areas due to the weather extremes. It has been very hot in parts of Texas and the Delta and Southeast have had drenching rains at various times in the last couple of months. Even so, good US production totals are expected.

Overnight News: The Delta will get isolated showers with some big rains possible in the south and near-normal temperatures and the Southeast will get isolated to scattered showers and near to above normal temperatures. Texas will have isolated showers or dry conditions and above normal temperatures. The USDA average price is now 90.85 ct/lb. ICE said that certified stocks are now 63,515 bales, from 63,515 bales yesterday. USDA said that net Upland Cotton export sales were 284,800 bales this year and 0 bales next year. Net Pima sales were 9,600 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 9250, 9200, and 9180 December, with a resistance of 9510, 9600, and 9670 December.


General Comments: FCOJ closed higher yesterday on weather concerns, especially for Brazil but also for Florida and Mexico. Futures broke through recent highs and trends are turning up in this market. A freeze hit Sao Paulo state several weeks ago and reports of significant losses are being heard. Weather conditions in Florida are rated mostly good for the crops with scattered showers and near-normal temperatures. Mexican crop conditions in central and southern areas are called good with rains, but earlier dry weather might have hurt production. Northeastern Mexico areas are too dry, but the rest of northern and western Mexico are rated in good condition.

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