Softs Report - Wednesday, Sept. 16


General Comments: Cotton closed a little lower as ideas of weak demand battled weather concerns as Hurricane Sally was expected to come onshore from the Gulf of Mexico near the Louisiana-Mississippi border area and then curve into the Delta and Southeast. The storm is expected to drop a lot of rain on the open bolls in Alabama and Georgia and perhaps bring some wind to these areas as well. The rain could damage the fiber in the open bolls. Demand has improved over the last couple of weeks but remains at depressed levels. It was a supply-side rally. Demand should stay a week as long as the Coronavirus is a feature of life around the world. Shopping is hard to do and many people are still unemployed. This is especially true for the US but it is true to some degree in just about all countries. The Harvest is still way down the road and the tropical season is active. There will be more chances to inflict more damage on the crops to help try to rally prices.

Overnight News: The Delta will get scattered showers and the Southeast will get big rains from Hurricane Sally. Temperatures should be near to above normal. Texas will have scattered showers. Temperatures will average below normal. The USDA average price is now 60.18 ct/lb. ICE said that certified stocks are now 5,912 bales, from 5,913 bales yesterday.

Chart Trends: Trends in Cotton are mixed to up with objectives of 6820, 6860, and 6870 December. Support is at 6550, 6430, and 6330 December, with the resistance of 6690, 6720, and 6840 December.


General Comments: FCOJ was a little lower in light volume trading. The daily and weekly charts show that trends are starting to turn down again. No hurricanes have hit Florida yet. The systems have all gone south into the Gulf of Mexico or north into the Carolinas. That usually means lower prices for futures but prices are already relatively cheap. The Coronavirus is still promoting the consumption of FCOJ at home. Restaurant and foodservice demand has been much less as no one is really dining out. Florida production prospects for the new crop were hurt by an extended flowering period, but the weather is good now with frequent showers to promote good tree health and fruit formation. Import demand to the US should be minimal as US prices remain below those of Europe. Brazil has been too dry and irrigation is being used. Some showers are in the region now to help in Sao Paulo.

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Disclaimer: Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also ...

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