MORNING SOFTS COMMENTS
Jack Scoville
Tuesday,
October 08, 2019
COTTON
General Comments: Cotton was a little higher in consolidation trading. The USDA crop progress reports showed good
progress, but the condition report was much more mixed as some crops got better
and some got worse. This trend has been
a feature of the market all year as the Texas Panhandle and nearby areas have
been very hot and dry for a big part of the growing season. Crops in the southeast have seen perhaps too
much rain and much cooler weather. These
trends have changed in the last couple of weeks and now Texas if getting a
little rain while the Southeast has seen record heat and a drought has started
to develop. The weekly report showed
increased stress in the southeast last week.
Some rains were seen in the Southeast over the weekend and temperatures
have now moderated. The export demand
remains weak. World demand has been weak
in part due to the US-China tensions and fears of a recession or at least a
global economic slowdown are keeping buyers away. World prices are weak.
Overnight News: The
Delta should see mostly dry weather and Southeast should see mostly dry weather. Temperatures should be near to above normal. Texas
will have mostly dry conditions.
Temperatures will be mostly below normal. The USDA average price is now 58.97
ct/lb. ICE said that certified stocks are
now 11,136 ba1es, from 11,136 bales yesterday.
ICE said that 0 notices were posted for delivery against October
contracts and that total deliveries for the month are now 13 contracts.
Chart Trends: Trends in Cotton are mixed to up with
objectives of 6190, 6290, and 6590 December.
Support is at 6070, 6010, and 5970 December, with resistance of 6220, 6290,
and 6340 December.
Crop Progress
|
|
|
|
|
|
Date
|
6-Oct
|
29-Sep
|
2018
|
Avg
|
|
Cotton Bolls Opening
|
83
|
77
|
76
|
75
|
|
Cotton Harvested
|
25
|
16
|
24
|
20
|
|
Crop Condition
|
|
|
|
|
|
|
Very
Poor
|
Poor
|
Fair
|
Good
|
Excellent
|
Cotton This Week
|
4
|
15
|
42
|
32
|
7
|
Cotton Last Week
|
3
|
17
|
40
|
34
|
6
|
Cotton Last Year
|
6
|
19
|
33
|
32
|
10
|
FCOJ
General
Comments: FCOJ was higher last week and
short term trends turned up. There are
no threats out in the ocean right now but the state of Florida has been dry. Many are expecting increased production
estimates from Florida on Thursday when USDA releases its next production
reports but the drier weather could mean reduced fruit sizes and less than
expected production. Chart patterns are
mixed. Inventories in Florida are still
29% above a year ago. Fruit for the next
crop is developing and harvest will be starting soon. Crop conditions are called good as irrigation
is being used. The dry season there seems
to be starting now. Rains are reported in Brazil to start flowering for the
next crop.
Overnight
News: Florida should get scattered showers. Temperatures will average near to above
normal. Brazil should get scattered
showers and above normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of
104.00 and 105.00 November. Support is
at 100.00, 98.00, and 96.00 September, with resistance at 105.00, 106.00, and 108.00
September.
COFFEE
General
Comments: New York and London both
closed lower on what appeared to be fund selling. Trends turned down in the markets and the
funds sold. The weather has been dry in
Brazil but rains are being reported now.
The weather is also reported to be good in Viettnam. The Arabica growing areas got needed rains to
start the flowering last week and more rains were reported over the weekend and
are expected this week. Vietnam crops
are thought to be big despite some uneven growing conditions this year. It has been warm and dry at times, then the
growing areas have seen some very heavy rains.
The harvest there will be underway soon.
Demand has been increasing over the last few weeks. Differentials have been stable. Certified stocks in New York keep dropping
and suggest that futures remain underpriced when compared to cash prices.
Overnight News: ICE certified stocks are lower today at 2.260
million bags. The ICO daily average
price is now 97.00 ct/lb. Brazil will
get showers with above normal temperatures.
Vietnam will see scattered showers in all areas.
Chart Trends: Trends
in New York are down with objectives of 94.00, 93.00, and 90.00 December. Support is at 95.00, 94.00, and 91.00 December,
and resistance is at 100.00, 102.00 and 103.00 December. Trends in London are down with objectives of
1220 November. Support is at 1230, 1200,
and 1170 November, and resistance is at 1290, 1310, and 1320 November.
SUGAR
General Comments: New York closed lower in both
markets on what appeared to be fund selling.
Ideas of improving weather in Brazil supported the sellers. Reports from India indicate that the country
still has a large surplus of White Sugar that probably must be exported even if
production is below expectations for this year.
The weather there has improved with the monsoon and some areas are
seeing some excessive rains. Brazil
mills are refining mostly for ethanol right now as has been the case all season
but weakness in the petroleum markets could mean that more Sugar is being
produced. The fundamentals still suggest
big supplies, and the weather in Brazil is good enough and India has improved
as the monsoon was late but brought ample rains in the end. The weather has been much more uneven in
production areas from Russia into western Europe. Those areas had a very hot and dry start to
the growing season. Better weather was
seen in early August then it turned hot and dry again. These areas need more rain and some cooler
weather to provide better conditions for the final development of the
crops.
Overnight News: Brazil will get scattered showers. Temperatures should be near normal.
Chart Trends: Trends in New York are down
with objectives of 1230 and 1190 March.
Support is at 1230, 1210, and 1190 March, and resistance is at 1260, 1290,
and 1300 March. Trends in London are
mixed to down with objectives of 331.00 and 322.00 December. Support is at 335.00, 331.00, and 326.00 December,
and resistance is at 341.00, 344.00, and 349.00 December.
COCOA
General
Comments: Futures closed lower and trends are starting to turn down. The reports from West Africa imply that a big
harvest is starting to be harvested. The weather in Ivory Coast has improved due
to reports of frequent showers. There
were reports last week that Ivory Coast is moving to regulate production with
the aim of supporting higher prices to the market. How they plan to do this is not yet known,
but both Ivory Coast and Ghana are doing what they can do boost Cocoa prices
and maintain good earnings for producers.
Growing and harvesting conditions in Asia are also reported to be
good. The harvest is ongoing amid
somewhat drier weather. More and more
Asian Cocoa has been staying at home and processed in Indonesia for export in
the region. Demand in Asia has been
growing and Indonesia has been eager to be the primary source of Cocoa.
Overnight
News: Scattered showers and storms are expected in
West Africa. Temperatures will be on
both sides of normal. Malaysia and
Indonesia should see showers.
Temperatures should average above normal. Brazil will get mostly dry conditions and
near to above normal temperatures. ICE
certified stocks are lower today at 3.678 million bags. Ivory Coast arrivals were 34,740 tons last
week, from 28,928 tons last year.
Chart
Trends: Trends in New York are down with objectives
of 2370 and 2270 December. Support is at
2370, 2340, and 2320 December, with resistance at 2440, 2480, and 2510 December. Trends in London are mixed. Support is at 1890, 1870, and 1850 December,
with resistance at 1950, 1990, and 2020 December.
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