MORNING SOFTS COMMENTS
Jack Scoville
Tuesday,
October 15, 2019
COTTON
General Comments: Cotton was lower after making new highs for the move. Futures initially moved higher on follow through
buying in reaction to talk that the US and China were close to a partial deal
that would allow agricultural exports to flow to China in exchange for a truce
in the tariff increases. The deal was
announced after the close on Friday but the details were still not known. Futures fell when there was no sign of any
interest in the market from China and as forecasts called for drier weather in
Texas and in the Southeast. The
Southeast was getting a lot of rain yesterday but will now turn drier and ideas
are that any losses will be transient.
Cotton producers hope that China will buy some Cotton from the US but
China has not been doing this. It has
concentrated on Soybeans and Pork purchases instead. The market is still finding support from
deteriorating crop conditions. Weekly
USDA reports still show a tale of two crops with some crops very good to
excellent but some crops very poor. 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.
Overnight News: The
Delta should see showers today and tomorrow in the south,
otherwise mostly dry weather, and Southeast should see showers and storms over
the next couple of days, then drier weather.
Temperatures should be near to below normal. Texas will have mostly dry conditions. Temperatures will be near to above normal. The USDA average price is now 59.36 ct/lb. ICE said that certified stocks are now 10,523
ba1es, from 10,523 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with
objectives of 6460, 6590, and 6650 December.
Support is at 6180, 6080, and 6010 December, with resistance of 6400, 6470,
and 6530 December.
FCOJ
General
Comments: FCOJ was a little higher in
recovery trading. Futures are just below
an important resistance area on the charts and could stay weaker due to the
USDA oranges production report from last week.
It estimated Florida production at 74 million boxes. The weather has been great for the trees as
there have been frequent periods of showers and no hurricanes or other severe
storms so far this year. Some areas have
been dry lately and some irrigation has been used. Crop yields and quality should be high for
Florida this year. Inventories of FCOJ
in the state are high and are about 29% above last year. Rains have started to fall in Brazil and
trees should be flowering now. Dry
conditions have hurt production potential in Mexico.
Overnight
News: Florida should get scattered showers on Friday,
otherwise mostly dry weather.
Temperatures will average near to above normal. Brazil should get scattered showers this
week and drier weather this weekend and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with
objectives of 94.00 November. Support is
at 96.00, 95.00, and 92.00 September, with resistance at 100.00, 101.00, and 104.00
September.
DJ Florida FCOJ Movement and Pack
In mm ps, (million pounds solid).
Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 10/5/2019 Corresponding
Current Week Last
Week Season
10/5/2019 10/6/2018 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 311.95 237.21 31.5%
Retail/Institutional 5.82 5.92 -1.6%
Total 317.77 243.13 30.7%
Pack
Bulk 0.35 0.32 8.3%
Retail/Institutional 1.32 1.08
21.8%
Total Pack 1.67 1.40 18.7%
Reprocessed -1.67 -1.40 18.7%
Pack from Fruit 0.00 0.00 NC
Receipts & Losses
Net Gain or Loss 0.00 -0.07 -99.9%
Imports - Foreign 1.29 0.48 169.0%
Domestic Receipts 0.18 0.02 939.0%
Receipts of Florida Product
from
Non-Reporting Entit 0.00 0.00 NC
Chilled OJ used in FCOJ 0.00 0.00 -100.0%
Reprocessed FCTJ 0.00 0.00 NA
Total Carry Over, Receipt & Pack
Bulk 312.10 236.56
31.9%
Retail/Institutional 7.14 7.00 2.0%
Total 319.24 243.56 31.1%
MOVEMENT
Bulk
Domestic 3.60 4.55 -20.7%
Exports 0.20 0.37 -45.6%
Total (Bulk) 3.81 4.92 -22.6%
Retail/Institutional
Domestic 1.36 1.10 24.0%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.36 1.10 24.0%
Total Movement 5.17 6.02 -14.1%
ENDING INVENTORY
Bulk 308.29 231.64 33.1%
Retail/Institutional 5.79 5.90 -2.0%
Ending Inventory 314.07 237.54 32.2%
Total Same
Total Season Period Last
To Date Season
5-Oct-19 6-Oct-18 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 311.95 237.21 31.5%
Retail/Institutional 5.82 5.92 -1.6%
Total 317.77 243.13 30.7%
Pack
Bulk 0.35 0.32 8.3%
Retail/Institutional 1.32 1.08 21.8%
Total Pack 1.67 1.40 18.7%
Reprocessed -1.67 -1.40 18.7%
Pack from Fruit 0.00 0.00 NC
Receipts & Losses
Net Gain or Loss 0.00 -0.07 -99.9%
Imports - Foreign
1.29 0.48 169.0%
Domestic Receipts 0.18 0.02 939.0%
Receipts of Florida Produ 0.00 0.00 NC
from
Non-Reporting Entit 0.00 0.00 -100.0%
Chilled OJ used in FCOJ 0.00 0.00 NA
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 312.10 236.56 31.9%
Retail/Institutional 7.14 7.00 2.0%
Total 319.24 243.56 31.1%
MOVEMENT
Bulk 3.60 4.55 -20.7%
Domestic 0.20 0.37 -45.6%
Exports 3.81 4.92 -22.6%
Total (Bulk)
Retail/Institutional
Domestic 1.36 1.10 24.0%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.36 1.10 24.0%
Total Movement 5.17 6.02 -14.1%
ENDING INVENTORY
Bulk 308.29 231.64 33.1%
Retail/Institutional 5.79 5.90 -2.0%
Ending Inventory 314.07 237.54 32.2%
COFFEE
General
Comments: Futures were higher in recovery trading and on
ideas that New York was oversold.
Improved weather in Brazil is the main reason for the selling seen in
the markets last week. The Arabica
growing areas got needed rains to start the flowering last week and reports
indicate that flowering is off to a very good start. Many now anticipate a big crop from Brazil
next year. However, there was some
extreme cold and drought conditions earlier in the year that might have
stressed trees and could hurt production potential for this year despite the
good weather now. 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 rains are more moderate now.
The harvest there will be underway soon.
Demand has been quiet over the last couple of weeks. Differentials
have been stable but buyers are not aggressive due to the weaker futures
prices. Certified stocks in New York
keep dropping and suggest that futures remain underpriced when compared to cash
prices.
Overnight News: ICE certified stocks are slightly lower today
at 2.237 million bags. The ICO daily
average price is now 95.61 ct/lb. Brazil
will get dry weather until some showers appear later in the week with above normal
temperatures. Vietnam will see scattered
showers in all areas.
Chart Trends: Trends
in New York are mixed to down with objectives of 90.00 December. Support is at 91.00, 88.00, and 85.00 December,
and resistance is at 98.00, 99.00 and 100.00 December. Trends in London are down with no objectives. Support is at 1210, 1200, and 1170 November,
and resistance is at 1280, 1290, and 1310 November.
SUGAR
General Comments: Futures closed higher but
could not break resistance at 1260 NY March.
Futures are trying to complete a correction after the recent move higher
and have been in a range for a week or so.
Mixed world production news is holding the market at higher levels and
futures held even with weakness in petroleum futures. Europe had a bad Sugarbeet crop and the
effects of the reduced production are now being felt. Reports of improving weather in Brazil imply
good crops there. World petroleum prices
are relatively cheap and are not supporting ethanol demand ideas. Reports from India indicate that the country is
seeing relatively good growing conditions and still holds large inventories
from last 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
means that more Sugar is being produced.
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 and there are reports of crop
losses this year.
Overnight News: Brazil will get mostly dry weather today and
scattered showers starting about Thursday.
Temperatures should be near normal.
Chart Trends: Trends in New York are mixed. Support is at 1220, 1210, and 1190 March, and
resistance is at 1260, 1290, and 1300 March.
Trends in London are mixed.
Support is at 340.00, 337.00, and 335.00 December, and resistance is at
349.00, 355.00, and 357.00 December.
COCOA
General
Comments: Futures closed lower as the West Africa harvest starts to hit the market. The reports from West Africa imply that a big
harvest is possible in the region. Ivory Coast said arrivals were 97,457 tons
this week, from 74,023 tons last year.
Total arrivals are now 132,197 tons, from 103,631 tons last year. The weather in Ivory Coast has improved due to
reports of frequent showers. The
precipitation is a little less now so there are no real concerns about
disease. Ideas are that the next crop
will be good. Both Ivory Coast and Ghana
are doing what they can do boost Cocoa prices and maintain good earnings for
producers by paying a living wage differential.
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 a little lower today at 3.598 million bags.
Chart
Trends: Trends in New York are mixed. Support is at 2410, 2370, and 2340 December,
with resistance at 2500, 2530, and 2560 December. Trends in London are mixed to down with objectives
of 1830 and 1740 December. Support is at
1890, 1870, and 1850 December, with resistance at 1950, 1990, and 2020 December.
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