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MORNING SOFTS COMMENTS

                                       

 

Jack Scoville

 

Tuesday, October 15, 2019

 

 


Price Futures Group, CBOT

Chicago, IL

(312) 264-4322

jscoville@pricegroup.com

 

JSL, SA de CV

San Salvador, El Salvador (503) 2260-7806 jslsadecv@comcast.net

 

JSL, SA

jslsa@comcast.net


 

 

 

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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Past performance is not indicative of future results. Investing in futures can involve substantial risk & is not for everyone. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures.

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