COTTON           

General Comments:  Cotton was higher before the next round of USDA production and supply and demand reports that will be released on Friday.  Support came from news tht China and the US re making good progress in the trade talks and that both sides have agreed to scale back tariffs over time once a deal is completed.  Both sides hope to sign an agreement in December.  There are reports that China is buying high quality fiber from Brazil and would like to buy from the US as well once a trade deal is finally done.  Export demand for the US has not been real strong as world economies are turning softer.  The harvest is active.  Quality reports have been high until now and the crop yields appear to be strong.  Western areas are also reporting good quality and yields.  Good quality and yields are being reported in the Delta and Southeast.

Overnight News:  The Delta and Southeast should see dry weather except for some rain late in the week and below normal temperatures.  Texas will have mostly dry conditions this weekend but rain is possible on Thursday and Friday.  Temperatures will be below normal.  The USDA average price is now 61.49 ct/lb.  ICE said that certified stocks are now 42,441 ba1es, from 39,233 bales yesterday.      

Chart Trends:  Trends in Cotton are mixed.  Support is at 6410, 6340, and 6290 December, with resistance of 6500, 6550, and 6570 December.

 

DJ On-Call Cotton - Nov 7

   As of Nov 1. On-call positions represent spot cotton sold to or

purchased from a merchant, based on New York cotton futures contracts

of 500-pound bales. Prices are not yet fixed against these contracts.

Source: CFTC 

   *-denotes changes from the previous week are based on revised data from

last week. 

              Call  Previous   Change       Call  Previous  Change

             Sales                     Purchases

Dec 19       20,689    23,048   -2,359     26,067    27,933  -1,866

Mar 20       30,182    28,661    1,521     11,495    10,803     692

May 20       13,128    13,297     -169      1,318     1,311       7

Jul 20       17,522    17,084      438      2,877     2,588     289

Dec 20       13,004    12,971       33     21,141    21,561    -420

Mar 21        4,061     4,063       -2        632       632       0

May 21        1,632     1,634       -2          0         0       0

Jul 21        2,799     2,802       -3          0         0       0

Dec 21          440       440        0        948       912      36

Mar 22          440       440        0          0         0       0

Total       103,897   104,440     -543     64,478    65,740  -1,262 

              Open      Open   Change

               Int       Int

Dec 19      113,548   118,213   -4,665

Mar 20       86,472    74,586   11,886

May 20       14,096    11,751    2,345

Jul 20       12,512    12,140      372

Dec 20       21,470    19,840    1,630

Mar 21        1,057     1,077      -20

May 21          217       218       -1

Jul 21          278       305      -27

Dec 21          167        94       73

Mar 22            0         0        0

Total       249,817   238,224   11,593

 

FCOJ

General Comments:  FCOJ was near unchanged in consolidation trading.  Today could be uneventful as well as the market really has nowhere to go.  The fundamentals remain negative due to the big production potential and weaker demand ideas.  Demand remains a problem as many now prefer to get Vitamin C in other ways.  Good growing conditions and increased oranges production estimates by USDA have been bearish.  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 irrigation is being used.  Crop yields and quality should be high for Florida this year and USDA could increase production estimates again on Friday. 

Overnight News:  Florida should get mostly dry weather but showers about Friday.  Temperatures will average mostly above normal but below normal this weekend.   Brazil should get mostly dry weather and above normal temperatures.  ICE said that 6 notices were posted for delivery against November contracts and that total deliveries for the month are now 206 contracts.  USDA said that net Upland Cotton export sales were 164,500 bales this year and 118,600 bales next year.  Net Pima sales were 30,000 bales this year and 32,500 bales next year.   

Chart Trends:  Trends in FCOJ are mixed to down with objectives of 93.00 and 85.00 January.  Support is at 96.00, 95.00, and 92.00 January, with resistance at 101.00, 102.00, and 104.00 January.

 

COFFEE 

General Comments:  Futures were higher in both markets on reports of a lack of Coffee on offer and high differentials in Brazil and forecasts for a tropical storm to hit central Vietnam in the next few days.  The central parts of Vietnam are where most of the Coffee is so some losses are possible.  Trends are up in New York and London.  The market has been stronger overall despite ideas of big new crop production in both Brazil and Vietnam as exporters are running tight on supplies.  The Brazilian crop is developing but some exporters say they are out of previous crop supplies to sell.  The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low to provide profits.  Vietnam exports remain behind a year ago, but the market anticipates bigger offers as producers and traders find that they need to move some product.  Brazil forecasts call for scattered showers through the weekend.  Many now anticipate a big crop from Brazil next year.  Vietnam crops are thought to be big despite some uneven growing conditions this year. 

Overnight News:  ICE certified stocks are unchanged today at 2.227 million bags.  The ICO daily average price is now 106.99 ct/lb.  Brazil will get scattered showers and above normal temperatures.  Vietnam will see scattered showers in all areas. 

Chart Trends:  Trends in New York are up with no objectives.  Support is at 103.00, 102.00, and 100.00 December, and resistance is at 109.00, 111.00 and 114.00 December.  Trends in London are up with objectives of 1410 January.   Support is at 1340, 1330, and 1300 January, and resistance is at 1390, 1410, and 1430 January.

 

SUGAR               

General Comments:  Futures closed lower again in both markets.  Ideas of big supplies are not helping the bulls, but those supplies do not appear to be available in the cash market at this time.  Reports indicate that little is on offer from India.  Thailand might also have less this year due to reduced planted area.  However, most think there is still more than enough Sugar for any demand and that India will have to sell sooner or later.  Reports from India indicate that the country is seeing relatively good growing conditions and still holds large inventories from last year.  However, these supplies are apparently not moving and this could be due to less government subsidy for mills and exporters.  Brazil is starting to produce a little more Sugar and a little less Ethanol as mills react to prices and market conditions.  Reports of improving weather in Brazil imply good crops there. 

Overnight News:  Brazil will get scattered showers.  Temperatures should be near to above normal.   

Chart Trends: Trends in New York are mixed to up with objectives of 1280 and 1310 March.  Support is at 1240, 1220, and 1210 March, and resistance is at 1290, 1300, and 1320 March.  Trends in London are mixed.  Support is at 331.00, 327.00, and 324.00 March, and resistance is at 337.00, 340.00, and 345.00 March.

 

COCOA              

General Comments:  Futures closed lower.  Harvest is active in West Africa and reports are that good volumes and quality are expected.  Chart trends are mixed in New York but still mostly down in London.  The reports from West Africa imply that a big harvest is possible in the region.  Ivory Coast arrivals are strong and are above year ago levels.  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 very 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 and are looking to regulate the flow of Cocoa into the world market. 

Overnight News:  Dry conditions or light showers are expected in West Africa.  Temperatures will be near to below 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 3.297 million bags. 

Chart Trends:  Trends in New York are mixed.  Support is at 2410, 2390, and 2370 December, with resistance at 2450, 2510, and 2530 December.  Trends in London are mixed to down with objectives of 1850, 1790, and 1660 December.  Support is at 1870, 1850, and 1830 December, with resistance at 1920, 1940, and 1950 December.

 

DJ Nigeria Could Lose 17% of Cocoa Harvest in 2019-20 Season, Says Industry Body

  By Obafemi Oredein 

  IBADAN, Nigeria-The Cocoa Association of Nigeria said Wednesday that it expects the country to lose 17% of its cocoa crop harvest in the 2019-20 season because of weather problems and disease that have damaged the crop in producing states.

  "Cocoa is scarce across the country at the moment," said CAN President Sayina Riman, due to low production engendered by the bad weather and disease.

  In August, Mr. Riman had said Nigeria expected to produce 305,000 to 310,000 tons of cocoa in the current season that began in September/October.

  He admitted then that rainfall level was high with the likelihood of the black pod disease outbreak hitting cocoa farms and damaging the crop but was optimistic that the production forecast could be met.

  Mr. Riman said the country's southwest region has been hit hard.

  The southwest states of Ogun, Oyo, Osun, Ondo and Ekiti account for 70% of the country's annual cocoa production.

  "Nationally, we are expecting a drop from what I did forecast three months ago. In terms of production we are going to see our forecast of 310,000 tons going down by 17%," said Mr. Riman.

  Rainfall was heavy in September and October causing flooding and the black pod disease in cocoa farms and damaging cocoa crop.

 

 

 

 

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