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MORNING SOFTS COMMENTS

                                       

 

Jack Scoville

 

Tuesday, November 12, 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 higher as USDA cut production and ending stocks for the US in its reports on Friday.  The reports also showed less ending stocks in the world data with exporter nations producing less and China also with smaller ending stocks.  The report was considered supportive to higher prices.  The charts do not necessarily show a bull market but prices have already moved higher for much of the second half of the year.  USDA showed lower yields to account for the lower production as harvested area was left unchanged.  Demand estimates were left unchanged.  US Cotton producers have faced difficult weather all year.  The Texas Panhandle in particular has seen drought and now is seeing very cold and freezing temperatures.  The Southeast has seen rain and then a drought and now is getting below normal temperatures.  The difficult trading conditions are the reason for the lower yields.  Export demand has not been real strong but has been better in recent weeks.  The market still hopes for positive news from the US-China trade talks as US Cotton producers want to sell to China and China has indicated it could buy.  It is currently buying from Brazil to cover some high quality needs.       

Overnight News:  The Delta should see dry weather and below normal temperatures.  The Southeast should get some showers today then turn dry.  Texas will have mostly dry conditions.  Temperatures will be below normal today then trend to near to above normal.  The USDA average price is now 61.65 ct/lb.  ICE said that certified stocks are now 46,985 ba1es, from 42,441 bales yesterday.      

Chart Trends:  Trends in Cotton are mixed.  Support is at 6340, 6290, and 6220 December, with resistance of 6500, 6550, and 6570 December.

 

FCOJ

General Comments:  FCOJ was higher for the week in narrow range trading.  Overall chart patterns are not strong and it is possible that weaker prices are coming.  Futures had held the same range for months but now are starting to look for lower prices and new demand as the US crop appears to be more than big enough.  USDA did not update its production estimates this month but showed strong production last month.  Good growing conditions and increased oranges production estimates by USDA this season 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.  Inventories of FCOJ in the state are high and are more than 32% above last year.    

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 0 notices were posted for delivery against November contracts and that total deliveries for the month are now 206 contracts. 

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 lower on reports of beneficial rains in Brazil and changes in currency relationships.  It looks like offers are not appearing for nearby shipments from Brazil and Vietnam so the market has been rallying looking for business.  The rally continued last week even though CECAFE said that Brazil exported more than 3.0 million bags of Coffee last month..  The rally is coming despite ideas of big new crop production in both Brazil and Vietnam.  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 will need to create new storage space and are expected to do this by selling old crop Coffee.  Vietnam exported 87,497 tons of Coffee in October, from 138,111 tons the previous year.  Reports from Brazil indicate that flowering is off to a very good start.  Rains are expected again in Coffee areas this week.  Overall the Coffee areas remain in a rain deficit but have had some timely rains to start the flowering.  Many now anticipate a big crop from Brazil next year despite stressful conditions earlier.  Vietnam crops are thought to be big despite some uneven growing conditions this year.  A tropical system hit production areas last week but so far there have not been reports of damage or losses.

Overnight News:  ICE certified stocks are slightly higher today at 2.224 million bags.  The ICO daily average price is now 105.46 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 mixed to up with no objectives.  Support is at 106.00, 104.00, and 103.00 December, and resistance is at 110.00, 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.

 

DJ Cecafe: Brazil Coffee Exports Fell 13.1% in Oct.

  By Jeffrey T. Lewis 

  SÃO PAULO--Brazilian coffee exports fell in October from the record for the month set last year, according to exporters group Cecafe.

  The South American country exported 3.4 million 132-pound bags of coffee last month, a decline of 13.1% the same month a year earlier, Cecafe said Monday.

  Sales abroad of the arabica variety of coffee fell 12.8% to 2.8 million bags, while exports of robusta beans decreased 25.7% to 274,001 bags.

  Brazil is the world's biggest producer and exporter of coffee. The country's coffee production, especially of arabica beans, follows a two-year cycle in which the crop is bigger in even-numbered years. Output declines in odd-numbered years, as the coffee plants "rest" from the previous year's effort, and exports can also shrink because farmers have less product to sell.

  Exports of roasted, ground and instant coffee fell 1.9% in October to 321,911 bags, Cecafe said.

 

SUGAR               

General Comments:  Futures closed a little higher in New York and lower in London last week.  Overall charts trends are trying to turn up for the medium term in New York but are indicating price weakness in London.  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.  A major storm was reported in western India and in Pakistan last week that could have affected Sugar and Cotton.  Reports indicate that the worst of the storm did not get into production areas and that any losses or damage should be relatively minor.  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 1270, 1290, and 1300 March.  Trends in London are mixed.  Support is at 332.00, 331.00, and 327.00 March, and resistance is at 338.00, 340.00, and 345.00 March.

 

DJ Brazil Center-South Sugar Crush Up 30.7% at 32.6M Tons in 2H Oct. -- Unica

  By Jeffrey T. Lewis

  SAO PAULO--Brazilian sugar mills in the country's center-south region crushed more cane in the second half of October compared with a year earlier, according to industry group Unica.

  Center-south mills crushed 32.6 million metric tons of cane in the period, a rise of 30.7% from the same period a year earlier. They produced 1.5 million tons of sugar, up 57.8%, and made 2.05 billion liters of ethanol, an increase of 45.4%.

  The production mix for the second half of last month was 32.1% sugar to 67.9% ethanol. A year earlier, the mix was 30.1% sugar and 69.9% ethanol.

  Brazil is the world's biggest sugar producer and exporter, and the center-south grows about 90% of the country's cane.

  In the season from April 1 through Nov. 1, mills in the region crushed 542.9 million tons of cane, up 6.3% from the same period a year earlier. Sugar production rose 3.3% to 25.2 million tons, and ethanol output rose 8% to 29.6 billion liters.

  The production mix for the season through Nov. 1 was 35.1% sugar to 64.9% ethanol. A year earlier, the mix was 35.8% sugar and 64.2% ethanol.

 

COCOA              

General Comments:  Futures closed higher and the weekly charts imply that a significant rally is possible over the next few weeks.  Harvest is now active in West Africa and reports are that good volumes and quality are expected.  The quarterly grind data was mixed and left people wondering how good the demand for chocolate will be.  Ideas are that demand could turn out to be very good due to the current price action.  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.

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 3.261 million bags. 

Chart Trends:  Trends in New York are mixed.  Support is at 2450, 2410, and 2390 December, with resistance at 2530, 2550, and 2560 December.  Trends in London are mixed to up with objectives of 1970 December.  Support is at 1900, 1880, and 1870 December, with resistance at 1940, 1950, and 1990 December.

 

 

 

 

 

 



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