MORNING SOFTS COMMENTS
Jack Scoville
Thursday,
November 14, 2019
COTTON
General Comments: Cotton was a little lower. USDA
showed that harvest progress is now head of the five year average and some
producers have been selling as certified stocks are higher. The increased supply against solid but not
spectacular exports has kept the market from staging a strong rally. Uncertainty about a trade deal with China has
kept some from buying as well. US Cotton
producers have faced difficult weather all year and USDA posted smaller yields
in its production estimates last week.
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 much below normal
temperatures. The difficult growing
conditions are the reason for the lower yields.
Overnight News: The
Delta should see dry weather and below normal temperatures, but trending to
near to above normal by early next week.
The Southeast should get some showers today and tomorrow
then turn dry. Texas will have mostly
dry conditions. Temperatures will be variable
and on both sides of normal. The USDA
average price is now 61.67 ct/lb. ICE said
that certified stocks are now 54,462 ba1es, from 51,114 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 6410, 6390, and 6290 December,
with resistance of 6500, 6550, and 6570 December.
FCOJ
General
Comments: FCOJ was higher as cold
weather moves into Florida. It might not
damage crops this time, but this is a record cold air mass in the north and
reminds speculators that it is time to start buying before the freeze season.. Overall chart patterns are not strong but
futures are still in a range. 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. Cold weather
has invaded the eastern two thirds of the US and temperatures in most areas are
much below normal. However, Florida
should escape as temperatures are forecast to stay above freezing. More moderate temperatures should return in
the next couple of days. Crop yields and
quality should be high for Florida this year.
Inventories of FCOJ in the state are high and are more than 33% above
last year.
Overnight
News: Florida should get scattered showers this week and mostly
dry weather this weekend. 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 higher yesterday on a lack of
offer in the market. It looks like
offers are not appearing for nearby shipments from Brazil and Vietnam so the
market has been rallying looking for business.
There is just not much on offer right now as Brazil exporters say they
are running out of supplies from previous crops and as Vietnamese sellers are
not selling. The Brazilian crop is
developing as rains have recently improved.
Reports from Brazil indicate that flowering is off to a very good
start. Rains are expected again in
Coffee areas this week. 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 prices
move higher. Vietnam crops are thought
to be big despite some uneven growing conditions this year. However, recent rains have
probably damage some coffee and caused at least minor losses.
Overnight News: ICE certified stocks are lower today at 2.195
million bags. The ICO daily average
price is now 107.20 ct/lb. Brazil will
get scattered showers this week and dry weather this weekend and above normal
temperatures. Scattered showers are
forecast for next week. Vietnam will see
scattered showers in all areas, but trends are a little drier now.
Chart Trends: Trends
in New York are mixed to up with no objectives.
Support is at 105.00, 104.00, and 103.00 December, and resistance is at 108.00,
110.00 and 111.00 December. Trends in
London are mixed to up with objectives of 1410 January. Support is at 1380, 1360, and 1340 January,
and resistance is at 1410, 1430, and 1460 January.
SUGAR
General Comments: Futures closed higher in both New York and
London yesterday. Overall charts trends
are turning up for the medium term in New York and are turning sideways in
London. Ideas of tight offers even with
a weaker Real are supporting Raw Sugar.
The Real is now very close to recent lows but has stalled at these
levels. White Sugar is the weaker market
on ideas of big supplies and little demand in Europe but the supply ideas could
start to change in the near term.
Reports indicate that little is on offer from India. 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.
Overnight News: Brazil will get scattered showers this week
and dry weather this weekend. Scattered
showers are forecast for next week.
Temperatures should be near to above normal.
Chart Trends: Trends in New York are up
with objectives of 1310 March. Support
is at 1260, 1240, and 1230 March, and resistance is at 1290, 1300, and 1320 March. Trends in London are mixed. Support is at 337.00, 333.00, and 331.00 March,
and resistance is at 345.00, 348.00, and 351.00 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 again
and the market has moved to new contract highs.
Ideas of less offer at this time are supporting futures. Harvest is now active in West Africa and
reports are that good volumes and quality are expected. 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: Scattered showers are expected in West
Africa. Temperatures will be near to above
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 3.232
million bags.
Chart
Trends: Trends in New York are up with objectives of
2850 December. Support is at 2650, 2600,
and 2570 December, with resistance at 2740, 2800, and 2840 December. Trends in London are up with objectives of
2290 December. Support is at 1990, 1950,
and 1940 December, with resistance at 2110, 2140, and 2170 December.
DJ Nigeria Welcomes Ghana President's Call to
Participate in Cocoa Price Agreement
By Obafemi
Oredein
IBADAN,
Nigeria--Nigeria's national cocoa organization said Wednesday that it welcomes
the move by Ghana and Ivory Coast to include both Nigeria and Cameroon--which
jointly produce over 600,000 tons of cocoa a year--in a minimum cocoa price
agreement.
In June, Ghana and Ivory Coast--which together
produce about 65% of the world's cocoa--agreed on a price floor agreement of
$2,600 a ton, later adding that buyers would pay an additional $400 in support
of a living income differential for cocoa farmers.
Ghana's
President Nana Akufo-Addo said Tuesday that Ghana was ready to liaise with
other regional cocoa producers to participate in the agreement.
"Structural issues have to be addressed first," Mr. Akufo-Addo
said, noting Nigeria's lack of a marketing board, "but such an association
has to be the way forward."
Cocoa
Association of Nigeria President Sayina Riman said in June that Nigeria and
Cameroon--which together account for over 10% of global cocoa production--were
not consulted before the $2,600 cocoa price and the $400 LID were agreed upon,
but that is it a "welcome development" to have now been invited.
Asked if
Nigeria and Cameroon would attend a meeting to discuss the cocoa floor price
agreement, Mr. Riman said: "We will be happy to be at the meeting. We want
to make sure that the price floor issue works for the benefit of the entire
industry."
141 W. Jackson Blvd. Suite 1920, Chicago, IL 60604
| (800) 769-7021 | (312) 264-4322 (Direct)
| www.pricegroup.com
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.
The Price
Futures Group, its officers, directors, employees, and brokers may in the
normal course of business have positions, which may or may not agree with the
opinions expressed in this report. Any decision to purchase or sell as a result
of the opinions expressed in this report will be the full responsibility of the
person authorizing such transaction. Reproduction and/or distribution of any
portion of this report are strictly prohibited without the written permission
of the author.
To SUBSCRIBE to Morning Softs please click here.
To Unsubscribe from Morning Softs please
click here.
Click Here to View the Morning Softs Archives