Morning Softs Comments

MORNING SOFTS COMMENTS

Tuesday, September 10, 2019Jack Scoville

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 a little higher but held inside the recent trading range.  It is possible that futures are trying to form a bottom at this time.  USDA lowered crop condition ratings in a significant way in part due to Hurricane Dorian and the big rains and winds it brought to the Carolinas.  The hurricane passed through the Carolinas late last week.  Bolls are starting to open now and the fiber could be colored or could the bolls could drop if there is enough wind.  Conditions in the Texas Panhandle have improved with some recent showers and ideas are that production potential had been stabilized.  Texas crops have been hurt by continued hot and dry weather, although the Panhandle region has seen some rains lately.  It has been a relentless move lower since April and the entire down move now extends to the early summer of 2018.  Traders are anticipating bearish USDA reports this week.    Production is expected to be lower due to earlier bad weather in the Texas Panhandle.  Demand could be cut even more as export demand in general has been weak and ending stocks for the current and the next crop years could be increased.  Demand remains a real problem for the market as export sales overall have been poor.  The world market remains quiet with very limited Chinese buying interest anywhere.

Overnight News:  The Delta should be dry and Southeast should see dry conditions.  Temperatures should be mostly above normal.  Texas will have showers.  Temperatures will be variable.  The USDA average price is now 55.33 ct/lb.  ICE said that certified stocks are now 12,802 ba1es, from 12,802 bales yesterday.

Chart Trends:  Trends in Cotton are mixed.  Support is at 5800, 5750, and 5720 December, with resistance of 6000, 6020, and 6170 December.

 

Crop Progress
Date 8-Sep 1-Sep 2018 Avg
Cotton Bolls Opening 43 36 38 37
Cotton Harvested 7 9 8
Crop Condition
Very Poor Poor Fair Good Excellent
Cotton This Week 3 15 39 37 6
Cotton Last Week 1 14 37 39 9
Cotton Last Year 13 21 28 29 9

 

FCOJ

General Comments:  FCOJ was narrowly mixed in light volume trading.  Hurricane Dorian missed most of Florida but forecasters are keeping an eye on a couple new systems in the ocean.  One does not look like it will be a threat to the state but the one farther out to sea has a chance to develop.  Its movement track is unclear right now.  It is the high point in the hurricane season so hurricane forecasts will capture much attention from the trade.  Chart patterns have turned mixed in response to the hurricane threat that appeared last week and the potential for more systems to form in the short term.  The weather in Florida had been good as the state has seen frequent showers and storms that have aided in development in the fruit but it will be mostly dry this week.  Inventories in Florida are still well above a year ago.  Fruit for the next crop is developing and are as big as baseballs.  Crop conditions are called good.

Overnight News:  Florida should get mostly dry conditions.  Heavy rain is possible in eastern coastal areas from the hurricane today.  Temperatures will average near to above normal.   Brazil should get mostly dry weather and near to below normal temperatures.  ICE said that 0 notices were posted for delivery against September FCOJ contracts and that total deliveries for the month are now 0 contracts.

Chart Trends:  Trends in FCOJ are mixed.  Support is at 101.00, 98.00, and 97.00 September, with resistance at 105.00, 108.00, and 110.00 September.

DJ Florida FCOJ Movement and Pack – Sep 9

In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)

WEEK ENDING:

8/24/2019                                  Corresponding

Current        Week Last

Week           Season

8/24/2019        8/25/2018   % Change

CARRY OVER, RECEIPT & PACK

Carry Over

Bulk                            311.43           258.18      20.6%

Retail/Institutional              5.79             6.09      -5.0%

Total                           317.21           264.27      20.0%

Pack

Bulk                              0.38             0.45     -15.2%

Retail/Institutional              1.56             1.31      19.6%

Total Pack                        1.94             1.75      10.7%

Reprocessed                      -1.94            -1.75      10.7%

Pack from Fruit                   0.00             0.00         NC

Receipts & Losses

Net Gain or Loss                 -0.11            -0.03     243.7%

Imports – Foreign                 6.47             1.81     257.3%

Domestic Receipts                 0.00             0.00         NC

Receipts of Florida Product

from Non-Reporting Entit         0.00             0.00         NC

Chilled OJ used in FCOJ           0.13             0.06     112.5%

Reprocessed FCTJ                  0.04             0.00         NA

Total Carry Over, Receipt & Pack

Bulk                            316.38           258.71      22.3%

Retail/Institutional              7.35             7.40      -0.6%

Total                           323.74           266.11      21.7%

MOVEMENT

Bulk

Domestic                          3.44             5.36     -35.8%

Exports                           0.25             0.20      21.5%

Total (Bulk)                      3.69             5.56     -33.7%

Retail/Institutional

Domestic                          1.31             1.42      -8.1%

Exports                           0.00             0.00         NC

Total (Retail/Inst)               1.31             1.42      -8.1%

Total Movement                    5.00             6.99     -28.5%

ENDING INVENTORY

Bulk                            312.69           253.15      23.5%

Retail/Institutional              6.04             5.98       1.2%

Ending Inventory                318.74           259.13      23.0%

Total Same

Total Season      Period Last

To Date           Season

24-Aug-19        25-Aug-18   % Change

CARRY OVER, RECEIPT & PACK

Carry Over

Bulk                            237.21           185.02      28.2%

Retail/Institutional              5.92             7.20     -17.8%

Total                           243.13           192.21      26.5%

Pack

Bulk                            144.52            91.86      57.3%

Retail/Institutional             57.48            59.16      -2.8%

Total Pack                      202.00           151.02      33.8%

Reprocessed                    -114.71          -109.92       4.4%

Pack from Fruit                  87.29            41.10     112.4%

Receipts & Losses

Net Gain or Loss                 -1.35             0.87      55.1%

Imports – Foreign               263.40           287.06      -8.2%

Domestic Receipts                10.26             8.36      22.7%

Receipts of Florida Produ         0.07             0.52     -87.2%

from Non-Reporting Entit         3.69             1.74     112.5%

Chilled OJ used in FCOJ           3.31             0.61     441.4%

Reprocessed FCTJ

Total Carry Over, Receipt & Pack

Bulk                            546.40           466.11      17.2%

Retail/Institutional             63.39            66.36      -4.5%

Total                           609.80           532.47      14.5%

MOVEMENT

Bulk                            215.51           198.59       8.5%

Domestic                         18.19            14.37      26.6%

Exports                         233.71           212.96       9.7%

Total (Bulk)

Retail/Institutional

Domestic                         57.35            60.38      -5.0%

Exports                           0.00             0.00    -100.0%

Total (Retail/Inst)              57.35            60.38      -5.0%

Total Movement                  291.06           273.34       6.5%

ENDING INVENTORY

Bulk                            312.69           253.15      23.5%

Retail/Institutional              6.04             5.98       1.2%

Ending Inventory                318.74           259.13      23.0%

COFFEE 

General Comments:  New York closed higher on what was called speculative short covering.  London closed higher as well.  The weekly chart formations show the potential for New York to carve out lows at this time.  The market is starting to feel smaller crops from Brazil for the current harvest and is seeing projections for smaller crops next year as well due to the current dry weather outlook.  However, there are many who think the next crop will be good and could total 70 million bags or more.  The Arabica growing areas are waiting for rains to restart flowering after some rains earlier in the year.  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.  Demand has been increasing over the last few years on the consumer level, but production potential is growing faster.  The weaker production prospects this year should help to hold prices from going much lower.

Overnight News:  ICE certified stocks are lower today at 2.332 million bags.  The ICO daily average price is now 96.23 ct/lb.  Brazil will get mostly dry conditions with near normal temperatures.  Vietnam will see scattered showers and storms mostly in the north.  ICE said that 17 notices were posted for delivery against September contracts and that total deliveries for the month are now 488 contracts.

Chart Trends:  Trends in New York are mixed.  Support is at 96.00, 94.00, and 91.00 December, and resistance is at 101.00, 103.00 and 103600 December.  Trends in London are down with objectives of 1270 and 1220 November.   Support is at 1260, 1230, and 1200 November, and resistance is at 1300, 1340, and 1360 November.

SUGAR               

General Comments:  Both markets closed lower as ideas of big supplies and just average demand continue to circulate.  World supplies still appear ample for the demand potential.  Reports from India indicate that the country still has a large surplus of White Sugar that probably must be exported.  India is reporting very good monsoon rains and production prospects for this year have definitely improved after a slow start to the season.  The last couple of weeks have featured above average rains.  Processing of Sugarcane in Brazil is slower and the pace of the crush is behind last year.  Mills are refining mostly for ethanol right now as has been the case all season.  The fundamentals still suggest big supplies, and the weather in Brazil is good enough and India has improved to support some of the big production ideas.  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.  Better weather was seen in early August then it turned hot and dry again.  These areas need more rain and some cooler weather to provide better conditions for the final development of the Sugar beets crops.

Overnight News:  Brazil will get mostly dry weather.  Temperatures should be near normal.

Chart Trends: Trends in New York are down with objectives of 1180 and 1170 March.  Support is at 1170, 1140, and 1110 March, and resistance is at 1220, 1240, and 1250 March.  Trends in London are down with objectives of 294.00 December.  Support is at 306.00, 300.00, and 294.00 December, and resistance is at 312.00, 317.00, and 323.00 December.

COCOA              

General Comments:  Futures closed mostly higher in both markets on follow through buying.  The charts show mixed tendencies.  New York is starting on a recovery rally and London shows that a short term corrective move higher is possible.  The market acts weak as the next main crop harvest comes closer to reality in West Africa.  The weather in West Africa is still a feature.  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.  The harvest will start in the Fall.  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 lower today at 3.949 million bags.  ICE said that 0 notices were posted for delivery against September contracts and that total deliveries for the month are now 2,118 contracts.

Chart Trends:  Trends in New York are mixed to up with objectives of 2320 and 2420 December.  Support is at 2260, 2230, and 2210 December, with resistance at 2340, 2400, and 2440 December.  Trends in London are mixed to up with objectives of 1770 and 1970 December.  Support is at 1740, 1710, and 1680 December, with resistance at 1780, 1800, and 1830 December.

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