Softs Report 10/22/19

General Comments: Cotton was higher in the overnight session but could not hold and closed lower. Initial support came on follow through buying tied 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. Cotton producers hope that China will buy some Cotton from the US but China has not been doing this. In fact, overall report demand has been bad for US Cotton and in the end was a factor to send the market down again today. It has concentrated on Soybeans and Pork purchases instead and is expected to concentrate on meats buying in the coming weeks. USDA once again showed good crop progress as progress remains ahead of the five-year average. Condition showed some improvement as well.
Overnight News: The Delta should see mostly dry weather until showers return this weekend, and Southeast should see mostly dry weather. Temperatures should be on both sides of normal. Texas will have mostly dry conditions through Wednesday, then episodes of scattered showers through the weekend. Temperatures will be on both sides of normal. The USDA average price is now 62.30 ct/lb. ICE said that certified stocks are now 9,162 bales, from 10,435 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 6590, 6650, and 6670 December. Support is at 6400, 6370, and 6220 December, with resistance of 6550, 6580, and 6750 December.

Crop Progress
Date 20-Oct 13-Oct 2018 Avg
Cotton Bolls Opening 93 87 88 89
Cotton Harvested 40 32 38 35
Crop Condition
Very Poor Fair Good Excellent
Cotton This Week 5 18 36 33 8
Cotton Last Week 4 17 41 30 8
Cotton Last Year 13 20 33 26 8

General Comments: FCOJ was a little lower as the storm over the weekend brought rain and some wind but proved to be mostly beneficial for crops. Futures are now trying to break down out of the range. Good growing conditions and increased oranges production estimates by USDA are bearish. USDA estimated Florida production at 74 million boxes. Private sources show that there are less oranges per tree but the oranges are bigger and hold more acid. 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. A storm moved through central and northern areas of the state over the weekend but mostly brought rain. Crop yields and quality should be high for Florida this year. Inventories of FCOJ in the state are high and are more than 30% above last year. Rains are falling in Brazil and trees should be flowering now.
Overnight News: Florida should get mostly dry weather. Temperatures will average above normal. Brazil should get mostly dry weather and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 98.00, 96.00, and 95.00 September, with resistance at 101.00, 104.00, and 105.00 September.

General Comments: Futures were mixed, with New York a little higher and London a little lower. Trends in New York are turning up while trends in London are still mostly down. New York was higher despite more reports of good flowering in Brazil as Real started to rally against the US Dollar and as Cooxupe said it had sold most if not all of its previous crop supplies. The Real rallied after testing recent lows. London has been the weaker market as the Asian harvest is underway. 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. 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. More rain is expected early this week. 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. Overall growing conditions are better now.
Overnight News: ICE certified stocks are higher today at 2.259 million bags. The ICO daily average price is now 96.00 ct/lb. Brazil will get scattered showers on Thursday and Sunday with near to above normal temperatures. Vietnam will see scattered showers in all areas.
Chart Trends: Trends in New York are mixed. Support is at 94.00, 91.00, and 88.00 December, and resistance is at 98.00, 99.00 and 100.00 December. Trends in London are down with no objectives. Support is at 1180, 1150, and 1120 November, and resistance is at 1230, 1250, and 1280 November.

General Comments: Futures closed higher on ideas of less offer into the world market. Reports indicate that little is on offer from India and are keeping an eye on potential dry weather in Brazil. Futures remain in a trading range but have been showing that some weakness is still around. Europe and Russia are probably buying in the world market after poor growing seasons. Reports of improving weather in Brazil imply good crops there. There is some talk that dry weather could hit Brazil growing areas, but for now these areas have been getting rains and forecasts call for more showers this week. 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. However, these supplies are apparently not moving and this could be due to less government subsidy for mills and exporters. The weather there has improved with the monsoon and some areas are seeing some excessive rains 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 scattered showers Thursday and Sunday. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 1190 March. Support is at 1220, 1210, and 1190 March, and resistance is at 1240, 1260, and 1290 March. Trends in London are down with objectives of 331.00 and 322.00 December. Support is at 333.00, 331.00, and 326.00 December, and resistance is at 337.00, 343.00, and 348.00 December.

General Comments: Futures closed a little lower again yesterday on ideas that there is more than enough beans to go around. The quarterly grind data was mixed and left people wondering how good the demand for chocolate will be. Chart trends are turning down. Ideas of increasing harvest pressure kept the sellers interested. The reports from West Africa imply that a big harvest is possible in the region, but no one knows how to handle to new marketing and producer support programs imposed by the governments of Ivory Coast and Ghana. Ivory Coast arrivals are off to a fast start and are above year ago levels two weeks into the season. 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. The moves could force the big Cocoa processors and grinders to pay more as they contract for Cocoa well in advance to ensure adequate supplies.
Overnight News: Scattered showers and storms 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 3.502 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2440, 2410, and 2370 December, with resistance at 2500, 2530, and 25760 December. Trends in London are down with objectives of 1850, 1790, and 1660 December. Support is at 1870, 1850, and 1830 December, with resistance at 1900, 1930, and 1950 December.