Morning Softs Report 10/19/18
Jack Scoville of The PRICE Futures Group - InsideFutures.com - Fri Oct 19, 11:30AM CDT

COTTON
General Comments Cotton was mixed again yesterday and held well considering the dismal export sales report as traders try to decide on the direction of the market for the short-term. The recent hurricane in the Southeast has brought ideas of big losses, and USDA did show significant quality losses in its weekly updates on Monday night, and further damage might be seen in the reports that will be released next Monday. Social media continue to show pictures of widespread devastation in Cotton fields, with many plants blown over and destroyed and Cotton on the ground. Export demand needs to improve soon for prices to rally significantly this year, but any increase in demand has to come with no purchases from China for a while. The trade in India remains optimistic that a good crop is coming and that they will not need to import very much Cotton this year. China has been active in India buying and will buy as much as possible there to avoid buying much in the US.
Overnight News: The Delta should get significant precipitation on Friday, otherwise dry weather and cold temperatures. The Southeast will get dry weather except for showers on Saturday. Temperatures should be above normal through Thursday, than below normal. Texas will have mostly dry weather this weekend, but showers early next week. Temperatures will be below normal. The USDA average price is now 74.44 ct/lb. ICE said that certified stocks are now 24,910 bales, from 24,931 bales yesterday. USDA said that net Upland Cotton export sales were 32,700 bales this year and 24,200 bales next year. Net Pima sales were 5,000 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7990 and 8210 December. Support is at 7740, 7680, and 7620 December, with resistance of 7830, 7910, and 7930 December.

DJ On-Call Cotton – Oct 18
As of Oct 12. 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
Oct 18 0 0 0 0 0 0
Dec 18 23,421 24,614 -1,193 18,329 18,703 -374
Mar 19 38,497 37,944 553 4,171 3,689 482
May 19 19,910 20,098 -188 649 627 22
Jul 19 28,521 28,130 391 1,952 1,864 88
Dec 19 15,685 15,362 323 17,657 17,622 35
Mar 20 5,382 5,343 39 209 209 0
May 20 2,078 2,078 0 0 0 0
Jul 20 1,872 1,872 0 0 0 0
Dec 20 1,166 1,158 8 2,447 2,369 78
Total 136,532 136,599 -67 45,414 45,083 331
Open Change
Int

Oct 18 0 22 -22
Dec 18 138,632 135,912 2,720
Mar 19 70,229 65,953 4,276
May 19 14,573 14,223 350
Jul 19 9,351 8,368 983
Oct 19 3 2 1
Dec 19 26,788 25,482 1,306
Mar 20 908 910 -2
May 20 65 63 2
Jul 20 33 30 3
Dec 20 751 728 23
Total 261,333 251,693 9,640

FCOJ
General Comments: FCOJ was mostly a little lower again yesterday, but remained within the recent trading range. November closed slightly higher as short speculators roll positions forward. Good weather continues in Florida and as prospects for a much improved crop from a year ago continue. Chart trends are down as futures stayed below some important resistance on the weekly charts. Overall growing conditions in Florida are good to very good, and there is no storm development in the Atlantic at this time, or at least nothing that would impact the state. Florida producers are seeing good-sized fruit, and work in groves maintenance is active. Irrigation is being used when needed, and producers expect a good crop. Some initial picking of early season Oranges is now under way.
Overnight News: Florida should get mostly dry conditions or light showers. Temperatures will average near to above normal. Brazil should get scattered showers and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 142.00, 140.00, and 138.00 November, with resistance at 147.00, 150.00, and 153.00 November.

DJ Florida FCOJ Movement and Pack – Oct 18
Florida FCOJ Movement And Pack
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING:
10/6/2018 Corresponding
Current Week Last
Week Season
10/6/2018 10/7/2017 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 237.81 185.02 28.5%
Retail/Institutional 5.92 7.20 -17.8%
Total 243.72 192.21 26.8%
Pack
Bulk 0.32 0.84 -61.9%
Retail/Institutional 1.08 1.74 -37.6%
Total Pack 1.40 2.58 -45.5%
Reprocessed -1.40 -2.58 -45.5%
Pack from Fruit 0.00 0.00 NA
Receipts & Losses
Net Gain or Loss 0.09 0.11 -23.9%
Imports – Foreign 1.02 3.47 -70.5%
Domestic Receipts 0.02 0.03 -45.8%
Receipts of Florida Product
from Non-Reporting Entit 0.00 0.01 -100.0%
Chilled OJ used in FCOJ 0.00 0.13 -98.7%
Reprocessed FCTJ 0.00 0.00 NC
Total Carry Over, Receipt & Pack
Bulk 237.85 187.03 27.2%
Retail/Institutional 7.00 8.94 -21.7%
Total 244.85 195.96 24.9%
MOVEMENT
Bulk
Domestic 5.19 3.83 35.5%
Exports 0.37 0.15 145.2%
Total (Bulk) 5.57 3.98 39.7%
Retail/Institutional
Domestic 1.10 1.79 -38.8%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.10 1.79 -38.8%
Total Movement 6.66 5.77 15.4%
ENDING INVENTORY
Bulk 232.29 183.04 26.9%
Retail/Institutional 5.90 7.15 -17.4%
Ending Inventory 238.19 190.19 25.2%
Total Same
Total Season Period Last
To Date Season
6-Oct-18 7-Oct-17 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 237.81 185.02 28.5%
Retail/Institutional 5.92 7.20 -17.8%
Total 243.72 192.21 26.8%
Pack
Bulk 0.32 0.84 -61.9%
Retail/Institutional 1.08 1.74 -37.6%
Total Pack 1.40 2.58 -45.5%
Reprocessed -1.40 -2.58 -45.5%
Pack from Fruit 0.00 0.00 NA
Receipts & Losses
Net Gain or Loss 0.09 0.11 -23.9%
Imports – Foreign 1.02 3.47 -70.5%
Domestic Receipts 0.02 0.03 -45.8%
Receipts of Florida Produ 0.00 0.01 -100.0%
from Non-Reporting Entit 0.00 0.13 -98.7%
Chilled OJ used in FCOJ 0.00 0.00 NC
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 237.85 187.03 27.2%
Retail/Institutional 7.00 8.94 -21.7%
Total 244.85 195.96 24.9%
MOVEMENT
Bulk 5.19 3.83 35.5%
Domestic 0.37 0.15 145.2%
Exports 5.57 3.98 39.7%
Total (Bulk)
Retail/Institutional
Domestic 1.10 1.79 -38.8%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.10 1.79 -38.8%
Total Movement 6.66 5.77 15.4%
ENDING INVENTORY
Bulk 232.29 183.04 26.9%
Retail/Institutional 5.90 7.15 -17.4%
Ending Inventory 238.19 190.19 25.2%

COFFEE
General Comments: Futures were a little lower yesterday on what appeared to be tow sided speculative trading. Speculators in general have been buying out a massive short position as the Real has changed trends and is now working higher against the US Dollar. However, the trading became more tow sided yesterday as producers showed more interest in fixing some prices and making some sales and as futures have already rallied a lt from the lows. The Real has found support as the right-wing candidate for president in Brazil won the first round of elections and leads for the second round over the workers party candidate. Ideas of strong production in Brazil and Vietnam have been keeping futures under selling pressure. Vietnam is getting close to its next harvest, and ideas are that producers there need to sell more of the previous crop to create new storage space.
Overnight News: Certified stocks are lower today and are about 2.424 million bags. The ICO composite price is now 116.80 ct/lb. Brazil will get daily chances for scattered showers. Temperatures should be near to mostly above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get showers.
Chart Trends: Trends in New York are up with no objectives. Support is at 120.00, 117.00, and 114.00 December, and resistance is at 125.00, 127.00 and 130.00 December. Trends in London are up with objectives of 1780, 1810, and 1840 November. Support is at 1720, 1690, and 1660 November, and resistance is at 1770, 1780, and 1810 November.

SUGAR
General Comments: Futures closed higher in both markets as the trade starts to see reduced supplies coming to the market. Sugar is waiting for increased offers from India and keep hearing of reduced production in Brazil. However, the increased offers from India might not be coming as pests are reported to be attacking cane fields. Sugar was partially supported by reduced selling in Brazil due to the presidential elections that were held last week and ideas of increasing inflation in the US. The Real has been gaining on the US Dollar as a result and this has served to limit export interest in Brazil. Ideas of big world production are bearish and have been the reason for the selling, but traders note the lack of offers from India and that it is better for Brazilian mills to make ethanol instead of Sugar. Dry conditions continue in Brazil, the EU, and Russia. Good conditions are reported in Thailand and Ukraine.
Overnight News: Brazil will get daily chances for scattered showers. Temperatures should be near to above normal.
Chart Trends: Trends in New York are up with objectives of 1400 March. Support is at 1350, 1320, and 1300 March, and resistance is at 1390, 1420, and 1440 March. Trends in London are up with no objectives. Support is at 371.00, 364.00, and 361.00 December, and resistance is at 383.00, 391.00, and 396.00 December.

COCOA
General Comments Futures closed lower in anticipation of reduced grind data from North America. The new main crop harvest is coming to market in West Africa. The main crop harvest is in its earliest stages in some parts of West Africa. Main crop production ideas for Ivory Coast are high. Ghana and Nigeria are expecting very good crops this year as well, but Nigeria has reported reduced offers from producers after reports of some wet weather in the last few weeks. Conditions also appear good in East Africa and Asia. Demand is said to be improving as offers from the new harvest start to increase.
Overnight News: Scattered showers and storms are expected in West Africa, with heavy amounts of precipitation possible. Temperatures will average near to below normal. Malaysia and Indonesia should see frequent 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 3.970 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 2240, 2280, and 2500 December. Support is at 2130, 2110, and 2080 December, with resistance at 2180, 2230, and 2250 December. Trends in London are mixed. Support is at 1570, 1540, and 1500 December, with resistance at 1620, 1630, and 1670 December.

DJ Asian Cocoa Grinding Climbed in 3Q 2018
By Lucy Craymer
Asian cocoa Grinding rose 3.7% in the third quarter from the same period last year to 196,418 metric tons, according to figures issued by the Cocoa Association of Asia on Friday.
Compared with the second quarter, Grinding were up 5.9%, the data showed.
Grinding refer to the volume of cocoa beans processed into the butters and powders used to make chocolate and are often used as a proxy for chocolate demand.
The data reflect the compilation of grinding from Malaysia as well as from Cocoa Association of Asia members in both Singapore and Indonesia.

DJ Shortage of Cocoa Persists in Southwest Nigeria, Officials Blame Bad Weather
By Obafemi Oredein
Special to Dow Jones Newswires
IBADAN, Nigeria–Harvest yields from the 2018-19 season’s main cocoa crop in Nigeria’s major producing southwestern region remain low due to poor fruiting of cocoa trees and climate problems, an industry official and traders said Tuesday.
“Cocoa yield [still] isn’t much now, I think the low yield this season [is connected] with climate change,” Joshua Oyedele, vice president of the Cocoa Association of Nigeria, said.
Olu Akinyele, a farmer in Ibadan, capital of Oyo state, said Tuesday that the pace of main crop harvest hasn’t changed, as the yield from his farm remains low. “I think it is because of the bad weather of the last few years,” he said.
“By this time last year, I had sold one and a half tons of cocoa but as at now I have sold less than one ton. Farmers are discouraged particularly because the price of cocoa is low now,” he said.
Meanwhile, one cocoa exporter said he feared exports may be lower this year than last year because yields have been low since main crop harvest began in August. Traders contacted in all southwest cocoa-producing states have confirmed that their cocoa outputs remain low.
“I don’t think the harvest can pick up more than it is at present as the new season is running to an end. It is because of [the] climate-change problem, ” Mr. Oyedele said.
The southwest, which comprises Ogun, Oyo, Osun, Ondo and Ekiti states, accounts for 70% of Nigeria’s annual cocoa production of about 300,000 metric tons, according to CAN.
Nigeria could lose between 5% and 7% of its production in the 2018-19 season due to heavy flooding on cocoa farms and the black-pod disease attacking cocoa pods, Sayina Riman, the association’s president, said last month after forecasting in August a cocoa production of 310,000 tons for the season.
The main crop is usually harvested from August or September until January or February in southwestern Nigeria.