Softs Report 08/23/19
Jack Scoville of The PRICE Futures Group - - Fri Aug 23, 1:05PM CDT

Alerts History

General Comments: Cotton was lower in reacts to the weak export sales and ideas of weak demand in world cash markets. News that the US and China were talking again helped support better demand ideas even though no one realty expects an agreement between the two countries in short-term. The weekly crop progress report showed that the crop progress is very close to the five-year average, but the condition has deteriorated again and has weakened now for two weeks in a row. Traders note uncertain weather conditions in Texas as hot and dry weather continues to affect dryland Cotton in adverse ways. On the other hand, conditions in the Delta and Southeast are good to very good and this is also reflected fin the reports. Indian sellers say that demand from China has almost stopped. Interior cash prices for domestic Cotton are close to imported values and the industry there is now concentrating on using domestically produced fiber.
Overnight News: The Delta and Southeast should see scattered showers into next week. Temperatures should be mostly near to below normal this weekend and near to above normal next week. Texas will have mostly dry weather. Temperatures will average above normal. The USDA average price is now 54.19 ct/lb. ICE said that certified stocks are now 22,342 bales, from 22,342 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 5870, 5750, and 5720 December, with resistance of 6020, 6170, and 6290 December.

DJ On-Call Cotton – Aug 22
As of Aug 16. 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 19 0 0 0 0 0 0
Dec 19 25,599 26,036 -437 41,667 39,963 1,704
Mar 20 24,617 24,424 193 3,803 3,454 349
May 20 10,843 10,460 383 572 564 8
Jul 20 13,127 13,002 125 837 834 3
Dec 20 10,054 10,121 -67 16,590 15,716 874
Mar 21 3,460 3,463 -3 574 574 0
May 21 1,367 1,369 -2 0 0 0
Jul 21 2,194 2,198 -4 0 0 0
Dec 21 0 0 0 546 507 39
Total 91,261 91,073 188 64,589 61,612 2,977
Open Change
Oct 19 265 269 -4
Dec 19 137,443 141,927 -4,484
Mar 20 45,080 41,291 3,789
May 20 8,475 6,745 1,730
Jul 20 7,487 7,021 466
Dec 20 15,099 14,282 817
Mar 21 589 518 71
May 21 118 113 5
Jul 21 270 232 38
Dec 21 2 2 0
Total 214,828 212,400 2,428

General Comments: FCOJ was a little lower as the market concentrated more on rolling positions forward from September contracts and less on what is going on in the world of citrus juices. The daily charts show that trends are down. The weather in Florida remained tranquil as the state has seen frequent showers and storms that have aided in development in the fruit. There are no hurricanes likely to hit the state this week and very little showing on the horizon as conditions in the Atlantic are not conducive for hurricanes to form. Demand ideas remain soft. Inventories in Florida are still 17% above a year ago. Fruit for the next crop is developing and are as big as baseballs. Crop conditions are called good. Mostly good conditions are reported in Brazil.
Overnight News: Florida should get scattered showers starting this weekend. Heavy rain is possible in southern areas. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 92.00 September. Support is at 95.00, 93.00, and 90.00 September, with resistance at 99.00, 101.00, and 103.00 September.

General Comments: Futures closed a little higher in New York and a little lower in London in consolidation trading. September is now in delivery and the trade is able to concentrate on what is happening in the cash market. It remains rather quiet right now. The charts show sideways trends in both markets for the short-term. The Brazil harvest is about over. Reports indicate that the yields are not real strong and that the quality of the crop is poor due to extreme weather seen early in the growing season. Ideas are that the recent freeze did noting to hurt the current crop but could lead to less production for the next crop. Vietnam is also reporting lower yields for the current crop as the weather was not good for flowering earlier in the year. There have been some hot and dry spells that have hurt yield and quality for these crops as well, but showers are reported in the Central Highlands recently. Robusta prices are holding better than Arabica prices due to the Vietnamese weather and also due to some reports of drier weather in Indonesia. Central America has Coffee on offer but bid prices from buyers have been very low.
Overnight News: ICE certified stocks are unchanged today at 2.363 million bags. The ICO daily average price is now 96.03 ct/lb. Brazil will get mostly dry conditions with near to above temperatures through Thursday, then near to below normal. Vietnam will see scattered and mostly light showers and storms. ICE said that 26 notices were posted for delivery against September contracts and that total deliveries for the month are now 346 contracts.
Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 95.00, 94.00, and 91.00 December, and resistance is at 98.00, 100.00 and 102.00 December. Trends in London are mixed. Support is at 1300, 1290, and 1260 November, and resistance is at 1330, 1360, and 1400 November.

General Comments: Futures closed higher after holding support on the daily charts. The price action implies that the market has found at least a temporary bottom. There is still some selling pressure on ideas that India is getting ready to dump a bunch of Sugar on the world market. World supplies overall still appear big for the demand potential with good production reported in Brazil and Thailand and it seems that India is ready to subsidize exports to bring more White Sugar to the market and to hammer prices lower for the rest of the sellers in the world. Reports from India indicate that the country still has a large surplus of White Sugar that probably must be exported. The total subsidized export offer could be larger than the 5.0 million that was supported by the government last year. India had been reporting below normal monsoon rains, but rains have been much better lately. 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.
Overnight News: Brazil will get mostly dry weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1140, 1130, and 1120 October, and resistance is at 1180, 1200, and 1220 October. Trends in London are mixed. Support is at 308.00, 307.00, and 305.00 October, and resistance is at 314.00, 319.00, and 322.00 October.

General Comments: Futures closed mixed as New York moved higher and London closed lower. The British Pound moved higher against the US Dollar to cause the spread relationship between the two markets to change. The market continues to fade lower on ideas that the current production is strong and a big new crop is coming soon. Arrivals have run well ahead of last year to support the big supplies ideas. Ideas are that the next crop will be good due to generally good weather. West Africa has seen enough rain and trees throughout the region are reported to be in good shape. The harvest will start in the Fall. Growing and harvesting conditions in Asia are also reported to be good. The harvest is ongoing amid showers, but good progress in the harvest is expected at this time. 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 and light showers 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 4.062 million bags. ICE said that 2 notices were posted for delivery against September contracts and that total deliveries for the month are now 2,117 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2200, 2170, and 2140 December, with resistance at 2240, 2280, and 2300 December. Trends in London are mixed. Support is at 1700, 1680, and 1670 December, with resistance at 1750, 1780, and 1800 December.