Softs Report 02/08/19
Jack Scoville of The PRICE Futures Group - - Fri Feb 08, 3:15PM CST

DJ FAO Food Price Index Rose in January
By David Hodari
LONDON–World food prices rose in January, climbing across most categories, the Food and Agriculture Organization of the United Nations said Thursday.
The FAO Food Price Index was up 1.8% from its December level and some 2.2% below the level from the same month last year, the organization said.
Dairy prices rose 7.2%, while meat prices were roughly unchanged from their December price. Vegetable oils rose 4.3% on month after a protracted fall.
Cereal prices ticked up on month, and were 7.3% on year. Prices of most cereals, apart from rice, kept prices supported, with adverse weather conditions in South America a factor.
Sugar prices rose 2.4% on month, rallying with rising oil prices and a firmer Brazilian real.

General Comments: Cotton was lower. Trends are still trying to turn down on the charts. Weak overall demand continues to impact the US market, but word of smaller supplies is providing the support. Ideas are that Cotton production can be reduced in the Friday. USDA reports as some of the crop was left in the fields well into the Winter season. Demand could also be less as demand reports have not been real strong this year and as China is not reported to be buying in the US market. Analysts expect and uptick in ending stocks estimates World production and supplies are seen by analysts as going a little higher
Overnight News: The Delta and Southeast should get episodes of precipitation all week, then a dry weekend and above normal temperatures. Temperatures should be below normal this weekend. Texas will have mostly dry weather. Temperatures will be mostly below normal through Sunday, then mostly above normal. The USDA average price is now 68.24 ct/lb. ICE said that certified stocks are now 127,446 bales, from 127,446 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 7220, 7200, and 7160 March, with resistance of 7410, 7480, and 7650 March.

DJ On-Call Cotton – Jan 7
As of Jan 4. 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
Mar 19 25,754 27,622 -1,868 16,235 15,751 484
May 19 20,933 21,371 -438 2,334 2,063 271
Jul 19 30,314 30,162 152 2,605 2,579 26
Dec 19 16,743 17,820 -1,077 19,860 20,586 -726
Mar 20 6,326 6,326 0 227 227 0
May 20 2,583 2,600 -17 0 0 0
Jul 20 3,017 3,017 0 0 0 0
Dec 20 1,268 1,298 -30 3,681 3,681 0
Total 106,938 110,216 -3,278 44,942 44,887 55
Open Change
Mar 19 126,870 125,063 1,807
May 19 39,088 37,747 1,341
Jul 19 20,434 17,161 3,273
Oct 19 8 8 0
Dec 19 31,922 30,824 1,098
Mar 20 1,851 1,193 658
May 20 232 179 53
Jul 20 117 92 25
Dec 20 1,046 1,051 -5
Total 221,568 213,318 8,250

Wire: Bloomberg News (BN) Date: Feb 6 2019 10:10:00
U.S. & World Cotton Production, Inventory Survey Before WASDE
By Dominic Carey
(Bloomberg) — The following table shows results of a Bloomberg News survey
of as many as eight analysts for the USDA’s World Agricultural Supply and Demand
report on the 2018-19 cotton crop, which is scheduled for release at noon in
Washington on Feb. 8.
|——–Survey Results——–|Bloomberg|USDA
| | | | Jan. |
2018-19:| Avg | Low | High | Survey | Dec.
US Production | 18.43| 18.10| 18.80| 18.40| 18.59
US Exports | 14.63| 12.90| 15.20| 14.88| 15.00
US End Stocks | 4.62| 4.10| 6.00| 4.37| 4.40
World | | | | |
Production | 118.23| 117.00| 119.00| 118.41| 118.74
World | | | | |
Consumption | 125.31| 124.80| 126.60| 125.29| 125.63
World End | | | | |
Stocks | 73.02| 71.70| 73.50| 73.35| 73.19
Analyst |————U.S.————| World
| | | End
Estimates: |Production |Exports |Stocks |Production |Consumption |Stocks
================================================================================ | 18.10| 12.90| 6.00| 117.80| 124.80| 73.00
Doane | 18.70| 14.90| 4.60| 119.00| 125.00| 73.50
Love Consulting | 18.10| 15.00| 4.10| 118.30| 125.70| 73.10
Price Futures Group| 18.25| 14.80| 4.50|n/a |n/a |n/a
Rabobank | 18.80| 15.20| 4.33| 117.00| 126.60| 71.70
Rose Commoditiy | | | | | |
Group | 18.25| 15.00| 4.10| 118.50| 125.10| 73.36
Varner Bros. | 18.75| 14.50| 5.06| 119.00| 125.00| 73.50
Wedbush Securities | 18.50| 14.75| 4.25| 118.00| 125.00| 73.00
SOURCE: Bloomberg News

General Comments: FCOJ was a little lower after a choppy session. The market has absorbed speculative and producer selling through the Winter as no freeze has developed, and now there is some speculative and user buying with no real big offer noted. Longer range forecasts show that there is little chance for a freeze to develop this month, and then it will be getting to be too late for a freeze to be seen in the state of Florida. The Oranges harvest is active in Florida as the weather is warm and mostly dry. Irrigation is being used in all areas. All processors are open in the state to take packing house eliminations and fresh fruit, and packing houses remain active processing fresh fruit for sale. Mostly good conditions are reported in Brazil, and some beneficial rains should be seen this week.
Overnight News: Florida should get 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 117.00, 114.00, and 111.00 March, with resistance at 123.00, 124.00, and 126.00 March.

General Comments: Futures were a little lower and prices are holding the trading range. The Brazil harvest is getting close to done now. Ideas are that the current production of 62 or 63 or more million bags can become about 52 million bags next year. Coffee areas in Brazil could be affected by the current drought that could hurt production even more. Many areas are dry now, but showers are in the forecast for this week. Vietnam is active in its harvest. Selling will be less this week due to the Lunar New Year holiday. Production in Vietnam is estimated less than 30 million bags due to uneven weather during the growing season. Producers and the industry are enjoying the Tet holiday this week.
Overnight News: Certified stocks are lower today and are about 2.478 million bags. The ICO composite price is now 104.38 ct/lb. Brazil will get mostly dry weather, but showers are likely today. Temperatures should be above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers or dry conditions. Vietnam will get mostly dry weather.
Chart Trends: Trends in New York are mixed. Support is at 103.00, 102.00, and 100.00 March, and resistance is at 107.00, 110.00 and 112.00 March. Trends in London are mixed to up with objectives of 1600, 1650, and 1670 March. Support is at 1530, 1510, and 1500 March, and resistance is at 1570, 1590, and 1610 March.

General Comments: Both markets were a little lower. Most analysts are still looking for surplus supplies, but the market acts as if it needs Sugar right now. Brazil has been producing ethanol and has reduced Sugar offers this year, and the market acts as if it needs a little more Sugar. Analysts say that there is plenty of Sugar around and another surplus is expected, but the price action is stronger than the analyst comments might suggest. There are doubts on just how much production will be seen this year in India. Dry conditions continue in northern Brazil and there are frequent rains in Rio Grande do Sul. Some showers are in the forecast for this week in Sugar areas Very good conditions are reported in Thailand, but the next production could be less as farmers might switch to other crops due to low prices for Sugarcane.
Overnight News: Brazil will mostly dry weather, but showers are possible on Wednesday. Temperatures should be above normal.
Chart Trends: Trends in New York are mixed. Support is at 1250, 1230, and 1220 March, and resistance is at 1300, 1310, and 1330 March. Trends in London are mixed. Support is at 334.00, 331.00, and 328.00 March, and resistance is at 348.00, 351.00, and 353.00 March.

ISO-Thailand – As of February 5th, mills had crushed 69.7 mln tonnes of cane, up from 58.7 mln tonnes at the same time last year. Sugar Production reached 7.4 mln tonnes, up from 6.1 mln tonnes last year, owing to an earlier start to the season and two new mills.

General Comments: Futures closed lower yesterday as the fund and technically related buying appeared to be done. The outlook for strong production in the coming year is still around, and ports are said to have plenty of Cocoa on offer. The main crop harvest is active in West Africa, and Ivory Coast arrivals are strong. Some early week showers and cooler temperatures were beneficial, it is warmer now and mostly dry. Conditions appear good in East Africa and Asia. Demand is said to be improving as offers from the new harvest start to increase.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average 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 higher today at 3.741 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2190, 2160, and 2150 March, with resistance at 2280, 2300, and 2370 March. Trends in London are mixed to up with no objectives. Support is at 1670, 1650, and 1600 March, with resistance at 1730, 1740, and 1750 March.