Morning Softs 11/21/17

COTTON
General Comments: Cotton was higher again and made new hogs for the move on ideas that overall demand has been underestimated. Trends turned up on the charts and it looks like a big low has been completed The report gave the market Bulls a shot in the arm at a time when the futures market could be bottoming. The chart patterns suggest that futures could move higher over time, but needs to move above 7000 December and hold above that level to force speculative buying. Speculators are already long. The futures market is watching the harvest roll along and is debating the demand for US and world Cotton. Some traders say that USDA is seriously underestimating demand for the fiber, while the others look to the high USDA ending stocks estimates and suggest that any demand can be easily met. Futures had a muted reaction to the USDA reports and held to the range seen for the last few weeks. Farmers are reported to be quiet sellers right now. Harvest conditions are good in just about all areas.
Overnight News: The Delta and the Southeast should get mostly dry weather today and light showers this weekend. Temperatures should be near to above normal through tomorrow, then near to below normal. Texas will see mostly dry conditions. Temperatures will be above normal. The USDA average price is now 68.79 ct/lb. ICE said that certified stocks are now 47,951 bales, from 47,951 bales yesterday. USDA said that Cotton is now 74% harvested, from 64% last week, 66% last year, and 71% average.
Chart Trends: Trends in Cotton are up with objectives of 7180, 7350, and 7700 December. Support is at 7020, 6950, and 6890 December, with resistance of 7220, 7240, and 7320 December.

FCOJ
General Comments: FCOJ closed higher again yesterday as the small crop in Florida impacted the market. Production was lower again at 50 million boxes in the recent USDA reports and the market had held strong ever since. The report once again highlighted the damage from the hurricane this year, and ideas are that production in coming reports will drop even more. Brazil weather has improved as groves are now getting rains, but suffered from drought at flowering time. It was also very hot and it is possible that production from Sao Paulo state will be less. The weekly charts indicate that higher prices are coming over time. Trees in Florida that are still alive now are showing fruit of good sizes, although many have lost a lot of the fruit. Florida producers are actively harvesting what is left as cleanup from the hurricane is about over now. The emphasis is on the fresh fruit market now, with processors mostly getting packing house eliminations at this time.
Overnight News: Florida should get mostly dry weather and near to above normal normal temperatures. Scattered showers are expected this weekend. Brazil should get mostly dry conditions and near to above normal temperatures. Some showers are possible this weekend. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are now 29 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 171.00 January. Support is at 163.00, 160.00, and 157.00 January, with resistance at 169.00, 170.00, and 175.00 January.

COFFEE
General Comments: Futures were lower on Friday and lower for the week. Frustrated bullish traders were forced to liquidate as futures fell back into the middle of the range after probing new highs earlier in the week. Many Arabica traders are expecting the market to move higher due to ideas of smaller crops from all over Latin America, and especially Brazil. Brazil exports are reduced on what is called reduced inventories held by exporters and producers. Producers are less interested in selling as well as the market tries to gauge production potential in Brazil after earlier drought and cold weather hurt trees at and before flowering time. There is plenty of rain now, but dry weather could return soon and stress the trees again There are also reports of short crops in parts of Central America and some areas in South America due to the lack of farmer investment from the low prices. However, supplies in importer countries are called high and are providing a cushion for buyers, and buyers have been able to keep differentials low even with the low prices in futures.
Overnight News: Certified stocks are higher today and are about 1.912 million bags. The ICO composite price is now 115.55 ct/lb. Brazil will get showers and storms this week and drier weather this weekend. Temperatures should average near to below normal. Colombia should get scattered to isolated showers. Central America and southern Mexico should get scattered showers or dry conditions. Temperatures should average near to above normal. ICE said that 81 delivery notices were posted against December Contracts today and that total deliveries for the month are now81 contracts.
Chart Trends: Trends in New York are down with objectives of 120.00 and 116.00 December. Support is at 121.00, 119.00, and 116.00 December, and resistance is at 125.00, 129.00 and 130.00 December. Trends in London are mixed to up with objectives of 1860 and 1890 January. Support is at 1800, 1770, and 1740 January, and resistance is at 1850, 1880, and 1900 January.

DJ Ugandan Indicative Arabica Coffee Prices for Nov. 21
By Nicholas Bariyo
KAMPALA, Uganda–Below are the indicative cash export prices for Ugandan arabica coffee, provided Tuesday by the state-run Uganda Coffee Development Authority.
Grade Nearby Price
Bugisu AA 120.75 (125.75)
Bugisu A 119.75 (124.75)
Bugisu P 119.75 (124.75)
Bugisu B 117.75 (122.75)
Wugar 118.75 (123.75)
Drugar 100.75 (105.75)
*All prices in U.S. cents for a pound of beans. Prices in brackets are the ones quoted by the UCDA last week. Nearby delivery means within 45 days. Prices include transport costs to the Kenyan port of Mombasa, but not shipping costs.

SUGAR
General Comments: Futures were lower in both New York and London. Chart patterns are more neutral now due to the weakness in futures yesterday. Brazil features reduced sugarcane crush and continued emphasis on ethanol production and reduced Sugar production as it moves to cover domestic demand at the expense of exports. Trends are turning up in London and in New York after the price action last week on ideas of reduced availability of Sugar to the market. There have been no big demand reports, and the lack of demand against ideas of big world production are keeping the market in a fundamentally bearish mode. Even so, the charts in both New York and London imply that higher prices are still possible
Overnight News: Brazil should feature showers and storms this week and drier weather this weekend. Temperatures should be near to above normal today and tomorrow, then near to below normal
Chart Trends: Trends in New York are mixed to up with objectives of 1560, 1590, and 1630 March. Support is at 1480, 1460, and 1430 March, and resistance is at 1520, 1550, and 1580 March. Trends in London are mixed to up with objectives of 406.00 March. Support is at 386.00, 383.00, and 380.00 March, and resistance is at 393.00, 396.00, and 399.00 March.

COCOA
General Comments: Futures closed lower on follow through selling. The charts show that Cocoa futures could hit swing targets with further weakness in prices. London hit its targets yesterday. Some talk of disease in crops in Ivory Coast has created much of the recent buying interest, but no news has been Heard to confirm the talk so the fundamental supply side issue faded. It has been unseasonally wet in parts of West Africa, so some diseases could be forming. Demand ideas are holding strong as processor margins have been great. World production ideas remain high.
Overnight News: A few isolated showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see mostly dry conditions. Temperatures should average above normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 3.807 million bags. ICE said that 59 notices were posted for delivery today and that total deliveries for the month are now 116 contracts.
Chart Trends: Trends in New York are down with objectives of 2080 March. Support is at 2070, 2060, and 2030 March, with resistance at 2110, 2150, and 2180 March. Trends in London are down with no objectives. Support is at 1560, 1540, and 1510 March, with resistance at 1600, 1630, and 1650 March.

 

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