Morning Softs. 09/12/17
General Comments: Cotton was a little higher, and the overall market remains strong as the market tries to measure loss potential from the hurricanes. Reports from Texas indicate that about 600,000 acres of high quality Cotton could be damaged or destroyed in southern parts of the state. There is talk that between 200,000 and 600,000 bales of Cotton were destroyed in the storm. Formerly Hurricane and now Tropical Storm Irma is targeting the southeast US and causing some significant flooding. It will continue to wind down for the rest of the week.. Bolls are opening and big rains now could mean even further damage due to the open bolls. However, the crop conditions report showed slight improvement in overall conditions even after Harvey and just before Irma. The crop is getting smaller, but USDA will not reflect this in the reports tomorrow. Damage will need to be included in the October data.
Overnight News: The Delta will see mostly dry weather, but some precipitation in northern Mississippi today, and the Southeast could feel the impacts from Irma for the next couple of days, then turn drier. Temperatures should average near to below normal in the Delta and near to above normal in the Southeast. Texas will see mostly dry conditions this week and a few showers are possible this weekend. Temperatures will be above normal. The USDA average price is now 73.35 ct/lb. ICE said that certified stocks are now 8,402 bales, from 8,402 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up. Support is at 7120, 7020, and 6970 December, with resistance of 7250, 7320, and 7340 December.
Date 10-Sep 3-Sep 2016 Avg
Cotton Bolls Opening 34 25 40 40
Cotton Harvested 9 4 4
Very Poor Fair Good Very Good
Cotton This Week 4 7 26 46 17
Cotton Last Week 6 5 24 46 19
Cotton Last Year 4 12 37 38 9
General Comments: : FCOJ closed lower on ideas that the damage from Irma was not as great as feared. No one is sure exactly where the hurricane damaged last weekend, but all indications are that much of Florida got extreme rains and big winds as the storm passes through. Areas near Lake Okeechobee could have seen some extreme winds that could cause fruit drop and also some extreme rains that could damage the quality of the fruit. There will be losses, but for now the losses could be significant but not completely devastating. Both the daily and weekly charts show sideways trends. The market price remains generally weak due to ideas of better production potential for the coming harvest and reports of weak demand. Florida weather until now is very good as it is now drier, but showers are still around. The demand side remains weak and there are plenty of supplies in the US. Trees now are showing fruit of good sizes and the market had been expecting bigger production this year. Brazil crops remain in mostly good condition and production estimates are climbing after recent rains.
Overnight News: Florida should get scattered showers and storms and near to above normal temperatures. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 delivery notices were posted against September contracts today and that total deliveries are 8 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 165.00 November. Support is at 146.00, 142.00, and 140.00 November, with resistance at 155.00, 159.00, and 160.00 November.
General Comments: New York closed higher and London closed a little lower. New York is holding to a short-term trading range, and many think New York is making a low at this time. Trends are down in London. Early flowering has been reported in Brazil and it is off to a very good start. Coffee areas are dry again, and some producers are worried that the rains came too early and created premature flowering. The flowers could drop and reduce the production potential. There is also talk that the trees are old and not able to withstand stress and that lower production should be expected no matter what happens. There are some reports that trees are defoliating and that would mean less production overall. This is usually a dry time, and most producers say they are not real concerned. The cash market remains very quiet due to reports of weaker demand. Production for the next crop is starting to be offered in Central America as the harvest has started in the region.
Overnight News: Certified stocks are higher today and are about 1.755 million bags. The ICO composite price is now 122.96 ct/lb. Brazil will get mostly dry weather. Temperatures should average near to above normal. Colombia should get scattered to isolated showers. Central America and southern Mexico should get scattered showers. Temperatures should average near to above normal. ICE said that 27 notices were posted against September contracts today and that total deliveries for the month are now 629 contracts
Chart Trends: Trends in New York are mixed. Support is at 127.00, 126.00, and 119.00 December, and resistance is at 132.00, 133.00 and 135.00 December. Trends in London are down with objectives of 1920 and 1780 November. Support is at 1920, 1910, and 1890 November, and resistance is at 1980, 2030, and 2060 November.
General Comments: Futures were higher in New York and in London, and prices remain in a short-term trading range. New York is now at the top end of the trading range. Hurricane Irma has blasted the southeast US after hitting Sugar production areas in Florida. These areas saw some extreme winds and rains. There has also been flooding reported in Georgia and the Carolinas from their storm. The market expects firmer prices over time in part due to the moves in Brazil to increase ethanol production through higher gas prices and as the Indian harvest could be delayed due to wet conditions that would delay Sugarcane harvesting. Overall upside potential is limited as there are still projections for a surplus in the world production, and these projections for the surplus seem to be getting bigger over time. Trends are mixed, but the market has a positive feel to it. Production potential in Thailand seems strong as monsoon rains have been better than last year. It is raining in much of India now as the monsoon is active, and reports indicate good to heavy rains in many areas. Thailand is getting rains and production ideas are high. The rest of Southeast Asia is seeing average to above average rains so far this year.
Overnight News: Brazil should feature warm and dry weather for the next week.
Chart Trends: Trends in New York are mixed. Support is at 1430, 1410, and 1380 March, and resistance is at 1500, 1550, and 1580 March. Trends in London are mixed. Support is at 371.00, 366.00, and 360.00 December, and resistance is at 382.00, 384.00, and 391.00 December.
General Comments: Futures closed unchanged to a little lower. New York remains in a sideways range. Harvest reports are starting to appear in the wire services, and it looks like good to very good production will be seen this year in West Africa. Ivory Coast has now sold 1.32 million tons of Cocoa from the next crop into the world market, so part of the production in all of West Africa is now priced. The charts suggest that a short-term bottom has formed and traders talk now of increased demand to go against big world production as prices are now attractive for grinders and chocolate manufacturers. Ivory Coast is expected to have a big crop starting harvest this Fall, but smaller than last year. Ghana also expects a good crop this year and said on Friday that production could be over 800,000 tons. Nigeria and Cameroon are reporting good yields on the initial harvest. The growing conditions in other parts of the world are generally good. East African could use more rain, but Cocoa is growing. Good conditions are still seen in Southeast Asia.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see scattered showers in all areas. Temperatures should average near to above normal. Brazil will get mostly dry conditions or light showers and near to above normal temperatures. ICE certified stocks are lower today at 4.906 million bags. ICE said that 0 notices were posted against September contracts today and that total deliveries for the month are now 882 contracts.
Chart Trends: Trends in New York are mixed. Support is at 1880, 1850, and 1830 December, with resistance at 1940, 1980, and 2010 December. Trends in London are mixed. Support is at 1460, 1450, and 1430 December, with resistance at 1520, 1550, and 1570 December.
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