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Morning Softs. 08/22/17


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COTTON
General Comments: Cotton was a little higher as the market tried to anticipate the crop condition reports. The condition improved overall in the USDA reports last night and some selling is possible today. However, futures have fallen a lot in the last couple of weeks, so selling pressure might be limited. It might take some selling from producers to push futures significantly lower at this time, and for now they are quiet. Prices remain under general pressure due to good weather forecasts for the crop and the higher US Dollar. The temperatures are more moderate in Texas and there have been some showers. The growing weather in the US Delta and Southeast is generally good as rains have been seen in many growing areas. Bolls are forming and starting to open in many areas. Some harvest has been reported in southern Texas and results have been very good. Monsoon rains are reported as very uneven in India and Pakistan. Some crops are lost due to the flooding, other areas have been too dry. Better rains are forecast for drier areas this week. The weekly charts show that futures might have completed a bear flag and could break some support areas and move lower in the next few weeks.
Overnight News: The Delta and Southeast will see showers through Thursday, then mostly dry conditions. Temperatures should average near to below normal. Texas will see dry scattered showers on Thursday nd Friday. Temperatures will average near normal. The USDA average price is now 66.61 ct/lb. ICE certified stocks are now 13,520 bales, from 13,983 bales yesterday.
Chart Trends: Trends in Cotton are mixed to down with no objectives. Support is at 6710, 6670, and 6630 December, with resistance of 6780, 6850, and 6900 December.

Crop Progress
Date 20-Aug 13-Aug 2016 Avg
Cotton Setting Bolls 88 80 91 88
Cotton Bolls Opening 12 10 15 14
Crop Condition
Very Poor Fair Good Very Good
Cotton This Week 5 6 26 48 15
Cotton Last Week 8 4 27 44 17
Cotton Last Year 4 14 35 39 8

FCOJ
General Comments: FCOJ closed lower yesterday as production and demand news was bearish for the market. Steger estimated Florida production for the coming year at 75 million boxes, up significantly from the 68 million boxes harvested this year. Nielsen said that demand continues to suffer. Sales were down 8.9% from the previous year in the latest four weeks and are now down 7.5% for the marketing year. The potential for storms increases dramatically for the next few weeks, and the systems are coming right in line with long-term normals. Florida weather is very good as it is now drier after some recent rains. There are no systems in the Atlantic to cause concern about tropical storm development that could be detrimental to trees and fruit. One System could develop and could move to Florida, but mostly just to drop heavy rains. No wind damage is in the forecast.. The demand side remains weak and there are plenty of supplies in the US. Trees now are showing fruit of good sizes and overall conditions are called good. Brazil crops remain in mostly good condition and production estimates are climbing after recent rains. The weekly charts show that a low could be near completion,
Overnight News: Florida should get scattered showers and near to above normal temperatures this week and good chances for showers and storms this weekend. Brazil should get mostly dry conditions and near to below normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 131.00, 129.00, and 128.00 September, with resistance at 138.00, 140.00, and 142.00 September.

COFFEE
General Comments: New York and London closed lower again on follow through selling tied to ideas of improving growing conditions in Brazil. There was not any other big news stories to affect prices. There has been some rains and flowering has been reported to get the next production cycle started. Ideas of smaller offers from Brazil and the rest of Latin America are still around, but ideas of weaker demand and the potential for increased production next year are bearish for prices. Both buyers and sellers have been quiet Producers are still worried about an extended outbreak of dry weather as flowering has started in Brazil, but most are not concerned as there is often dry weather at this time of year. The harvest in Brazil is starting to wind down and harvest reports have been mixed. Reports indicate that the quality of the beans harvested in Brazil often is not good and that many beans are small. Even so, many people talk of production above 50 million bags. .
Overnight News: Certified stocks are higher today and are about 1.634 million bags. The ICO composite price is now 124.82 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.
Chart Trends: Trends in New York are down with objectives of 126.00 and 115.00 September. Support is at 125.00, 123.00, and 120.00 September, and resistance is at 130.00, 135.00 and 137.00 September. Trends in London are mixed to down with objectives of 1990 and 1880 September. Support is at 2090, 2070, and 2040 September, and resistance is at 2150, 2180, and 2200 September.

DJ Uganda 10-Month Coffee Exports Surpass Annual Target — Market Talk
1113 GMT – Coffee exports from Uganda, Africa’s No.1 exporter surpassed annual target in the first 10 months of the season, aided by strong deliveries from the ongoing harvest and improved prices, says the state coffee body, UCDA. Shipments reached 3.84 million bags at the end of July, exceeding the 3.8 million bags projected for the entire season, which closes in October. Shipments rose 59% in July as farmers released more stocks amid climbing global prices over concerns about the size of the crop from Brazil. The value of exports nearly doubled in July to reach %50 million. Total 10-month robusta shipments, which account for the bulk of the crop are 44%, up, reaching 2.95 million bags.

SUGAR
General Comments: Futures in London and New York were a little higher in consolidation trading. Both markets failed to overcome nearby resistance, but held well and might try again later in the week. Most view the rally as just a short-term correction of the recent down trend. Prices have fallen a lot so some type of correction trading is possible. The big harvest in Brazil continues, and ideas of big offers from there has been a reason for prices to stay pinned near 1300 New York October. An increasing part of the Sugarcane production will likely shift to ethanol due to recent tax changes there. Production potential in Thailand seems improved for now as monsoon rains have been better than last year. It is raining in much of India now as the monsoon is active, but rains have been uneven. Some northwest areas have been flooded due to big rains. Other areas are too dry, but rains are forecast for dry areas this week. 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:
Chart Trends: Trends in New York are mixed. Support is at 1310, 1290, and 1240 October, and resistance is at 1360, 1370, and 1390 October. Trends in London are mixed to down with objectives of 344.00 and 335.00 October. Support is at 368.00, 360.00, and 357.00 October, and resistance is at 375.00, 378.00, and 381.00 October.

COCOA
General Comments: Futures closed a little higher in quiet trading. The market is holding in a big trading range and is now at the lower end of the range. There does not seem to be a good reason to push prices to new lows, but there is no real reason for prices to go much higher, either. Overall, the market is between harvests and no one seems to expect much to happen for another few weeks It is warmer and drier in Ivory Coast, but rains are in the forecast. The rest of West Africa is still getting showers and moderate temperatures. Chocolate manufacturers in general have reported improved sales volumes and ideas are that the better sales can continue as chocolate and cocoa are relatively cheap. Ivory Coast is expected to have a big crop starting harvest this Fall, but it should be smaller than last year. Ghana also expects a good crop this year. The growing conditions in other parts of the world are generally good. East African conditions are now called good. 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 5.119 million bags. ICE said that 3 notices were posted against September contracts today and that total deliveries for the month are now 577 contracts.
Chart Trends: Trends in New York are mixed. Support is at 1850, 1830, and 1810 December, with resistance at 1920, 1950, and 2010 December. Trends in London are mixed to down with objectives of 1420 December. Support is at 1460, 1450, and 1430 December, with resistance at 1520, 1550, and 1590 December.
Questions? Ask Jack Scoville today at 312-264-4322

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About the author


Jack Scoville is a futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar.

He offers brokerage services to an international clientele of agricultural producers, processors, exporters, and other professional traders.

Jack writes daily comments of the many products he specializes in, in three languages, English, Spanish, and Portuguese.

He has been quoted by most major wire services including Dow Jones, AP, and Reuters. His comments have also appeared in newspapers around the world and on various radio and television shows.

Jack offers a dedicated and high quality service for his clients. His industry contacts in South America, Europe, Asia, and North America provide him with a unique view of the markets. He also uses his own charting program for technical traders.

Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles. He has been a broker off the floor since then and has been with The PRICE Futures Group since it was established in 1988.

Contact Jack Scoville: (800) 769-7021 or at jscoville@pricegroup.com

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