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Morning Softs. 08/30/17


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COTTON
General Comments: Cotton was higher on follow through buying tied to the damage to crops due to Hurricane Harvey. The storm was expected to bring big rains of up to five feet into Texas and potentially hurt the quality and harvest progress in some areas of the state. No one is willing to say if any Cotton was lost or how much was lost as the catastrophic rains are still around. Reports indicate that about 600,000 acres of high quality Cotton could be damaged or destroyed in southern parts of the state, but most ideas are that 300,000 acres or less will be lost. Cotton in the Texas Panhandle was not expected to be affected in any big way. Big rains could move into the Delta late this week and the direction of the storm will be watched to see if Cotton in the Delta states will be lost or damaged. Trends are mixed on the daily charts. 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, but conditions are called good after more general rains in the last couple of weeks.
Overnight News: The Delta and Southeast will see showers and storms, mostly near the Gulf coast. Temperatures should average near to below normal in the Delta and near to above normal in the Southeast. Texas will see mostly dry conditions in the west except for a chance of showers on Saturday. Temperatures will average near normal. The USDA average price is now 69.11 ct/lb. ICE certified stocks are now 9,832 bales, from 9,832 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 6940, 6860, and 6750 December, with resistance of 7040, 7120, and 7220 December.

FCOJ
General Comments: FCOJ closed lower as no damaging weather is expected for Florida. There was a small System moving up the Atlantic Coast under the cover of Harvey in Texas, but it was just bring some rains to the state and was considered beneficial to the state and citrus production potential. It is gone now. Another System is forming in the Atlantic, but is too far away to worry about now. The market price remains generally weak due to ideas of better production potential for the coming harvest and reports of weak demand. Weak demand has been a feature for months as many consumers turn away from juice for various reasons. Florida 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.
Overnight News: Florida should get light showers or dry conditions and near to above normal temperatures this week. Brazil should get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 130.00, 129.00, and 128.00 September, with resistance at 136.00, 138.00, and 140.00 September.

COFFEE
General Comments: New York closed lower and London closed a little lower on reports of wet weather in Brazil. There have been some rains and flowing has been reported. Producers are worried that the rains came too early and created premature flowering. The flowers could die and fall and that would mean yield losses are possible for the coming crop. Speculators have been big sellers recently, but now appear to be trading on both sides of the market. Commercials are said to be the best buyers, but have been letting the market come to them in the current down trend. The cash market remains very quiet. Ideas of smaller offers from Brazil and the rest of Latin America go against ideas of weaker demand and the potential for increased production next year. The markets are quiet in Central America and producers are discouraged. There is still some Coffee to be sold, but buying interest is thin at beast and prices and differentials are not favorable. Vietnamese sellers remain quiet even with good prices as it is hard to buy from producers right now.
Overnight News: Certified stocks are higher today and are about 1.676 million bags. The ICO composite price is now 124.13 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 0 notices were posted against September Contracts today and that total deliveries for the month are now 553 contracts
Chart Trends: Trends in New York are mixed to down with objectives of 126.00 December. 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 mixed. Support is at 2060, 2030, and 1980 November, and resistance is at 2120, 2140, and 2150 November.

SUGAR
General Comments: Futures were higher in New York and London in early trading, but closed lower in reversal type trading. The market expects firmer prices over time as Brazil looks ready to produce more ethanol and less Sugar and as the Indian harvest could be delayed due to wet conditions that would delay sugarcane harvesting. Trends have turned up, but the reversal day could put he up trend at risk. The chart patterns still suggest that Sugar futures are in a longer term trading range. The big harvest in Brazil and ideas of big offers keep buyers mostly quiet. An increasing part of the Sugarcane production will likely shift to ethanol on recent tax changes there. 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 rains in many 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 to up with objectives of 1470 and 1540 October. Support is at 1350, 1330, and 1310 October, and resistance is at 1430, 1480, and 1510 October. Trends in London are mixed. Support is at 375.00, 368.00, and 360.00 October, and resistance is at 392.00, 398.00, and 402.00 October.

DJ Brazil Center-South Sugar Crush Up 0.3% in 1st Half of August -Unica
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the first half of August than they did a year earlier, according to industry group Unica.
Center-south mills crushed 45.3 million metric tons of cane in the period, an increase of 0.3% from the same period a year earlier, Unica said Monday. The mills produced 3.2 million tons of sugar, up 6%, and made 1.9 billion liters of ethanol, an increase of 0.2%.
The production mix for the first half of this month was 50% sugar and 50% ethanol. A year earlier, the mix was 48.6% sugar and 51.4% ethanol.

COCOA
General Comments: Futures closed higher in London, but lower in New York. It looks like the markets were getting into alignment yesterday, but the move lower in New York puts the up trend into question. However, it does not imply that a new down trend is starting. The charts suggest that a short-term bottom has formed and traders talk now of increased demand to go against big world production. The market is between harvests from West Africa Ivory Coast is expected to have a big crop starting harvest this Fall, but it should be smaller than the record production of the last year. Ivory Coast has sold a lot of the next crop already, but has now pulled offers as prices are cheap and as they want to see how much more will be available for export. 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 5.034 million bags. ICE said that 75 notices were posted against September contracts today and that total deliveries for the month are now 839 contracts.
Chart Trends: Trends in New York are up with objectives of 2090 December. Support is at 1940, 1900, and 1880 December, with resistance at 2010, 2030, and 2040 December. Trends in London are up with objectives of 1560, 1600, and 1610 December. Support is at 1500, 1480, and 1460 December, with resistance at 1590, 1620, and 1650 December.

DJ CMAA Spot Cocoa Bean And Price Indications – Aug 29
Ex-dock or warehouse U.S. Eastern Seaboard North of Hatteras, in U.S. dollars
per metric ton. Settling price for August 25, 2017. All pricing is considered
nominal. Source: Cocoa Merchants Association of America.
N/A denotes not available.
Type Differential/ Price
Ratio
Main Crop Ghana, Grade 1 375 2,308.00
Main Crop Ivory Coast, Grade 1 275 2,208.00
Main Crop Nigerian, Grade 1 220 2,153.00
Ecuador 145 2,078.00
Sanchez f.a.q. 200 2,133.00
PPP Natural African Type Carton Cocoa Butter N/A N/A
Cocoa Press Cake – Natural 10/12% Butterfat 0.83 1,600.0o

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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