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Morning Softs. 09/06/17

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DJ U.S. July Coffee, Cocoa Imports-Sep 6
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones.
—-Jul 2017—- —-Jun 2017—-
coffee kilograms pounds kilograms pounds
coffee, unroasted 121,583,891 268,092,480 132,837,441 292,906,557
coffee, roasted 8,065,803 17,785,096 7,749,562 17,087,784
coffee, soluble
instant 3,337,947 7,360,173 3,661,998 8,074,706
cocoa beans 22,636,141 49,912,691 26,951,691 59,428,479
sweetened bars/block
10 lbs or over 3,702,029 8,162,974 3,194,041 7,042,860
for retail candy 0 0 314 692
cocoa butter 8,796,798 19,396,940 9,153,619 20,183,730
cocoa paste,
not defatted 1,840,735 4,058,821 2,956,721 6,519,570
cocoa paste
defatted 5,693,829 12,554,893 2,822,000 6,222,510
cocoa powder,
unsweetened 11,171,984 24,634,225 11,379,821 25,092,505
cocoa powder,
sweetened 41,712 91,975 35,944 79,257
coating 2,370,470 5,226,886 2,284,438 5,037,186
candy containing
chocolate 11,835,813 26,097,968 12,425,314 27,397,817

General Comments: Cotton was sharply higher to limit up as the market tried to assess the damage to crops due to Hurricane Harvey and also started to prepare for Hurricane Irma. Texas crops potentially lost 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, but most of the losses would come from unharvested Cotton and Cotton in storage in Texas and a Little bit in Louisiana. 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. There is talk that at least 400,000 bales of Cotton were destroyed in the storm. Cotton in the Texas Panhandle was not affected in any big way, and Cotton in most of the Delta and Southeast should have escaped damage and loss. Irma is targeting the southeast US starting with Florida this weekend. A little change in direction could aim the worst of the storm at Cotton areas of either Georgia or North Carolina. Both are big producing states. It seems that Cotton is a big crop that is getting smaller this year as the storms come. Bolls are opening and big rains now could mean even further damage due to the open bolls.
Overnight News: The Delta and Southeast will see mostly dry weather. Temperatures should average near to below normal in the Delta and near to above normal in the Southeast. Texas will see mostly dry conditions. Temperatures will be variable. The USDA average price is now 73.47 ct/lb. ICE said that certified stocks are now 8,777 bales, from 9,293 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 7500, and 7580 December. Support is at 7370, 7320, and 7230 December, with resistance of 7510, 7550, and 7570 December.

DJ U.S. July Cotton Exports-Sep 6
In kilograms and in running 480-pound bales. Source. U.S. Department
(*)NOTE: Year ago figures reflect data reported at that time.
Data includes Exports and Re-Exports.
——- In Kilograms ——-
Jul 17 Jun 17 May 17 Jul 16(*)
Upland, under 1 inch 2,827,913 4,904,768 8,187,832 5,263,296
1 to 1 1/8 inch 75,672,084 87,567,339 99,016,232 79,087,449
upland 1 1/8 and over 172,286,467 163,852,611 228,701,165 106,318,094
Amer Pima, over 1 1/8 inc 5,119,156 6,999,298 10,804,720 7,253,877
All cotton 255,905,620 263,324,016 346,709,949 197,922,716
——- In Running 480-Pound Bales ——-
Jul 17 Jun 17 May 17 Jul 16(*)
Upland, under 1 inch 12,988 22,527 37,606 24,174
1 to 1 1/8 inch 347,559 402,194 454,778 363,246
upland 1 1/8 and over 791,305 752,569 1,050,416 488,315
Amer Pima, over 1 1/8 inc 23,512 32,148 49,626 33,317
All cotton 1,175,365 1,209,437 1,592,426 909,052

Crop Progress
Date 3-Sep 27-Aug 2016 Avg
Cotton Setting Bolls 96 93 98 97
Cotton Bolls Opening 25 18 32 30
Crop Condition
Very Poor Fair Good Very Good
Cotton This Week 6 5 24 46 19
Cotton Last Week 5 6 24 46 19
Cotton Last Year 3 12 37 39 9

General Comments: : FCOJ closed higher as a big hurricane threatens to hit the US and mostly to hit Florida. Irma has formed in the Atlantic and has the potential to move into the state and cause some significant damage. The storm is still several days away from hitting the USD, and there is potential for a front to move south and east from the Midwest this week to protect the eastern seaboard. The storm should get to the US or at least close to it by this weekend. 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 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 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 0 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 150.00 and 165.00 November. Support is at 142.00, 140.00, and 138.00 November, with resistance at 146.00, 149.00, and 150.00 November.

General Comments: New York and London closed lower. New York is holding to a short-term trading range, but trends turned down in London. There have been some rains and early flowering has been reported in Brazil. Pictures show that flowering 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 die and fall and that would mean yield losses for affected trees. This is usually a dry time, and most producers say they are not real concerned. Commercials are said to be the best buyers, but have been buying on a scale down basis. The cash market remains very quiet. Ideas of smaller offers from Brazil and the rest of Latin America go against ideas of weaker demand. Seasonal chart studies suggest that a rally in Coffee futures is likely in the coming weeks
Overnight News: Certified stocks are higher today and are about 1.724 million bags. The ICO composite price is now 121.02 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 564 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 1910, 1890, and 1860 November, and resistance is at 2020, 2060, and 2080 November.

General Comments: Futures were lower in early trading, then rallied on hopes for more ethanol demand and higher petroleum prices. The market is watching Hurricane Irma. Irma appears headed to the southeast US, but might slip into the Gulf of Mexico. It is currently a very powerful hurricane and will cause a lot of damage wherever it roams. on reports of increased producer selling and in response to the weakness in petroleum futures. The problems around Houston have improved as the weather has turned drier, and production and refining will be coming on-line all week. It has been a great recovery considering all of the flooding seen last week. Ideas are that higher petroleum prices that are likely from the hurricane in Houston could mean more demand for ethanol. 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. Trends are mixed. 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 384.00, 391.00, and 404.00 December.

General Comments: Futures closed a little lower in consolidation trading. It was a slow session with no real news seen to push prices in one direction or the other. Futures still show that the market is in a broad trading range and is now pushing to the upper end of the range. Harvest reports are starting to appear in the wire services. 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. It also means less selling pressure is coming at and after the main crop harvest this Fall. 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. The market is between harvests from West Africa 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. 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 4.982 million bags. ICE said that 0 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 mixed to up with objectives of 2090 December. Support is at 1940, 1920, and 1900 December, with resistance at 2010, 2030, and 2040 December. Trends in London are mixed. Support is at 1500, 1480, and 1460 December, with resistance at 1570, 1590, and 1620 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

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