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Morning Softs. 09/08/17


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COTTON
General Comments: Cotton was a little lower in correction trading, but 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 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 or Monday. Bolls are opening and big rains now could mean even further damage due to the open bolls. Both are big producing states. It seems that Cotton is a big crop that is getting smaller this year as the storms come.
Overnight News: The Delta and Southeast will see mostly dry weather, although the Southeast could feel the impacts from Irma starting Monday. 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 73.19 ct/lb. ICE said that certified stocks are now 8,777 bales, from 9,293 bales yesterday. USDA said that net Upland Cotton export sales were 116,100 bales this year and 43,100 bales next year. Net Pima sales were 3,000 bales this year and 0 bales next year.
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 7580, 7720, and 7840 December.

Wire: Bloomberg News (BN) Date: Sep 7 2017 12:05:00
Cotton Production, Inventory Survey Before USDA WASDE Report

By Dominic Carey
(Bloomberg) — The following table shows results of a Bloomberg News survey
of as many as eight analysts for the USDA’s World Agricultural Supply and Demand
report on the 2017-18 cotton crop, which is scheduled for release at noon in
Washington on Sept. 12. Figures are in millions of bales.
================================================================
|——Survey Results——|USDA Priors
2017-18:| Avg | Low | High | Aug. | 2016-17
================================================================
US Production | 20.6| 20.0| 21.4| 20.6| 17.2
US Exports | 14.2| 13.8| 14.5| 14.2| 14.9
US End Stocks | 5.7| 5.3| 6.3| 5.8| 2.8
World Production | 117.8| 116.8| 119.0| 117.3| 106.5
World Consumption| 117.4| 116.5| 118.0| 117.4| 113.6
World End Stocks | 89.9| 89.0| 91.5| 90.1| 90.0

================================================================================
Analyst |————–U.S.————-| ——World—-
| | | End
Estimates: | Production | Exports |Stocks | Production | Consumption |Stocks
================================================================================
Doane | 21.0| 14.5| 5.9| 119.0| 118.0| 90.5
Love | | | | | |
Consulting | 20.0| 14.2| 5.3| 116.8| 117.5| 89.3
Price Futures| | | | | |
Group | 20.2| 14.2| 5.5|n/a |n/a |n/a
Rabobank | 20.9| 14.0| 6.3| 117.8| 117.5| 89.6
Rose | | | | | |
Consulting | 20.5| 14.5| 5.4| 117.9| 117.5| 89.5
Texas A&M; | | | | | |
Robinson | 20.3| 14.2| 5.6| 117.0| 117.4| 89.8
Varner Bros. | 21.4| 14.5| 6.3| 119.0| 117.5| 91.5
Wedbush | | | | | |
Securities | 20.3| 13.8| 5.5| 117.0| 116.5| 89.0

SOURCE: Bloomberg News

FCOJ
General Comments: : FCOJ closed higher after pushing close to important resistance on the charts at 150.00 November. No one is sure exactly where the hurricane will go this weekend, but all indications are that much of Florida can expect big rains and big winds as the storm passes through. Areas near Lake Okeechobee could see some extreme winds that could cause fruit drop and also some extreme rains that could damage the quality of the fruit. 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 0 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 150.00 and 165.00 November. Support is at 140.00, 138.00, and 135.00 November, with resistance at 146.00, 149.00, and 150.00 November.

COFFEE
General Comments: New York closed higher after trading both sides of unchanged, and London closed lower. New York is holding to a short-term trading range, but trends are 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 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. This is usually a dry time, and most producers say they are not real concerned. Commercials have been buyng on a scale down basis. The cash market remains very quiet on reports of weaker demand. Production for the next crop is starting to be offered in Central America. 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 1.732 million bags. The ICO composite price is now 121.36 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 1980, 2030, and 2060 November.

SUGAR
General Comments: Futures were lower, and prices remain in a short-term trading range. The market is watching Hurricane Irma. Irma appears headed to the southeast US and could hit Sugar production areas in Florida. It is currently a very powerful hurricane and will cause a lot of damage. It has already hurt some areas in the islands. 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, and it could mean that ethanol and bio fuels demand does not increase as much as expected. 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, 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 384.00, 391.00, and 404.00 December.

COCOA
General Comments: Futures closed a little lower, and trends are turning down in London. 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. 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 4.970 million bags. ICE said that 14 notices were posted against September contracts today and that total deliveries for the month are now 853 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 to down with objectives of 1460 and 1380 December. Support is at 1480, 1460, and 1450 December, with resistance at 1520, 1550, and 1570 December.

DJ CMAA Spot Cocoa Bean And Price Indications – Sep 7
Ex-dock or warehouse U.S. Eastern Seaboard North of Hatteras, in U.S. dollars
per metric ton. Settling price for September 1, 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 1 350 2,297.00
Main Crop Ivory Coast, Grade 1 260 2,207.00
Main Crop Nigerian, Grade 1 210 2,157.00
Ecuador 130 2,077.00
Sanchez f.a.q. 195 2,142.00
PPP Natural African Type Carton Cocoa Butter 2.79 5,432.13
Cocoa Press Cake – Natural 10/12% Butterfat 0.86 1,675.00
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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