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Morning Softs. 09/25/17


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COTTON
General Comments: Cotton was mixed in consolidation trading. A quiet session came as the market waited to see the results of the European elections over the weekend and also to hear more reports of storm damage and to see the track of Maria and any other storms that might develop. The storm track for the new systems is away from the US for now. The harvest ahead seems to be the most important factor as USDA is expecting a huge crop, but storms have damaged production potential since the last report. The charts suggest that futures can trade between 6500 and 7500 for a while. Production and yield estimates from the country will be important after the storms hit Texas and the Southeast as there could have been yield and quality losses. USDA was able to show increased production potential instead of a slight decrease that had been expected by much of the trade. Bolls are opening and harvest will be expanding.
Overnight News: The Delta and the Southeast should be mostly dry. Temperatures should average above normal. Texas will see daily  chances for showers and some significant precipitation this week. Temperatures will be above normal. The USDA average price is now 67.04 ct/lb. ICE said that certified stocks are now 2,414 bales, from 2,414 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 6740 and 6580 December. Support is at 6790, 6750, and 6700 December, with resistance of 6910, 6940, and 7000 December.

DJ USDA Volume Of Cotton Classed Report – Sep 22
Data quoted in bales for week ending Sep 21. Totals may not add due
to rounding. * denotes data withheld to avoid disclosure of individual
producer information. Source: USDA
Weekly Season Weekly Season
Southeast 818 818 Southwest 145042 905295
NC – – Okla – –
SC – – Texas 145,042 905,295
Ga 818 818 Kansas – –
Ala – –
Fla – – Far West 0 0
Va – – NM – –
Ariz * –
Delta 1525 1525 Calif – –
Miss 945 945
Tenn – – Pima – –
Mo – – Other 0 0
Ark – – Total US 147,385 907,638
La 580 580 pct tenderable 82.1 87.8

DJ On-Call Cotton – Sep 21
As of Sep 15. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
Source: CFTC
*denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Oct 17 0 0 0 0 0 0
Dec 17 31,191 31,912 -721 17,431 18,396 -965
Mar 18 38,293 38,239 54 4,319 4,539 -220
May 18 21,322 20,360 962 553 624 -71
Jul 18 20,620 20,232 388 1,195 1,270 -75
Oct 18 0 0 0 0 0 0
Dec 18 12,695 11,782 913 9,625 9,681 -56
Mar 19 3,099 3,099 0 528 528 0
May 19 1,263 1,263 0 0 0 0
Jul 19 1,041 1,041 0 0 0 0
Dec 19 2,283 2,283 0 3,370 3,251 119
Mar 20 842 842 0 146 146 0
Total 132,649 131,053 1,596 37,167 38,435 -1,268
Open Change
Int
Oct 17 173 200 -27
Dec 17 141,088 149,427 -8,339
Mar 18 71,342 68,749 2,593
May 18 8,792 7,557 1,235
Jul 18 5,401 5,613 -212
Oct 18 1 1 0
Dec 18 14,708 14,456 252
Mar 19 261 242 19
May 19 1 1 0
Jul 19 148 134 14
Dec 19 41 27 14
Mar 20 0 0 0
Total 241,956 246,407 -4,451

COT — Supplemental Report – Option and Futures Combined Positions as of September 19, 2017
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COTTON NO. 2 – ICE FUTURES U.S.
CFTC Code #033661 Open Interest is 307,832
: Positions :
: 78,765 15,979 67,949 67,326 203,233 79,091 5,673 293,133 292,835: 14,699 14,996
: Changes from: September 12, 2017 (Change in open interest: -7,167) :
: -6,473 -454 498 696 -6,831 -639 1 -5,918 -6,786: -1,249 -381
: Percent of Open Interest Represented by Each Category of Trader :
: 25.6 5.2 22.1 21.9 66.0 25.7 1.8 95.2 95.1: 4.8 4.9
: Total Traders: 290 Number of Traders in Each Category :
: 112 61 83 60 71 30 11 244 191:
——————————————————————————————————————-

FCOJ
General Comments: FCOJ closed lower as Hurricane Maria continued to spin in the Atlantic and stay away from Florida. Ideas remain that the Orange groves are badly damaged in Florida due to Irma. Ideas are that at least 10% of the crop was lost, and many say the damage and losses are much more extensive than that. Both the daily and weekly charts are now showing up trends. Florida weather is now drier, but showers are still around, and the damage is done. The demand side remains weak and there are plenty of supplies in the US. Trees that are still alive now are showing fruit of good sizes, although many have lost a lot of the fruit. 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 19 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 146.00, 142.00, and 140.00 November, with resistance at 152.00, 157.00, and 159.00 November.

DJ USDA Cold Storage: Totals-Sep 22
WASHINGTON (Dow Jones)–U.S. stocks of pork bellies in freezers
totaled 19.080 million pounds, in August, 8.4% above the previous
month, but 40.5% below August 2016, the U.S. Department Agriculture
said Friday.
In thousand pounds.
public
Aug 31 Jul 31 Aug 31 Jul 31 warehouse
2017 2017 2016 2016 stocks/Aug
pork bellies 19,080 17,602 32,053 50,733
orange juice 471,509 505,491 653,114 710,973
french fries 919,604 922,100 904,433 882,810
other potatoes 270,595 279,584 256,089 266,218
chicken rstr (whole) 22,227 22,807 22,965 24,617
ham 203,636 194,968 226,070 188,441
ttl pork 575,681 554,854 608,955 598,592 507,601
ttl beef 476,260 431,836 476,593 469,735 469,368
ttl red meat 1/ 1,099,635 1,029,788 1,130,461 1,118,065 1,024,644
ttl chicken 780,154 798,120 773,705 823,897
ttl turkey 607,855 595,623 532,579 530,278
ttl poultry 1,391,877 1,397,646 1,315,876 1,363,566 1,290,091

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of September 19, 2017
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
FRZN CONCENTRATED ORANGE JUICE – ICE FUTURES U.S. (CONTRACTS OF 15,000 POUNDS) :
CFTC Code #040701 Open Interest is 12,190 :
: Positions :
: 3,855 7,025 1,308 0 0 1,280 1,110 79 841 416 2,235 :
: Changes from: September 12, 2017 :
: -532 -99 -47 0 0 -237 -610 -55 93 8 -124 :
: Percent of Open Interest Represented by Each Category of Trader :
: 31.6 57.6 10.7 0.0 0.0 10.5 9.1 0.6 6.9 3.4 18.3 :
: Number of Traders in Each Category Total Traders: 71 :
: 20 15 5 0 0 8 8 . 13 10 12 :
—————————————————————————————————————-

COFFEE
General Comments: New York and London closed lower in response to some forecasts for rains to improve in Brazil over the next couple of weeks. Both markets remain in up trends for now, but New York has given back a significant part of the rally. The weather in Brazil and the condition of the trees is an important market factor as La Nina is coming and Coffee areas are already dry. Early flowering has been reported in Brazil due to early rains, but it has turned dry again. Some producers are worried that the rains created premature flowering and that these flowers will fall and hurt overall production potential. There are some reports that trees are defoliating and that would mean less production overall. There are also reports of Broca infestations in some areas. The cash market remains quiet and tight. Production for the next crop is starting to be offered in Central America as the harvest has started.
Overnight News: Certified stocks are near unchanged today and are about 1.812 million bags. The ICO composite price is now 126.35 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 884 contracts
Chart Trends: Trends in New York are mixed to up with objectives of 142.00 December. Support is at 132.00, 129.00, and 127.00 December, and resistance is at 139.00, 143.00 and 145.00 December. Trends in London are mixed to up with objectives of 2030 and 2090 November. Support is at 2000, 1960, and 1920 November, and resistance is at 2040, 2060, and 2080 November.

COT — Supplemental Report – Option and Futures Combined Positions as of September 19, 2017
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COFFEE C – ICE FUTURES U.S.
CFTC Code #083731 Open Interest is 226,543
: Positions :
: 33,156 52,429 62,075 77,968 96,580 43,313 7,579 216,513 218,663: 10,031 7,880
: Changes from: September 12, 2017 (Change in open interest: -12,206) :
: -3,759 -16,859 879 -7,135 4,640 -557 -1,034 -10,571 -12,373: -1,635 167
: Percent of Open Interest Represented by Each Category of Trader :
: 14.6 23.1 27.4 34.4 42.6 19.1 3.3 95.6 96.5: 4.4 3.5
: Total Traders: 449 Number of Traders in Each Category :
: 133 132 148 124 118 29 17 361 350:
——————————————————————————————————————-

DJ Brazil Cuts Estimate for 2017 Total Coffee Harvest to 44.8 Million Bags
SÃO PAULO–Brazilian coffee farmers grew 44.8 million 132-pound bags of coffee in the 2017 season, crop agency Conab said Thursday, cutting its forecast from May.
Conab in May forecast a crop of 45.56 million bags of coffee for this year. In the 2016 season Brazil produced 51.4 million bags of coffee.
The country grew 34.1 million bags of the arabica variety of beans this year, down from 43.4 million bags last year, Conab said. Production of the robusta variety rose to 10.7 million bags from 8 million bags last year.
In May, Conab forecast 35.43 million bags of arabica and 10.13 million bags of robusta for 2017.

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/19/2017
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Robusta Coffee Futures and Options – ICE Futures Europe
126,290 69,403 65,784 5,540 7,135 2,946
Percent of Open Interest Represented by Each Category of Trader
100.0% 55.0% 52.1% 4.4% 5.7% 2.3%
Number of Traders in Each Category
159 52 46 11 7 7
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
16,923 18,800 11,513 1,556 2,110 12,997
Percent of Open Interest Represented by Each Category of Trader
13.4% 14.9% 9.1% 1.2% 1.7% 10.3%
Number of Traders in Each Category
21 34 21 9 12 20
Nonreportable Positions
=======================
Long Short
=======================
5,412 5,005
Percent of Open Interest Represented by Each Category of Trader
4.3% 4.0%

SUGAR
General Comments: Futures were a little lower in both New York and London on more forecasts for rains in Brazil production areas within the next week or two. The rains could help push yields at this time. Cash markets show weakening differentials between whites and raw, so London remains the weaker futures market. Weaker differentials imply either too much production or too little demand or both. Brazil mills are now processing more for ethanol than Sugar as the ethanol pays better and processors can get some better tax treatment in the country. Upside price potential is limited as there are still projections for a surplus in the world production,and these projections for the surplus seem to be bigger. Trends are sideways in New York and sideways to down in London, and the weakness in London could be something to push New York lower. 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. 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 1490, 1520, and 1550 March. Trends in London are mixed. Support is at 364.00, 360.00, and 354.00 December, and resistance is at 374.00, 384.00, and 391.00 December.

COT — Supplemental Report – Option and Futures Combined Positions as of September 19, 2017
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SUGAR NO. 11 – ICE FUTURES U.S.
CFTC Code #080732 Open Interest is 859,639
: Positions :
: 120,779 192,816 144,513 316,968 433,802 205,051 14,689 787,311 785,820: 72,329 73,820
: Changes from: September 12, 2017 (Change in open interest: -113,551) :
: 5,034 -18,159 -69,095 -51,788 -17,673 5,109 -10,739 -110,741 -115,666: -2,810 2,115
: Percent of Open Interest Represented by Each Category of Trader :
: 14.0 22.4 16.8 36.9 50.5 23.9 1.7 91.6 91.4: 8.4 8.6
: Total Traders: 234 Number of Traders in Each Category :
: 59 63 72 81 73 23 12 199 188:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/19/2017
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE White Sugar Futures and Options- ICE Futures Europe
74,113 37,380 33,944 9,981 9,644 737
Percent of Open Interest Represented by Each Category of Trader
100.0% 50.4% 45.8% 13.5% 13.0% 1.0%
Number of Traders in Each Category
139 50 42 12 4 5
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
14,095 19,278 3,099 2,752 624 2,395
Percent of Open Interest Represented by Each Category of Trader
19.0% 26.0% 4.2% 3.7% 0.8% 3.2%
Number of Traders in Each Category
14 30 10 8 6 10
Nonreportable Positions
=======================
Long Short
=======================
3,674 4,391
Percent of Open Interest Represented by Each Category of Trader
5.0% 5.9%

COCOA
General Comments: Futures closed lower on long liquidation at the end of the week, mostly by funds and other speculators. Harvest reports show good to very good production will be seen this year in West Africa. Cocoa is offered in all countries, although Ivory Coast has sold a big part of their expected production. 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 4.705 million bags.
Chart Trends: Trends in New York are mixed. Support is at 1950, 1930, and 1880 December, with resistance at 2000, 2020, and 2050 December. Trends in London are mixed. Support is at 1460, 1450, and 1430 December, with resistance at 1510, 1520, and 1550 December.

DJ CMAA Spot Cocoa Bean And Price Indications – Sep 22
Ex-dock or warehouse U.S. Eastern Seaboard North of Hatteras, in U.S. dollars
per metric ton. Settling price for September 22, 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 1 340 2,334.00
Main Crop Ivory Coast, Grade 1 260 2,244.00
Main Crop Nigerian, Grade 1 210 2,194.00
Ecuador 180 2,164.00
Sanchez f.a.q. NA
PPP Natural African Type Carton Cocoa Butter NA
Cocoa Press Cake – Natural 10/12% Butterfat NA

COT — Supplemental Report – Option and Futures Combined Positions as of September 19, 2017
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COCOA – ICE FUTURES U.S.
CFTC Code #073732 Open Interest is 289,230
: Positions :
: 46,431 84,968 60,688 127,856 116,628 35,927 16,694 270,902 278,978: 18,328 10,252
: Changes from: September 12, 2017 (Change in open interest: 733) :
: -3,265 -9,662 2,006 2,347 7,757 201 173 1,290 274: -557 459
: Percent of Open Interest Represented by Each Category of Trader :
: 16.1 29.4 21.0 44.2 40.3 12.4 5.8 93.7 96.5: 6.3 3.5
: Total Traders: 263 Number of Traders in Each Category :
: 84 83 93 49 38 27 10 211 184:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 09/19/2017
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Cocoa Futures and Options – ICE Futures Europe
320,700 206,115 175,486 20,667 23,887 20,366
Percent of Open Interest Represented by Each Category of Trader
100.0% 64.3% 54.7% 6.4% 7.4% 6.4%
Number of Traders in Each Category
155 50 47 17 8 12
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
23,251 49,925 20,841 1,688 676 24,695
Percent of Open Interest Represented by Each Category of Trader
7.3% 15.6% 6.5% 0.5% 0.2% 7.7%
Number of Traders in Each Category
16 30 17 12 8 19
Nonreportable Positions
=======================
Long Short
=======================
3,076 4,824
Percent of Open Interest Represented by Each Category of Trader
1.0% 1.5%
Questions? Ask Jack Scoville today at 312-264-4322

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The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2017



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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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