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Morning Softs Report 10/05/17

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DJ U.S. August Coffee, Cocoa Imports-Oct 5
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones.
—-Aug 2017—- —-Jul 2017—-
coffee kilograms pounds kilograms pounds
coffee, unroasted 125,926,409 277,667,732 121,583,891 268,092,480
coffee, roasted 8,486,366 18,712,437 8,065,803 17,785,096
coffee, soluble
instant 4,490,640 9,901,861 3,337,947 7,360,173
cocoa beans 14,519,260 32,014,968 22,636,141 49,912,691
sweetened bars/block
10 lbs or over 3,184,332 7,021,452 3,702,029 8,162,974
for retail candy 0 0 0 0
cocoa butter 7,825,082 17,254,306 8,796,798 19,396,940
cocoa paste,
not defatted 3,014,573 6,647,133 1,840,735 4,058,821
cocoa paste
defatted 4,266,617 9,407,890 5,693,829 12,554,893
cocoa powder,
unsweetened 9,338,780 20,592,010 11,171,984 24,634,225
cocoa powder,
sweetened 62,385 137,559 41,712 91,975
coating 3,135,272 6,913,275 2,370,470 5,226,886
candy containing
chocolate 11,219,954 24,739,999 11,835,813 26,097,968

DJ U.S. August Coffee, Tea Export, Re-exports-Oct 5
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones. Data includes Exports and Re-Exports
—-Aug 2017—- —-Jul 2017—
-Exports/ReExports- kilograms pounds kilograms pounds
unroasted 3,663,563 8,078,156 3,468,525 7,648,098
roasted 512,333 1,129,694 520,432 1,147,553
extracts, essences
concentrates 347,648 766,564 503,417 1,110,034
tea and mate 1,575,263 3,473,455 1,427,493 3,147,622

DJ FAO Food Price Index Up 1.4% in September
By David Hodari
LONDON–World food prices rose in September due to more expensive vegetable oil and dairy prices, the United Nations’ Food and Agriculture Organization said Thursday.
The FAO’s food price index rose by 1.4% last month from August, up 4.3% on its September 2016 level.
Vegetable oil prices continued to rise, increasing 4.5% on month, hitting a seven-month high and rising for the second consecutive month. Lower palm oil production in Southeast Asia and slow planting in South America saw prices strengthen, the report said.
Dairy prices rose 4.5%, up 27.4% on the previous year, but 18.6% below their February 2014 peak, the FAO said.
The serial price index dropped 1.6% from August, with ample South American maize supplies and Russian wheat production weighing on prices, the U.N. body’s report said.
Meat prices are unchanged since July.
Sugar prices were also flat, after an August decline followed a sharp rally in July that was driven by speculation and currency considerations. Heavy global supply meant that prices were down 33% on the year, the report noted.

General Comments: Cotton was higher and in mid range after covering the range of trade seen for the last few weeks. It was a big day and a big volume day. Ideas are that the weather is good for maturing crops and harvest activities, but the harvest pace was very slow last week. 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 and USDA weekly condition reports have reflected some deterioration. The charts suggest that futures can trade between 6500 and 7500 for a while, so for now futures appear headed for a test of the lower end of the projected trading range. Bolls are opening and harvest is expanding under relatively good conditions as it has been relatively dry.
Overnight News: The Delta and the Southeast should be mostly dry this week, then the Southeast should see some precipitation this weekend. Temperatures should average above normal. Texas will see chances for showers today, otherwise dry conditions. Temperatures will be near to above normal. The USDA average price is now 67.25 ct/lb. ICE said that certified stocks are now 4,717 bales, from 4,234 bales yesterday. ICE said that 5 contracts were posted for delivery against October futures and that total deliveries for the month are now 31 contracts. USDA said that net Upland Cotton export sales were 161,000 bales this year and 28,600 bales next year. Net Pima sales were 23,600 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 6830, 6790, and 6740 December, with resistance of 6930, 6970, and 7000 December.

DJ U.S. August Cotton Exports-Oct 5
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 ——-
Aug 17 Jul 17 Jun 17 Aug 16(*)
Upland, under 1 inch 3,635,743 2,827,913 4,904,768 2,391,086
1 to 1 1/8 inch 61,932,550 75,672,084 87,567,339 82,860,512
upland 1 1/8 and over 134,087,366 172,286,467 163,852,611 117,373,711
Amer pima, over 1 1/8 inc 3,524,848 5,119,156 6,999,298 7,633,497
All cotton 203,180,507 255,905,620 263,324,016 210,258,806
——- In Running 480-Pound Bales ——-
Aug 17 Jul 17 Jun 17 Aug 16(*)
Upland, under 1 inch 16,699 12,988 22,527 10,982
1 to 1 1/8 inch 284,454 347,559 402,194 380,575
upland 1 1/8 and over 615,858 791,305 752,569 539,093
Amer pima, over 1 1/8 inc 16,189 23,512 32,148 35,060
All cotton 933,200 1,175,365 1,209,437 965,711

General Comments: FCOJ closed higher on follow through buying on ideas that the crop losses in Florida are very big. Another storm is forming off the cast of Central America and could bring more rains to the southern US, but for now looks to stay away from most of Florida. Ideas remain that the Orange groves are badly damaged in Florida due to Irma. New reports from growers associations suggest that crops in many areas were almost completely destroyed. Other areas suffered losses of 50% or more of the crop. Some growers say that trees will be stressed again next year due to the winds and rains from Irma. Florida weather is now drier. 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 daily chances for showers and storms and near to above normal temperatures. Some big rain totals are possible. Brazil should get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 150.00, 146.00, and 142.00 November, with resistance at 159.00, 160.00, and 163.00 November.

General Comments: New York and London closed a little lower. The trade is still trying to understand how much rain fell in Coffee areas in Brazil. The rains would promote flowering for the next crop. There should be enough precipitation to create new flowering in the next week or so, and some expect very good flowering to be seen. Some producers expect a very good flowering after the rain, while others say the rains were not enough. FC Stone in Brazil toured Coffee areas last week and noted defoliation of the trees. The problem was severe enough that they do not appear ready to support ideas of top production for the coming year, perhaps no matter how good it rains from no one. The weather in Brazil and the condition of the trees is getting attention as La Nina is coming and Coffee areas are already dry. There will be a lot of talk about the rains and what it means to production potential for the next few weeks.
Overnight News: Certified stocks are higher today and are about 1.829 million bags. The ICO composite price is now 119.58 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 mixed to down with no objectives. Support is at 119.00, 116.00, and 113.00 December, and resistance is at 127.00, 130.00 and 133.00 December. Trends in London are mixed to up with objectives of 2030 and 2090 November. Support is at 1990, 1960, and 1950 November, and resistance is at 2040, 2060, and 2080 November.

General Comments: Futures were higher in both New York and London and held support areas on the charts. Futures in both markets are still weak, but are in a range. Even professional Sugar traders do not seem sure of what to do, although the fundamental side of the market is not apparently price positive due to ideas of big world production. There were more rains in Brazil production areas through the weekend, and some good rains were reported in southern growing areas. The rains were welcome as it has been hot and dry. Drier weather is expected for the rest of the week and into the weekend. The rains come as the market thinks more and more about La Nina and the potential for drought in pasts of Brazil this year. 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 both markets.
Overnight News: Brazil should feature warm and dry weather.
Chart Trends: Trends in New York are mixed. Support is at 1400, 1380, and 1350 March, and resistance is at 1470, 1490, and 1520 March. Trends in London are mixed. Support is at 359.00, 354.00, and 348.00 December, and resistance is at 384.00, 391.00, and 404.00 December.

General Comments: Futures closed higher and made new highs for the move. New York December could not hold above 2100 and closed slightly lower, but all other months closed a little higher. The rally is coming as both Ivory Coast and Ghana look for ways to increase prices paid to farmers. World production ideas remain high. Harvest reports show good to very good production will be seen this year in West Africa. 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. Traders talk of increased demand to go against big world production as prices are now attractive for grinders and chocolate manufacturers. New grind data should be released later this month.
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 4.536 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 2100 and 2200 December. Support is at 1990, 1960, and 1950 December, with resistance at 2040, 2060, and 2080 December. Trends in London are mixed. Support is at 1520, 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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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

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