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Moring Softs Report 10/19/17

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General Comments: Cotton was mixed, with nearby months a little lower and deferred months a little higher. The daily charts show the potential for prices to work lower as the harvest continues in the US. The weekly charts show down trends and the potential for futures to test strong support near 6500 December with an extension possible to about 6250 December. Ideas are that the recent weather has been good for maturing crops and harvest activities. 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. 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 get mostly dry weather until showers and storms appear on Sunday and Monday. Temperatures should average mostly above normal. Texas will see mostly dry conditions except for a few showers on Friday and Saturday. Temperatures will be mostly above normal. The USDA average price is now 65.84 ct/lb. ICE said that certified stocks are now 3,586 bales, from 4,465 bales yesterday. USDA said that net Upland Cotton export sales were 253,200 bales this year and 8,800 bales next year. Net Pimsa sales were 17,500 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed to down with objectives of 6740 and 6580 December. Support is at 6740, 6700, and 6660 December, with resistance of 6860, 6900, and 6930 December.

General Comments: FCOJ closed lower and moved back close to recent lows. Futures are still reacting to the USDA reports of last week that showed big production loss potential from the hurricane, but not the losses expected by the trade. Florida sources told wire services they expect USDA to show further dramatic cuts in production in coming reports, and these ideas are creating new buying interest at current levels. Ideas remain that the Orange groves are badly damaged in Florida due to Irma. 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. 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 are stressed from hot and dry weather.
Overnight News: Florida should get daily chances for showers and storms and near to above normal temperatures. Brazil should get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 144.00 and 135.00 November. Support is at 150.00, 146.00, and 142.00 November, with resistance at 155.00, 160.00, and 165.00 November.

General Comments: Both markets were a little higher yesterday. Trends are still down on the charts in New York, but an increasing amount of the trade is interested in buying the break and establishing long positions. London is still holding a trading range. Ideas that the coming Brazil crop could be big remain, even through Coffee areas remain generally dry. It is dry now, but some showers are possible again this weekend. Trees remain stressed and there are concerns that flowers are being aborted. Most areas will need to see some consistent rainfall now to keep the potential for a big crop alive as trees need to recover from stress from the production year last year and also the cold and dry Winter. 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 are still reports of defoliation to trees, and that does not support ideas of big production potential down the road.
Overnight News: Certified stocks are higher today and are about 1.863 million bags. GCA stocks are now 7.189 million bags, from 7.266 million at the end of August. The ICO composite price is now 118.86 ct/lb. Brazil will get mostly dry weather, but showers are likely starting Sunday. Temperatures should average near to above normal. Colombia should get scattered to isolated showers. Central America and southern Mexico should get scattered showers and storms. Temperatures should average near to above normal.
Chart Trends: Trends in New York are down with no objectives. Support is at 121.00, 119.00, and 116.00 December, and resistance is at 127.00, 128.00 and 130.00 December. Trends in London are mixed to down with objectives of 1960, 1920, and 1780 November. Support is at 1960, 1930, and 1910 November, and resistance is at 2000, 2020, and 2030 November.

General Comments: Futures were a little higher in both markets in range trading. The price action yesterday implied that a move lower is possible as the market appears to be looking for good demand. There was some talk of Far East demand that is now being filled by India and the Middle East due to higher prices from Thailand. But there does not seem to be any big demand coming from any real direction, especially as China has cut back on imports. The fundamental side of the market remains mostly negative due to ideas of big world production. Brazil has turned dry after recent rains, and more rain is needed after the dry Winter. Some showers could appear this weekend. China has had some variable weather that could cut  production, but still has plenty of Sugar in storage. 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.
Overnight News: Brazil should feature warm and dry weather through Saturday and scattered showers starting on Sunday.
Chart Trends: Trends in New York are mixed. Support is at 1400, 1380, and 1350 March, and resistance is at 1450, 1470, and 1490 March. Trends in London are mixed to down with objectives of 357.00, 344.00, and 340.00 December. Support is at 366.00, 359.00, and 354.00 December, and resistance is at 373.00, 377.00, and 380.00 December.

General Comments: Futures closed mostly a little lower in New York and a little higher in London. The trends are mostly sideways after failing to hold a breakout from last week. Traders hope for gains in the grind in North America and Asia after a big European grind was reported last week. World production ideas remain high. Harvest reports show good to very good production will be seen this year in West Africa. Ghana and Ivory Coast expects a very good crop this year. Nigeria and Cameroon are reporting good yields on the initial harvest, and also good quality. The growing conditions in other parts of the world are generally good. East Africa is getting better rains now. 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.
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 4.317 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2030, 2000, and 1990 December, with resistance at 2080, 2100, and 2130 December. Trends in London are mixed. Support is at 1530, 1520, and 1480 December, with resistance at 1570, 1590, and 1600 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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