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Morning Softs Report 11/09/17

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General Comments: Cotton was higher and futures closed back in the middle of the recent trading range. Chart patterns imply that the market is content to hold at current levels at least through the USDA reports. Harvest is progressing, but farmers are reported to be quiet sellers right nos so the cash market has some demand that needs to be satisfied. Trade estimates of production losses due to hurricanes and cold weather will be compared to the USDA data. Reports that Cotton could have been lost in West Texas due to freezing temperatures are thought to be fairly minimal. There were losses from the hurricanes, but only big enough losses that futures have held, not rallied sharply. Harvest conditions are good in just about all areas. The market hopes for increased US export demand, and demand has improved over the last few weeks.
Overnight News: The Delta and the Southeast should get drier weather through this weekend. Temperatures should be on both sides of normal. Texas will see mostly dry conditions. Temperatures will be on both sides of normal. The USDA average price is now 67.13 ct/lb. ICE said that certified stocks are now 41,922 bales, from 39,322 bales yesterday. USDA said that net Upland Cotton export sales were 205,300 bales this year and 31,200 bales next year. Net Pima sales were 13,400 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 6800, 6780, and 6750 December, with resistance of 6920, 7000, and 7020 December.

Wire: Bloomberg News (BN) Date: Nov 6 2017 13:10:00
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 nine 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 Nov. 9. Figures are in millions of bales.
|——Survey Results——|USDA Priors
2017-18:| Avg | Low | High | Oct. | 2016-17
US Production | 20.9| 20.1| 21.5| 21.1| 17.2
US Exports | 14.5| 14.2| 15.0| 14.5| 14.9
US End Stocks | 5.6| 5.3| 6.1| 5.8| 2.8
World Production | 120.3| 118.5| 121.4| 120.9| 106.6
World Consumption| 118.2| 117.8| 119.0| 118.0| 113.7
World End Stocks | 91.6| 89.0| 92.4| 92.4| 89.6
Analyst |————U.S.————| ——World—-
| | | End
Estimates: |Production |Exports |Stocks |Production |Consumption |Stocks
================================================================================ | 20.6| 14.5| 5.3| 118.5| 119.0| 89.0
Doane | 21.0| 14.8| 5.5| 120.0| 118.5| 91.0
Love Consulting | 20.8| 14.5| 5.5| 120.5| 118.0| 92.1
Price Futures Group| 20.9| 14.5| 5.5|n/a |n/a |n/a
Rabobank | 21.1| 14.2| 6.1| 120.5| 118.0| 91.8
Rose Consulting | 21.5| 15.0| 5.9| 121.4| 118.6| 92.3
Texas A&M; Robinson| 21.1| 14.5| 5.8| 120.9| 118.0| 92.4
Varner Bros. | 20.1| 14.5| 5.4| 120.3| 118.0| 91.9
Wedbush Securities | 21.0| 14.3| 5.7| 120.5| 117.8| 92.2
SOURCE: Bloomberg News

China to Resume State Cotton Sales From March 12, 2018: NDRC
2017-11-09 03:28:34.932 GMT
By Bloomberg News
(Bloomberg) — China will resume sales of state-reserve
cotton from March 12 to the end of August, National Development
and Reform Commission says in statement.
* Daily sales volume set at 30,000 tons
* China won’t stockpile new cotton before end of Feb. next year
based on supply and demand

General Comments: FCOJ closed narrowly mostly a little higher as the market waits for the USDA production reports today. It was a low volume session with most activity involving positioning before the reports. USDA reports last month showed big production loss potential from the hurricane, but not the losses expected by the trade. USDA is expected by many to show further dramatic cuts in production in coming reports, but production has already been cut severely from last year and initial estimates for production this year, so how much additional loss needs to be calculated remains to be seen. USDA has had more time to do a more complete survey and it is expected that as USDA learns more about the damage it will be able to drop production estimates even more than it has. The demand side remains weak.
Overnight News: Florida should get dry weather and near to above normal temperatures. Scattered showers are expected this weekend. Brazil should get mostly dry conditions and near to above normal temperatures. Some showers are possible this weekend. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 163.00, 166.00, and 171.00 January. Support is at 157.00, 155.00, and 152.00 January, with resistance at 163.00, 165.00, and 166.00 January.

Wire: Bloomberg News (BN) Date: Nov 6 2017 13:45:00
Florida Orange Production Survey Before USDA’s Citrus Report
By Dominic Carey
(Bloomberg) — The following table shows results of a
Bloomberg News survey of three analysts about the 2017-18
Florida orange crop. The USDA will release their estimate at
noon in Washington on Nov. 9. Figures are in millions of 90-lb
Summary of Results: | Output
Survey Avg | 48.3
Survey Range | 35-58
USDA Oct. Estimate | 54.0
USDA 2016-17 Crop | 68.75
Analyst Estimates:
Price Futures Group | 52.0 | 58.0
Infinity Trading | 35.0
SOURCE: Bloomberg News

General Comments: New York was higher and London were lower on ideas that there is plenty of Coffee available despite reduced offers from Brazil and on reports of little damage to crops from the typhoon that hit Vietnam over the weekend. The main feature has been the London weakness as New York has held. New York futures could be forming a bottom at this time. Ideas are that the funds and industry need to buy in New York, but Arabica demand is tepid and differentials bids remain weak. Europe is paying better than the US, but differentials overall are not strong.. Rains are back in the forecast for parts of the Coffee areas of Brazil. 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.
Overnight News: Certified stocks are higher today and are about 1.910 million bags. The ICO composite price is now 117.68 ct/lb. Brazil will get more showers late this week and this weekend. Temperatures should average near to below normal today and tomorrow, then 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. Support is at 122.00, 121.00, and 119.00 December, and resistance is at 128.00, 130.00 and 133.00 December. Trends in London are down with objectives of 1710 January. Support is at 1800, 1770, and 1740 January, and resistance is at 1850, 1880, and 1900 January.

Vietnam Coffee Exports Seen at 79,078 Tons in Oct.: Customs
2017-11-08 08:43:11.729 GMT
By Mai Ngoc Chau
(Bloomberg) — Oct.’s coffee exports seen falling 0.5% m/m,
General Department of Vietnam Customs posts monthly report on
* 10-month coffee exports seen at 1.18m tons, down 22.1% y/y
* NOTE: Vietnam Coffee Exports Seen at 79,500 Tons in Sept.:
* NOTE: Country shipped 117,037 tons of coffee in Oct., 2016:
customs website
* NOTE: Vietnam is world’s largest producer of robusta beans

General Comments: Futures were higher again, with London leading the way on what appears to be new demand for White Sugar at a time when Brazil mills are choosing to produce more ethanol. Trends are turning up in London and in New York after the price action so far this week. There have been no big demand reports, but the price action and the intermarket spreads suggest that someone is short in refined Sugar at this time. The fundamental side of the market remains mostly negative due to ideas of big world production as seen in the ISO estimates earlier in the week. 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 scattered showers late this week and this weekend. Temperatures should be near to below normal today and tomorrow, then near to above normal
Chart Trends: Trends in New York are mixed to up with objectives of 1510, 1530, and 1560 March. Support is at 1430, 1400, and 1380 March, and resistance is at 1490, 1520, and 1530 March. Trends in London are up with objectives of 394.00 and 406.00 March. Support is at 380.00, 377.00, and 374.00 March, and resistance is at 393.00, 399.00, and 405.00 March.

General Comments: Futures closed higher and trends are now up in both New York and London. At least one advisory and analytical brokerage was said to be issuing buy recommendations yesterday afternoon. Callebrut said yesterday that its Cocoa grinding margins were near six-year highs, implying good demand for finished products like Chocolate. The market has been in a uptrend since August and held the uptrend line in the last few sessions. World production ideas remain high. Harvest reports show good to very good production will be seen this year in West Africa. The growing conditions in other parts of the world are generally good. East Africa is getting better rains now along with cooler temperatures. 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: A few isolated showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see mostly dry conditions. Temperatures should average above normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 3.957 million bags.
Chart Trends: Trends in New York are up with objectives of 2220, 2280, and 2370 December. Support is at 2160, 2120, and 2100 December, with resistance at 2230, 2260, and 2280 December. Trends in London are up with objectives of 1680 and 1760 December. Support is at 1600, 1560, and 1530 December, with resistance at 1630, 1650, and 1690 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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