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Softs Report 04/02/19


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Crop Progress
Date 21-Mar 24-Mar 2018 Avg
Cotton Planted 4 6 3
Sorghum Planted 13 8 9
Rice Planted 12 15 12
Rice Emerged 2 5 3
Oats Planted 25 22 25
Oats Emerged 25 21 23

Crop Condition
Very Poor Fair Good Very Good
Winter Wheat This Week 2 7 35 45 11
Winter Wheat Last Week
Winter Wheat Last Year 11 19 38 28 4

COTTON
General Comments Cotton was mixed, with nearby months a little lower and deferred months a little higher. The daily and weekly charts show that an up trend has started. There is talk that the US can have strong sales with other major exporters starting to run low on supplies. Everyone is waiting for the resolution of the US-China trade dispute, and the US government is indicating that a deal is going to be more difficult to achieve by the end of the month. The market anticipates that a deal is done in April. Both sides are negotiating the final points. USDA showed less than expected intended planted area to Cotton this year at 13.780 million acres. The market had anticipated a slight increase from the planted area of 14.099 million acres last year. In particular, producers in the southern and western Great Plains might tear out Winter Wheat and plant Cotton. The US weather continues to feature a lot of rain in the south, and fieldwork and initial planting in far southern areas is mostly delayed. However, some Cotton is getting planted and Cotton acres might be added if the Corn can’t get planted on time.
Overnight News: The Delta and Southeast should get mostly dry weather this week, but showers are possible late in the week. Temperatures should be mostly above normal this week, then cooler. Texas will have dry weather until some showers appear on Saturday. Temperatures will be above normal today, then trend to below normal. The USDA average price is now 71.82 ct/lb. ICE said that certified stocks are now 34,482 bales, from 34,482 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7800 and 8210 May. Support is at 7610, 7550, and 7520 May, with resistance of 7800, 7850, and 7890 May.

FCOJ
General Comments FCOJ was higher on what appeared to be speculative short covering. Ideas continue that production remains strong and demand does not and are backed up by the weekly Florida Movement and Pack report that shows that inventories inside the state are significantly higher than a year ago. The Oranges harvest remains active in Florida as the new crop begins to form. The Early and Mid harvest is over and producers are concentrating on harvesting Valencia. Flowers are starting to drop and some fruit is forming and developing. Mostly good conditions are reported in Brazil.
Overnight News: Florida should get scattered showers today and Friday. Temperatures will average near normal. Brazil should get scattered showers on Friday and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 120.00, 117.00, and 116.00 May, with resistance at 125.00, 128.00, and 131.00 May.

COFFEE
General Comments Futures were lower in New York and in London. Both markets moved to new lows, and New York made new contract lows. The trade is still worried about big supplies, especially from Brazil and low demand. Brazil had a big production year for the current crop, but the next crop should be less as it is the off-year for production. Ideas are that the current production of 62 or 63 or more million bags can become about 52 million bags next year. El Nino is fading, but remains in the forecast, and Coffee areas in Brazil could be affected by drought that could hurt production even more. Vietnam is active in its harvest, but producers are not willing to sell at current prices. It is still dry, and production potential for the next crop is getting hurt.
Overnight News: ICE certified stocks are higher today at 2.494 million bags. The ICO daily average price is now 95.21 ct/lb. Brazil will get mostly dry conditions with below normal temperatures util showers nd rains appear on Friday and Saturday. Vietnam will see some showers in central and northern areas today and tomorrow.
Chart Trends: Trends in New York are down with objectives of 90.00, 86.00, and 81.00 May. Support is at 91.00, 88.00, and 85.00 May, and resistance is at 94.00, 96.00 and 98.00 May. Trends in London are down with objectives of 1370 May. Support is at 1410, 1390, and 1360 May, and resistance is at 1460, 1480, and 1500 May.

SUGAR
General Comments: Futures closed higher, partially in sympathy with the strength in Crude Oil futures and in petroleum market futures more generally. The upside price potential might be somewhat limited. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support big production ideas. Reports that Brazilian mills might pause and give Sugarcane production a chance to improve helped support the market. Brazil weather is improving in all areas in recent weeks. However, it has turned drier in northern areas and there is concern that the dry season is starting early this year. Brazil has been using a larger part of its Sugarcane harvest to produce ethanol this year instead of Sugar, but Thailand has shown increased production this year. Ideas that production in India and Pakistan is being hurt by news that Indian mills are asking the government not to force them to sell Sugar into a depressed world market in order to try to maintain some control over operating losses. Very good conditions are reported in Thailand.
Overnight News: Brazil will get mostly dry weather until showers and rains appear on Friday and Saturday. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1230, 1220, and 1210 May, and resistance is at 1280, 1300, and 1340 May. Trends in London are down with objectives of 320.00 May. Support is at 321.00, 319.00, and 318.00 May, and resistance is at 330.00, 334.00, and 336.00 May.

COCOA
General Comments: Futures closed higher again in both markets on what appeared to be follow through speculative buying. The main crop harvest should be about over and mid crop harvest is still a month or more away. Ivory Coast arrivals are strong as are exports. However, arrivals have started to fade. The weekly pace just a month or two ago was about 15% ahead of a year ago and now is under 10% of a year ago. Ivory Coast arrivals are now estimated at 1.697 million tons, from 1.502 million last year. Exports are now 938, 229 tons. Growing conditions are generally good in West Africa. Some early week showers and cooler temperatures were beneficial, and most in West Africa expect a very good mid crop harvest. Cameroon and Nigeria are reporting less production and prices there are reported strong. Conditions appear good in East Africa and Asia, but East Africa has been a little dry as has Malaysia. Brazil Cocoa arrivals are now 232,911 tons, from 204,190 tons last year.
Overnight News: Scattered showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see showers. Temperatures should average above normal. Brazil will get mostly dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 4.207 million bags.
Chart Trends: Trends in New York are up with objectives of 2350, 2360, and 2400 May. Support is at 2240, 2220, and 2200 May, with resistance at 2280, 2330, and 2370 May. Trends in London are up with objectives of 1800 and 1900 May. Support is at 1700, 1680, and 1650 Mary, with resistance at 1730, 1750, and 1780 May.



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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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