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Softs Report 05/31/19


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DJ U.S. Export Sales: Weekly Sales Totals – May 31
For the week ended May 23, in thousand metric tons, except cotton in
thousand running bales. Net changes in commitments are gross sales,
less cancellations, buy-backs and other downward adjustments. Total
commitments are total export shipments plus total sales.
The marketing year for wheat and barley began Jun 1, cotton and
and rice Aug 1, corn, soybeans and sorghum Sep 1, and soy meal and
soy oil Oct 1. Source: USDA
wk’s net chg total
in commitments undlvd sales
this yr next yr this yr last yr this yr next yr
wheat 153.0 411.8 25868.1 23743.3 2401.4 3733.5
hrw 79.2 201.3 9397.8 9306.4 1167.9 1473.9
srw 0.4 31.7 3362.1 2539.1 233.0 664.3
hrs 45.4 118.7 7152.4 6172.2 539.9 812.9
white 28.0 60.2 5451.9 5320.3 432.6 618.6
durum 0.0 0.0 503.9 405.4 27.9 163.7
corn 906.8 76.5 48247.1 54461.7 8646.5 2590.4
soybeans 455.8 22.0 46228.7 55465.3 11825.0 1445.9
soymeal 183.8 65.0 10895.1 10907.9 2789.4 560.1
soyoil 35.1 0.0 741.1 875.0 165.2 4.2
upland cotton 288.8 136.2 14910.9 16255.9 4930.9 3637.7
pima cotton 1.5 0.0 708.9 613.2 188.4 50.6
sorghum -50.7 0.0 1559.7 5093.3 525.0 0.0
barley 0.0 0.0 61.3 32.5 19.3 31.6
rice 61.0 4.0 3011.9 2689.3 570.9 28.4

COTTON
General Comments: Cotton was a little higher in response to the strength in the Chicago markets. Charts trends show that futures are trying to turn trends up again. Cotton planting progress has been on par with the five-year average and ideas of big crops are keeping prices weaker overall. It is hot and dry in the Southeast, but no one seems to concerned as of yet. Also pressuring the market are forecasts for big production around the world. Trends are down on the daily and weekly charts. The lack of a deal with China means less potential to sell US Cotton there. China has bought in limited amounts from the US this year as it seeks to cover a short crop of its own. However, it has bought more from India and now can look to Brazil for supplies. The breakdown in trade negotiations between the US and China means that the US will likely have sold what it will sell to China this year, and that China could even cancel some previous purchases. The stock markets have been weaker as there were some new fears about the world economic health, and that meant Cotton futures had another reason for weaker prices.
Overnight News: The Delta and Southeast should get mostly dry weather. Showers are possible starting on Sunday. Temperatures should be mostly above normal. Texas will have mostly dry weather this week and scattered showers this weekend. Temperatures will average near to above normal. The USDA average price is now 63.91 ct/lb. ICE said that certified stocks are now 84,997 bales, from 82,882 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7190 and 7560 July. Support is at 6820, 6740, and 6680 July, with resistance of 6980, 7150, and 7240 July.

FCOJ
General Comments: FCOJ was higher in range trading. Trends are sideways to up on the daily charts, but the market still looks at a big oranges crop and weak demand for FCOJ. Harvest progress should be strong as producers are getting the Valencia done to complete the harvest for the year. Fruit for the next crop is developing and are as big as golf balls. Production is very uniform so far this year and crop conditions are called good. Irrigation is being used a few times a week to help protect crop condition, but showers are seen several times a week. Mostly good conditions are reported in Brazil as the harvest their gets underway.
Overnight News: Florida should get mostly dry weather. Temperatures will average near to above normal. Brazil should get scattered showers late this week and below normal temperatures.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 108.00, 111.00, and 116.00 July. Support is at 102.00, 100.00, and 97.00 July, with resistance at 107.00, 110.00, and 113.00 July.

COFFEE
General Comments: Futures were higher again yesterday in both markets as the Brazilian Real moved higher once again. It is winter in Brazil, and some buying came from speculators reducing short position exposure in the market. It is not likely that the current weather would produce much in the way of damage, but it is time to operate with reduced risk for the shorts. Strength in the Brazilian Real caused some speculative buying as reports indicate that the Brazilian government might find a way with the congress there to reform pensions. The trade is still worried about big supplies, especially from Brazil and low demand. Brazil had dominated the market. However, buyers are now more actively pursuing other origins, especially for certified or higher end coffees. Ideas are that the next crop might still be big as the weather has been good for the trees so far. Mostly dry conditions are in the forecast for this week.
Overnight News: ICE certified stocks are lower today at 2.399 million bags. The ICO daily average price is now 101.17 ct/lb. Brazil will get mostly dry conditions, but some light showers Sunday, with near to above normal temperatures. Vietnam will see scattered showers and storms.
Chart Trends: Trends in New York are up with objectives of 105.00 July. Support is at 99.00, 97.00, and 95.00 July, and resistance is at 13.00, 106.00 and 108.00 July. Trends in London are up with no objectives. Support is at 1410, 1380, and 1360 July, and resistance is at 1460, 1490, and 1520 July.

SUGAR
General Comments: Futures were lower in range trading. Weaker petroleum markets created selling interest in Sugar on Ethanol demand concerns. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support big production ideas. Demand seems to be average and routine. The processing pace remains below the year ago pace in the latest data. 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. There are concerns that the Indian monsoon will not be strong this year and that Sugarcane production could be hurt. Very good conditions are reported in Thailand. Demand for Sugar has been average, and demand for ethanol is reported to be increasing.
Overnight News: Brazil will get mostly dry weather or light showers. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1160, 1130, and 1110 July, and resistance is at 1200, 1210, and 1230 July. Trends in London are mixed. Support is at 323.00, 319.00, and 318.00 August, and resistance is at 329.00, 331.00, and 332.00 August.

COCOA
General Comments: Futures closed a little lower once again. Trends are now sideways in New York. The mid crop harvest is active in West Africa. Ivory Coast arrivals remain strong. The weekly arrivals pace is about 15% higher than a year ago and is holding this level. Arrivals were reported strong in the rest of West Africa as well. Demand appears strong and the strong demand seems to be supporting futures. Growing conditions are generally good in West Africa. Periods of showers and moderate temperatures are being reported. 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.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near 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 4.654 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2400, 2380, and 2350 July, with resistance at 2450, 2480, and 2510 July. Trends in London are mixed to up with objectives of 1830 and 1850 July. Support is at 1760, 1740, and 1720 July, with resistance at 1800, 1810, and 1820 July.



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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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