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Softs Report 06/03/19


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COTTON
General Comments: Cotton was a little lower for the week as futures moved sharply lower on Friday. The market was hurt by the threats President Trump made to increase tariffs on Mexico due to the immigration problems along the southern border. It is another demand threat for Cotton that is already experiencing lost business potential with China and turkey and could get hurt if Vietnam is targeted for tariffs later on. The export sales report was strong in reaction to the recent lower prices in futures markets. Cotton planting progress has been on par with the five-year average and ideas of big crops are keeping prices weaker. There are some concerns that the cold May weather from Texas to the East Coast might cause lower yields this Fall. Also pressuring the market are forecasts for big production around the world. USDA sees no shortage of Cotton anywhere in the coming year. However, it could be that the Indian monsoon gets off to a slow start and production potential gets hurt there and din Pakistan. It has been dry so far and is turning hotter, but this is considered pre monsoonal weather. 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. Temperatures should be mostly above normal. Texas will have mostly dry weather. Temperatures will average near to above normal. The USDA average price is now 62.65 ct/lb. ICE said that certified stocks are now 84,139 bales, from 84,997 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7190 and 7560 July. Support is at 6740, 6680, and 6610 July, with resistance of 6980, 7150, and 7240 July.

DJ On-Call Cotton – May 31
As of May 24. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
May 19 0 0 0 0 0 0
Jul 19 11,956 12,509 -553 6,569 6,810 -241
Oct 19 0 0 0 0 0 0
Dec 19 30,647 30,942 -295 39,350 38,569 781
Mar 20 19,783 19,244 539 3,192 3,182 10
May 20 7,701 7,152 549 387 387 0
Jul 20 12,203 11,539 664 2,102 2,102 0
Dec 20 6,262 5,570 692 10,784 10,922 -138
Mar 21 2,163 1,943 220 309 309 0
May 21 641 494 147 0 0 0
Jul 21 394 247 147 0 0 0
Dec 21 331 0 331 22 22 0
Total 92,081 89,640 2,441 62,715 62,303 412
Open Change
Int
May 19 0 0 0
Jul 19 98,466 103,545 -5,079
Oct 19 49 76 -27
Dec 19 89,263 89,275 -12
Mar 20 14,595 14,150 445
May 20 1,585 1,309 276
Jul 20 3,274 2,912 362
Dec 20 7,581 6,947 634
Mar 21 111 104 7
May 21 0 0 0
Jul 21 0 0 0
Total 214,924 218,318 -3,394

COT — Supplemental Report – Option and Futures Combined Positions as of May 28, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COTTON NO. 2 – ICE FUTURES U.S.
CFTC Code #033661 Open Interest is 281,779
: Positions :
: 32,383 70,283 75,737 73,183 100,682 87,922 21,039 269,225 267,741: 12,554 14,038
: Changes from: May 21, 2019 (Change in open interest: 1,669) :
: 691 -291 2,832 -2,450 -936 1,422 1,602 2,495 3,207: -826 -1,538
: Percent of Open Interest Represented by Each Category of Trader :
: 11.5 24.9 26.9 26.0 35.7 31.2 7.5 95.5 95.0: 4.5 5.0
: Total Traders: 309 Number of Traders in Each Category :
: 81 103 98 56 60 50 28 240 241:
——————————————————————————————————————-

FCOJ
General Comments: FCOJ was higher as speculators bought in anticipation of the hurricane season. The season started on June 1, and a tropical system formed in the Gulf of Mexico and threatened to bring some significant rains to the Houston area. This is away from any big citrus production, but the storm means that the season has started right on time. Trends are sideways to up on the daily charts and sideways weekly charts as the market looks at a big oranges crop and weak demand for FCOJ. USDA production estimates are above 70 million boxes and represent a remarkable recovery from the greening disease and the small crops of just a couple of years ago. Inventories in Florida are still 17% above a year ago. That means that there should be no shortage of oranges available to the market to make FCOJ. The increase is coming from less demand and good, but weakening, imports along with the increased domestic production. 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. Crop conditions are called good. Irrigation is being used a few times a week to help protect crop condition. Mostly good conditions are reported in Brazil as the harvest there is active.
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 105.00, 102.00, and 100.00 July, with resistance at 110.00, 113.00, and 117.00 July.

DJ Florida FCOJ Movement and Pack – May 31
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 5/25/2019 Corresponding
Current Week Last
Week Season
5/25/2019 5/26/2018 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 327.65 276.73 18.4%
Retail/Institutional 6.52 7.06 -7.7%
Total 334.16 283.79 17.8%
Pack
Bulk 5.20 0.43 1108.5%
Retail/Institutional 0.80 0.97 -17.5%
Total Pack 6.00 1.40 329.8%
Reprocessed -2.26 -1.40 61.8%
Pack from Fruit 3.74 0.00 NA
Receipts & Losses
Net Gain or Loss -0.06 0.07 -13.5%
Imports – Foreign 5.21 8.48 -38.5%
Domestic Receipts 0.16 0.21 -23.8%
Receipts of Florida Product
from Non-Reporting Entit 0.00 0.00 NC
Chilled OJ used in FCOJ 0.00 0.00 NC
Reprocessed FCTJ 0.22 0.00 NA
Total Carry Over, Receipt & Pack
Bulk 336.12 284.51 18.1%
Retail/Institutional 7.31 8.02 -8.9%
Total 343.43 292.54 17.4%
MOVEMENT
Bulk
Domestic 3.72 3.42 8.6%
Exports 0.25 0.26 -3.5%
Total (Bulk) 3.97 3.68 7.7%
Retail/Institutional
Domestic 1.19 1.45 -17.8%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.19 1.45 -17.8%
Total Movement 5.16 5.13 0.5%
ENDING INVENTORY
Bulk 332.15 280.83 18.3%
Retail/Institutional 6.12 6.58 -6.9%
Ending Inventory 338.27 287.41 17.7%
Total Same
Total Season Period Last
To Date Season
25-May-19 26-May-18 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 237.21 185.02 28.2%
Retail/Institutional 5.92 7.20 -17.8%
Total 243.13 192.21 26.5%
Pack
Bulk 127.37 85.76 48.5%
Retail/Institutional 40.96 42.95 -4.6%
Total Pack 168.33 128.70 30.8%
Reprocessed -87.31 -87.61 -0.3%
Pack from Fruit 81.02 41.10 97.1%
Receipts & Losses
Net Gain or Loss -0.84 0.74 13.6%
Imports – Foreign 222.82 240.51 -7.4%
Domestic Receipts 4.81 7.87 -38.9%
Receipts of Florida Produ 0.04 0.40 -91.1%
from Non-Reporting Entit 3.28 1.00 227.8%
Chilled OJ used in FCOJ 1.73 0.47 267.7%
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 509.10 434.16 17.3%
Retail/Institutional 46.88 50.14 -6.5%
Total 555.98 484.31 14.8%
MOVEMENT
Bulk 162.40 142.52 14.0%
Domestic 14.55 10.81 34.5%
Exports 176.95 153.33 15.4%
Total (Bulk)
Retail/Institutional
Domestic 40.76 43.57 -6.5%
Exports 0.00 0.00 NC
Total (Retail/Inst) 40.76 43.57 -6.5%
Total Movement 217.70 196.90 10.6%
ENDING INVENTORY
Bulk 332.15 280.83 18.3%
Retail/Institutional 6.12 6.58 -6.9%
Ending Inventory 338.27 287.41 17.7%

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of May 28, 2019
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
FRZN CONCENTRATED ORANGE JUICE – ICE FUTURES U.S. (CONTRACTS OF 15,000 POUNDS) :
CFTC Code #040701 Open Interest is 25,519 :
: Positions :
: 13,726 10,325 1,825 0 141 449 7,627 452 1,348 1,033 3,764 :
: Changes from: May 21, 2019 :
: -21 277 35 0 8 29 -224 44 -96 -51 372 :
: Percent of Open Interest Represented by Each Category of Trader :
: 53.8 40.5 7.2 0.0 0.6 1.8 29.9 1.8 5.3 4.0 14.7 :
: Number of Traders in Each Category Total Traders: 87 :
: 25 13 7 0 . 4 22 4 18 7 12 :
—————————————————————————————————————-

COFFEE
General Comments: Futures were higher for the week in both markets as the Real worked higher. There are reports that the government and congress in Brazil are finally working together to solve the public pension crisis. Resolution to this problem was a major plank in the election of the new government earlier in the year. The Brazil harvest is moving along at a slow pace. Reports indicate that the yields are not real strong and that the quality of the crop is poor due to extreme weather seen early in the growing season. Forecasts for cold air were made for southern Coffee areas of Brazil, but the temperature outlook was not cold enough to cause any concerns about damage to Coffee. It is at least a reminder of what time of year it is in Brazil and the potential for damage due to cold and freezing temperatures. Buyers are now more actively pursuing other origins, especially for certified or higher end coffees. Roasters were scale down buyers on the extended down move and now have more than ample supplies in-house or on the way. Prices are generally below to well below the cost of production for world producers, and prices are getting to that point for producers in Brazil and Vietnam. The inventory data from ICO and others shows ample supplies in the world market. 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. The charts show that both markets could trade in a sideways to up pattern for now as the market looks at weather and production potential of the next crop.
Overnight News: ICE certified stocks are lower today at 2.393 million bags. The ICO daily average price is now 103.25 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 101.00, 99.00, and 97.00 July, and resistance is at 106.00, 108.00 and 110.00 July. Trends in London are up with no objectives. Support is at 1440, 1410, and 1380 July, and resistance is at 1490, 1520, and 1540 July.

COT — Supplemental Report – Option and Futures Combined Positions as of May 28, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COFFEE C – ICE FUTURES U.S.
CFTC Code #083731 Open Interest is 416,512
: Positions :
: 45,289 107,730 117,142 157,153 147,496 73,673 34,067 393,258 406,436: 23,254 10,076
: Changes from: May 21, 2019 (Change in open interest: 9,411) :
: -188 -8,195 5,209 2,584 11,608 3,125 1,956 10,731 10,578: -1,319 -1,166
: Percent of Open Interest Represented by Each Category of Trader :
: 10.9 25.9 28.1 37.7 35.4 17.7 8.2 94.4 97.6: 5.6 2.4
: Total Traders: 518 Number of Traders in Each Category :
: 161 145 148 136 117 47 28 432 361:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 05/28/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Robusta Coffee Futures and Options – ICE Futures Europe
167,168 98,173 71,916 19,347 12,683 2,219
Percent of Open Interest Represented by Each Category of Trader
100.0% 58.7% 43.0% 11.6% 7.6% 1.3%
Number of Traders in Each Category
163 57 46 17 7 11
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
==============================================================================
6,164 41,057 13,685 2,876 974 19,008
Percent of Open Interest Represented by Each Category of Trader
3.7% 24.6% 8.2% 1.7% 0.6% 11.4%
Number of Traders in Each Category
15 33 15 10 11 18
Nonreportable Positions
=======================
Long Short
=======================
5,697 5,625
Percent of Open Interest Represented by Each Category of Trader
3.4% 3.4%

SUGAR
General Comments: Futures closed near the highs of the week as the Real turned stronger. The move higher in the Real increased world prices, as did news that Brazilian processors prefer to make Ethanol for the domestic market rather than Sugar for the export market. Processing of Sugarcane in Brazil has been off to a slow start. The trade thinks that there is plenty of Sugar available to meet any demand, but the low totals demonstrated by UNICA so far have created some doubts. Chart patterns on the weekly charts are sideways to down in New York and sideways in London. 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. There are concerns that the Indian monsoon will not be strong this year and that Sugarcane production could be hurt. It is hot and dry there so far, but there are signs that the monsoon is ready to develop. The government weather services there is looking for a normal monsoon, but many private forecasters expect less rain and warmer temperatures than normal. 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 1180, 1160, and 1130 July, and resistance is at 1230, 1240, and 1250 July. Trends in London are mixed. Support is at 325.00, 323.00, and 319.00 August, and resistance is at 331.00, 332.00, and 334.00 August.

COT — Supplemental Report – Option and Futures Combined Positions as of May 28, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SUGAR NO. 11 – ICE FUTURES U.S.
CFTC Code #080732 Open Interest is 1,184,772
: Positions :
: 102,752 298,213 255,964 441,991 462,172 287,868 83,725 1,088,575 1,100,074: 96,197 84,698
: Changes from: May 21, 2019 (Change in open interest: 17,632) :
: 4,931 8,636 3,546 4,115 2,456 -1,325 3,104 11,267 17,742: 6,365 -110
: Percent of Open Interest Represented by Each Category of Trader :
: 8.7 25.2 21.6 37.3 39.0 24.3 7.1 91.9 92.9: 8.1 7.1
: Total Traders: 267 Number of Traders in Each Category :
: 56 74 92 86 74 32 20 230 215:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 05/28/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE White Sugar Futures and Options- ICE Futures Europe
110,517 53,485 51,567 17,676 2,523 1,172
Percent of Open Interest Represented by Each Category of Trader
100.0% 48.4% 46.7% 16.0% 2.3% 1.1%
Number of Traders in Each Category
144 53 45 15 4 8
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
16,407 37,987 9,028 3,833 258 3,758
Percent of Open Interest Represented by Each Category of Trader
14.8% 34.4% 8.2% 3.5% 0.2% 3.4%
Number of Traders in Each Category
19 27 13 9 5 15
Nonreportable Positions
=======================
Long Short
=======================
5,159 4,225
Percent of Open Interest Represented by Each Category of Trader
4.7% 3.8%

COCOA
General Comments: Futures held strong for much of the week, but closed on a weaker not on Friday. The ICCO released its latest estimates on Friday and called for a slight increase in world production. It cited strong production in West Africa that would more than offset reduced production from Asia and Latin America. The mid crop harvest is active in West Africa and reports are generally positive, although some Nigerian producers have complained that the weather is not giving them the best conditions for top yields. Ivory Coast arrivals are strong as are exports. 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 market saw stronger than expected grind data when the quarterly grind is released in the EU, North America, and Asia in the last month. Growing conditions are generally good in West Africa. Periods of 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.
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 1810, 1820, and 1860 July.

COT — Supplemental Report – Option and Futures Combined Positions as of May 28, 2019
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COCOA – ICE FUTURES U.S.
CFTC Code #073732 Open Interest is 305,364
: Positions :
: 38,038 40,622 68,664 121,618 162,211 60,299 22,469 288,618 293,966: 16,746 11,398
: Changes from: May 21, 2019 (Change in open interest: 14,901) :
: 6,739 -797 5,167 -2,335 10,769 2,570 390 12,141 15,530: 2,760 -629
: Percent of Open Interest Represented by Each Category of Trader :
: 12.5 13.3 22.5 39.8 53.1 19.7 7.4 94.5 96.3: 5.5 3.7
: Total Traders: 229 Number of Traders in Each Category :
: 69 67 83 41 38 37 15 202 156:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 05/28/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Cocoa Futures and Options – ICE Futures Europe
330,997 177,414 221,318 30,589 30,918 23,905
Percent of Open Interest Represented by Each Category of Trader
100.0% 53.6% 66.9% 9.2% 9.3% 7.2%
Number of Traders in Each Category
144 47 40 16 8 12
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
42,912 6,866 20,249 5,160 124 24,867
Percent of Open Interest Represented by Each Category of Trader
13.0% 2.1% 6.1% 1.6% 0.0% 7.5%
Number of Traders in Each Category
31 10 15 14 8 20
Nonreportable Positions
=======================
Long Short
=======================
5,901 2,750
Percent of Open Interest Represented by Each Category of Trader
1.8% 0.8%



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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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