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Softs Report 06/17/19


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COTTON
General Comments: Cotton was a little higher for the week as traders become more concerned about planting progress and crop development of this crop. Trends have turned down on the daily and weekly charts with the price action of the last couple of weeks. The weather has been bad, especially in the Texas Panhandle, where there are concerns that it has been too wet and cool for the crop to be developed well. The Delta has also been wet and it has been dry in the Southeast except for the big rains of a week ago. Cotton planting fell behind the five-year average last week and this trend is expected to continue this week and overall development is expected to stay behind the average. Crop condition ratings should also be less due to the weather. Demand is a problem for traders due mostly to moves made in Washington. Cotton is already experiencing lost business potential with China and Turkey and could get hurt if Vietnam is targeted for tariffs later on. 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 in Pakistan. It has been dry so far and is turning hotter, but this is considered pre monsoonal weather. Below normal rains are now in the forecast for June and longer range forecasts call for a drier September as well as the monsoon should be generally weaker than normal.
Overnight News: The Delta and Southeast should get showers and storms this week. Temperatures should be mostly near to below normal. Texas will have mostly dry weather this week and showers and storms again this weekend. Temperatures will average near to below normal. The USDA average price is now 60.87 ct/lb. ICE said that certified stocks are now 93,721 bales, from 89,643 bales yesterday.
Chart Trends: Trends in Cotton are mixed to down with objectives of 6240 July. Support is at 6550, 6520, and 6490 July, with resistance of 6700, 6750, and 6850 July.

COT — Supplemental Report – Option and Futures Combined Positions as of June 11, 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 275,966
: Positions :
: 32,209 71,235 67,736 75,548 105,421 85,697 15,317 261,190 259,709: 14,776 16,256
: Changes from: June 4, 2019 (Change in open interest: -1,371) :
: 54 5,752 -6,891 6,709 5,517 -1,483 -6,018 -1,610 -1,640: 239 269
: Percent of Open Interest Represented by Each Category of Trader :
: 11.7 25.8 24.5 27.4 38.2 31.1 5.6 94.6 94.1: 5.4 5.9
: Total Traders: 307 Number of Traders in Each Category :
: 74 104 88 60 63 48 23 235 234:
——————————————————————————————————————-

FCOJ
General Comments: FCOJ was a little lower again last week as the weather in Florida remained tranquil. Speculators have been buying in anticipation of the hurricane season, but there are no storms on the horizon this early in the season. The season started on June 1. Trends are sideways to down on the daily charts and sideways weekly charts as the market looks at a big orange 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 along with the increased domestic production. 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 scattered showers and storms through the week. 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 down with objectives of 88.00, 85.00, and 81.00 July. Support is at 100.00, 97.00, and 95.00 July, with resistance at 106.00, 108.00, and 113.00 July.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of June 11, 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 25,586 :
: Positions :
: 13,810 10,621 1,638 0 143 557 7,102 423 1,222 943 4,499 :
: Changes from: June 4, 2019 :
: 202 -18 -140 0 2 116 -290 -23 -81 -58 392 :
: Percent of Open Interest Represented by Each Category of Trader :
: 54.0 41.5 6.4 0.0 0.6 2.2 27.8 1.7 4.8 3.7 17.6 :
: Number of Traders in Each Category Total Traders: 86 :
: 26 16 7 0 . 4 22 4 19 4 13 :
—————————————————————————————————————-

COFFEE
General Comments: Futures were lower for the week despite a firm Real. A strong export pace from Brazil remains a problem for the bulls. Brazil exported over 3.0 million bags of Coffee again last month. 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. Vietnam is also reporting lower yields for the current crop as the weather was not good for flowering earlier in the year. There have been some hot and dry spells that have hurt yield and quality for these crops as well. 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. 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 slightly lower today at 2.383 million bags. The ICO daily average price is now 96.55 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Vietnam will see scattered showers and storms.
Chart Trends: Trends in New York are mixed to down with objectives of 88.00, 85.00, and 81.00 July. Support is at 95.00, 90.00, and 88.00 July, and resistance is at 100.00, 103.00 and 106.00 July. Trends in London are mixed to down with objectives of 1340 and 1240 July. Support is at 1360, 1330, and 1290 July, and resistance is at 1420, 1440, and 1460 July.

COT — Supplemental Report – Option and Futures Combined Positions as of June 11, 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 367,686
: Positions :
: 34,620 73,984 93,301 145,048 158,600 69,493 28,757 342,462 354,641: 25,224 13,045
: Changes from: June 4, 2019 (Change in open interest: -33,973) :
: -8,495 -10,243 -19,512 -4,675 -621 -5,092 -3,815 -37,773 -34,190: 3,800 218
: Percent of Open Interest Represented by Each Category of Trader :
: 9.4 20.1 25.4 39.4 43.1 18.9 7.8 93.1 96.5: 6.9 3.5
: Total Traders: 483 Number of Traders in Each Category :
: 147 122 150 136 117 46 28 407 356:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Robusta Coffee Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 06/11/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Robusta Coffee Futures and Options – ICE Futures Europe
144,633 80,374 65,086 16,385 11,389 2,468
Percent of Open Interest Represented by Each Category of Trader
100.0% 55.6% 45.0% 11.3% 7.9% 1.7%
Number of Traders in Each Category
148 50 47 18 6 11
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
5,273 29,535 10,478 1,532 887 20,489
Percent of Open Interest Represented by Each Category of Trader
3.6% 20.4% 7.2% 1.1% 0.6% 14.2%
Number of Traders in Each Category
13 28 15 7 11 20
Nonreportable Positions
=======================
Long Short
=======================
7,633 4,302
Percent of Open Interest Represented by Each Category of Trader
5.3% 3.0%

SUGAR
General Comments Futures closed higher as the Real remained stronger. The move higher in the Real increased world prices, as did more reports 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 and there are some ideas that Sugarcane production was not all that strong this year due to uneven weather. Processing is faster now with the harvest in full swing. Chart patterns on the weekly charts are sideways in both markets. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support some of the 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. Even so, there are now a lot of private forecasts that June rains in both India and Pakistan will be below average. 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 up with no objectives. Support is at 1260, 1250, and 1240 October, and resistance is at 1310, 1350, and 1370 October. Trends in London are mixed. Support is at 339.00, 336.00, and 333.00 October, and resistance is at 345.00, 347.00, and 349.00 October.

COT — Supplemental Report – Option and Futures Combined Positions as of June 11, 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 1,146,015
: Positions :
: 104,414 247,634 208,612 466,458 544,126 283,020 77,794 1,062,504 1,078,166: 83,511 67,849
: Changes from: June 4, 2019 (Change in open interest: -30,131) :
: -3,335 -37,857 -21,406 6,115 40,767 -4,675 -7,986 -23,301 -26,482: -6,830 -3,650
: Percent of Open Interest Represented by Each Category of Trader :
: 9.1 21.6 18.2 40.7 47.5 24.7 6.8 92.7 94.1: 7.3 5.9
: Total Traders: 262 Number of Traders in Each Category :
: 56 70 87 85 79 32 21 226 212:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe White Sugar Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 06/11/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE White Sugar Futures and Options- ICE Futures Europe
113,843 59,573 59,171 15,437 2,017 1,351
Percent of Open Interest Represented by Each Category of Trader
100.0% 52.3% 52.0% 13.6% 1.8% 1.2%
Number of Traders in Each Category
143 52 48 13 4 6
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
16,786 33,841 9,351 3,013 336 3,660
Percent of Open Interest Represented by Each Category of Trader
14.7% 29.7% 8.2% 2.6% 0.3% 3.2%
Number of Traders in Each Category
19 26 12 7 5 14
Nonreportable Positions
=======================
Long Short
=======================
4,672 4,115
Percent of Open Interest Represented by Each Category of Trader
4.1% 3.6%

COCOA
General Comments: Futures closed a little lower on some speculative long liquidation. Ghana Cocoa authorities noted disease problems in its crop and said that mid crop production could be hurt. The disease could hurt the mid crop and probably will affect the next main crop that will be harvested at the end of the year. They say that about 50,000 tons were lost in the midcrop. The mid crop harvest is winding down 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. 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 4.606 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2470, 2440, and 2410 September, with resistance at 2550, 2580, and 2600 September. Trends in London are mixed. Support is at 1830, 1810, and 1790 September, with resistance at 1860, 1870, and 1910 September.

COT — Supplemental Report – Option and Futures Combined Positions as of June 11, 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 291,313
: Positions :
: 45,790 35,928 61,811 104,608 159,436 59,826 19,966 272,035 277,140: 19,277 14,172
: Changes from: June 4, 2019 (Change in open interest: -11,461) :
: 7,919 -3,879 -3,040 -21,181 -4,595 2,124 -935 -14,177 -12,449: 2,716 988
: Percent of Open Interest Represented by Each Category of Trader :
: 15.7 12.3 21.2 35.9 54.7 20.5 6.9 93.4 95.1: 6.6 4.9
: Total Traders: 224 Number of Traders in Each Category :
: 73 60 74 38 38 37 17 197 147:
——————————————————————————————————————-

DJ ICE Commitments: ICE Europe Cocoa Futures/Options
Commitments of Traders-Options and Futures
Combined Positions as of 06/11/2019
Reportable Positions
===============================================================================
Producer/Merchant/
Processor/User Swap Dealers
OI Long Short Long Short Spreading
===============================================================================
ICE Cocoa Futures and Options – ICE Futures Europe
349,273 182,517 229,543 25,744 32,616 29,296
Percent of Open Interest Represented by Each Category of Trader
100.0% 52.3% 65.7% 7.4% 9.3% 8.4%
Number of Traders in Each Category
144 49 41 13 10 11
Reportable Positions
===============================================================================
Managed Money Other Reportables
Long Short Spreading Long Short Spreading
===============================================================================
49,830 3,548 24,094 4,536 252 27,815
Percent of Open Interest Represented by Each Category of Trader
14.3% 1.0% 6.9% 1.3% 0.1% 8.0%
Number of Traders in Each Category
35 7 14 10 11 21
Nonreportable Positions
=======================
Long Short
=======================
5,441 2,108
Percent of Open Interest Represented by Each Category of Trader
1.6% 0.6%



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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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