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Softs Report 07/16/19

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General Comments Cotton was higher in response to the potential for crop losses due to the tropical system in the Delta states. Trends remain down on the daily and weekly charts. 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. That should be changing now as it has been warmer and drier in the last couple of weeks. The Delta has also been wet and some rains have been seen in the Southeast over the last few weeks. The topical system now moving through the Delta could bring some very damaging precipitation. 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, the Indian monsoon is off to a slow start and production potential could be hurt there and in Pakistan. Monsoon rains have started to move into central and northern parts of the country but these rains are arriving a couple of weeks late. It is reported to be too hot and dry in many growing areas in the Gujarat and also into Pakistan and other parts of India.
Overnight News: The Delta and Southeast could see some showers and storms early this week from the tropical storm, than lighter precipitation through the end of the week. Temperatures should be mostly near to above normal. Texas will have mostly dry weather. Temperatures will be above normal. The USDA average price is now 57.99 ct/lb. ICE said that certified stocks are now 60,410 bales, from 63,125 bales yesterday. ICE said that 0 notices were posted for delivery against July contracts and that total deliveries are now 246 contracts.
Chart Trends: Trends in Cotton are mixed to down with objectives of 6170 and 5780 December. Support is at 6260, 6200, and 6140 December, with resistance of 6410, 6470, and 6530 December.

Crop Progress
Date 7-Jul 30-Jun 2018 Avg
Cotton Squaring 60 47 70 69
Cotton Setting Bolls 20 13 30 25
Crop Condition
Very Poor Fair Good Excellent
Cotton This Week 3 12 29 47 9
Cotton Last Week 2 17 27 47 7
Cotton Last Year 10 18 31 34 7

General Comments: FCOJ was lower as the weather in Florida remained tranquil. There are no tropical systems likely to hit the state this week. Futures appear poised to move back to or below 90.00 seen earlier in the year. Speculators have been buying in anticipation of the hurricane season, but there are no storms on the horizon this early in the season. They are selling some of these positions now and producers have also been looking to sell as the orange crop in Florida looks to be big. The hurricane season started on June 1, but so far the state has seen only an increase in showers and storms that have been beneficial for crops. Trends are sideways to down on the daily charts and weekly charts as the market looks at a big orange crop and weak demand for FCOJ. Fruit for the next crop is developing and are as big as golf balls. Crop conditions are called good.
Overnight News: Florida should get scattered and light showers through the weekend. Temperatures will average near to above normal. Brazil should get scattered showers today, then drier weather and near normal temperatures. ICE said that 0 notices were posted for delivery against July contracts and that total deliveries for the month are 0 contracts
Chart Trends: Trends in FCOJ are mixed. Support is at 99.00, 95.00, and 92.00 September, with resistance at 104.00, 106.00, and 107.00 September.

General Comments: Futures closed sharply higher in New York and higher in London on ideas of reduced availability of the crop. The cold weather has impacted crops in Brazil and some parts of northern South America and Central America have been too dry. Many farmers in Central America are having trouble getting financing for crops due to low prices, anyway. In Brazil, the Real has been stronger due to reforms to public pensions in the country. Brazil continues to keep a strong export pace and shipped about 2.8 million bags in June. The Brazil harvest is moving along at a slow pace and producers are trying to store the crop due to the current low prices. 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. Reports from the recent freeze suggest little additional damage to crops, but some leaves were burned and some trees will be in shock for a while. 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, but showers are reported in the Central Highlands now and ideas are that conditions and production potential have improved.
Overnight News: ICE certified stocks are slightly lower today at 2.367 million bags. GCA stocks are now 6.820 million bags, from 6.609 million in May. The ICO daily average price is now 105.53 ct/lb. Brazil will get mostly dry conditions with near to above temperatures. Vietnam will see scattered showers and storms. ICE New York said that 0 notices were posted against July contracts and that total deliveries for the month are 610 contracts.
Chart Trends: Trends in New York are down with objectives of 112.00, 116.00, and 122.00 September. Support is at 107.00, 105.00, and 102.00 September, and resistance is at 110.00, 115.00 and 118.00 September. Trends in London are mixed. Support is at 1400, 1380, and 1360 September, and resistance is at 1460, 1490, and 1510 September.

General Comments: Futures closed lower, with London the leader on the way down. Trends in both markets turned down on the daily charts with the price action yesterday. Reports from India indicate that the country still has a large surplus of White Sugar that probably must be exported. India has always been willing to dump agricultural goods such as Rice and Sugar at below cost prices, so the market began to anticipate improved sales from mills and exporters there. The country said it will look at its subsidy program and probably make changes after other producing countries took India to the WTO. It will keep subsidizing Sugar and the industry. 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 has started to develop as rains have now been at or above normal for a couple of weeks in Sugar areas. Processing of Sugarcane in Brazil is faster now after a very slow start as the is now harvest in full swing. Mills are refining mostly for ethanol right now. The fundamentals still suggest big supplies, and the weather in Brazil and India has improved to support some of the big production ideas. Demand seems to be average and routine. 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 below normal today and near to above normal starting tomorrow.
Chart Trends: Trends in New York are down with objectives of 1190 and 1150 October. Support is at 1180, 1150, and 1120 October, and resistance is at 1230, 1240, and 1260 October. Trends in London are down with objectives of 315.00 October. Support is at 314.00, 311.00, and 308.00 October, and resistance is at 323.00, 325.00, and 328.00 October.

General Comments: Futures closed sharply lower on what appeared to be fund selling. The trends turned down on the daily charts yesterday. The selling came in part on ideas of less demand from grinders. The quarterly grind data will start to be released today from Europe, then later in the week from North America and Asia. The uneven weather in West Africa is still a feature. The weather in Ivory Coast and the other countries in West Africa has been dryer than normal for the last couple of weeks and there is some talk that production of the next main crop could be hurt. Some showers are returning to West Africa now to help relieve stress on trees. Ivory Coast arrivals re now 2.115 million tons., from 1.904 million tons last year. Ivory Coast arrivals were 2.061 million tons through the end of June, from 1.869 million last year. Ghana said that producers could get 70% of the minimum in the new pricing program it is putting together with Ivory Coast.
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 4.351 million bags. ICE said that 0 contracts were delivered against July futures today and that total deliveries for the month are 755 contracts.
Chart Trends: Trends in New York are down with objectives of 2370 September. Support is at 2410, 2380, and 2350 September, with resistance at 2480, 2520, and 2550 September. Trends in London are mixed to down with objectives of 1790 September. Support is at 1810, 1790, and 1760 September, with resistance at 1850, 1890, and 1900 September.

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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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