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Softs Report 04/02/2020


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DJ U.S. February Coffee, Cocoa Imports-Apr 2
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones.
—-Feb 2020—- —-Jan 2020—-
-coffee- kilograms pounds kilograms pounds
coffee, unroasted 97,867,360 215,797,529 118,624,416 261,566,837
coffee, roasted 6,967,293 15,362,881 7,644,220 16,855,505
coffee, soluble
instant 3,612,693 7,965,988 4,140,300 9,129,362
-Cocoa-
cocoa beans 67,845,850 149,600,099 41,093,205 90,610,517
sweetened bars/block
10 lbs or over 1,805,189 3,980,442 2,911,523 6,419,908
for retail candy 0 0 0 0
cocoa butter 8,510,884 18,766,499 9,237,092 20,367,788
cocoa paste,
not defatted 3,543,885 7,814,266 5,577,068 12,297,435
cocoa paste
defatted 2,891,847 6,376,523 4,503,733 9,930,731
cocoa powder,
unsweetened 5,504,687 12,137,835 7,060,586 15,568,592
cocoa powder,
sweetened 68,554 151,162 92,459 203,872
confectioners
coating 3,579,996 7,893,891 4,638,117 10,227,048
candy containing
chocolate 8,906,582 19,639,013 8,815,148 19,437,401

COTTON
General Comments Cotton was lower. USDA estimated Cotton planted area at 13.7 million acres, about unchanged from last year. Many doubt that much Cotton will get planted now because of price, but the headline number was big and had to be respected. Much of the selling was related to lost demand potential due to the Coronavirus and the extremely weak petroleum prices. The Coronavirus has closed malls across America and stores are not selling clothes. Clothes for the US market made in Asia are not being ordered. Chinese buyers might need less Cotton now as factories inside their country were closed for an extended holiday. All are reopen now, but the manufacturing pace has been slow. China has also been slow to buy products from Southeast Asia and demand for US Cotton has been hurt in the entire region. The weakness in Petroleum futures comes from the moves by Saudi Arabia to ramp up production just at the time when the world economy is slowing down. The threat of a world-wide recession is very real.
Overnight News: The Delta and Southeast should see scattered showers on Friday. Temperatures should be variable. Texas will have mostly dry conditions this week and a few showers over the weekend. Temperatures will average mostly above normal. The USDA average price is now 43.23 ct/lb. ICE said that certified stocks are now 28,446 bales, from 28,446 bales yesterday. USDA said that net Upland Cotton export sales were 147,500 bales this year and 111,400 bales next year. Net Pima sales were 200 bales this year and bales next year.
Chart Trends: Trends in Cotton are down with objectives of 4750 and 4380 May. Support is at 4840, 4780, and 4720 May, with resistance of 4950, 5170 and 5250 May.

DJ U.S. February Cotton Exports-Apr 2
In kilograms and in running 480-pound bales. Source. U.S. Department
Commerce.
(*)NOTE: Year ago figures reflect data reported at that time.
Data includes Exports and Re-Exports.
——- In Kilograms ——-
Feb 20 Jan 20 Dec 19 Feb 19(*)
Upland, under 1 inch 19,598,835 13,031,129 10,646,492 18,247,137
1 to 1 1/8 inch 155,619,386 160,698,460 113,517,286 94,958,960
upland 1 1/8 and over 240,927,354 190,159,094 155,753,550 199,117,394
Amer Pima, over 1 1/8 inc 112,520,410 6,034,700 7,478,294 10,838,794
All cotton 528,665,985 369,923,383 287,395,622 323,162,285
——- In Running 480-Pound Bales ——-
Feb 20 Jan 20 Dec 19 Feb 19(*)
Upland, under 1 inch 90,017 59,851 48,899 83,808
1 to 1 1/8 inch 714,754 738,082 521,381 436,143
upland 1 1/8 and over 1,106,570 873,394 715,370 914,539
Amer Pima, over 1 1/8 inc 516,802 27,717 34,348 49,782
All cotton 2,428,143 1,699,044 1,319,997 1,484,272

FCOJ
General Comments: FCOJ was a little lower, but traded in the recent range on demand considerations here in the US. Industry sources suggest that demand has improved as consumers are returning to FCOJ due to the Coronavirus. Many have been stockpiling juice. Grocery stores in many areas have sold out and need to restock. The increased demand has really turned the market around. The early and mid crop harvest is about over and the Valencia harvest is increasing. Good growing conditions and increased oranges production estimates by USDA this season have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no severe storms so far this year. Many areas have been dry lately and irrigation is being used. Reports indicate that new crop fruit is progressing well.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get isolated showers and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to up with no objectives. Support is at 117.00, 115.00, and 113.00 May, with resistance at 120.00, 122.00, and 124.00 May.

COFFEE
General Comments: Futures were lower in London as the industry here continues to take Coffee from certified stocks and avoids paying the premiums demanded in Latin America. Demand in consumer countries has increased due to stockpiling by consumers because of the Coronavirus. Containers are bottled up in China and are increasingly hard to find for shipping in most Coffee exporter countries. The chart trends are down in New York and in London due to big production ideas. Showers were reported in Brazil Coffee areas over the weekend and showers are continuing through this week. It is dry in other parts of Latin America. Central America has had less than normal rains, especially in Honduras. The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low.
Overnight News: ICE certified stocks are lower today at 1.947 million bags. The ICO daily average price is now 108.83 ct/lb. Brazil will get isolated showers with near normal temperatures. Vietnam will see mostly dry conditions in the south and some light to moderate showers in the north.
Chart Trends: Trends in New York are down with objectives of 108.00 May. Support is at 112.00, 110.00, and 107.00 May, and resistance is at 121.00, 124.00 and 131.00 May. Trends in London are down with no objectives. Support is at 1160, 1150, and 1130 May, and resistance is at 1220, 1250, and 1270 May.

SUGAR
General Comments: New York and London both closed lower. The next harvest is about to start in Brazil, and major processors and sellers of ethanol announced force majeure in Brazil earlier this week due to the lack of driving caused by the Coronavirus there. The recently weaker petroleum futures make higher priced ethanol that much more expensive to blend and cuts demand. That makes more Sugarcane available for processing into Sugar. The Brazil mills are trying to cover the lack of White Sugar in the market and the price action suggests that they are succeeding. Reports indicate that little is on offer from India. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season.
Overnight News: Brazil will get isolated showers. Temperatures should average near normal.
Chart Trends: Trends in New York are down with objectives of 990 May. Support is at 970, 940, and 910 May, and resistance is at 1050, 1080, and 1130 May. Trends in London are mixed. Support is at 349.00, 344.00, and 332.00 May, and resistance is at 361.00, 364.00, and 369.00 May.

COCOA
General Comments: New York and London closed lower. London has been the weaker market as the British Pound has been relatively strong against the US Dollar and the Euro. Harvest is now over for the main crop in West Africa and the results so far are very good. Ideas are that demand is less than before due to the Coronavirus problems in Europe. The reports from West Africa imply that a big harvest in the region. The weather in Ivory Coast is good. The weather is too dry in Ghana and Nigeria and there are fears that the mid crop is not developing well at this time.
Overnight News: Isolated to scattered showers are forecast for West Africa. Temperatures will be 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 higher today at 3.976 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2190, 2160, and 2130 May, with resistance at 2310, 2360, and 2400 May. Trends in London are mixed. Support is at 1740, 1710, and 1680 May, with resistance at 1780, 1800, and 1840 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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