Softs Report 11/21/18

COTTON
General Comments Cotton was lower again yesterday on the stronger US Dollar and weaker stock market action. Speculators were the best sellers as farmers continued to work on harvesting. Reports indicate good harvest conditions in most areas. However, the progress has been slow, especially in Texas. Cash market conditions remain weak, and ICE certified stocks have been increasing in the last couple of weeks at a rapid rate. USDA showed that the harvest is still moving much slower than average. The market needs new demand. Export sales for the last few weeks have been poor and show no real signs of improvement for now. Export demand needs to improve soon for prices to rally significantly this year, but any increase in demand has to come with no purchases from China for a while. India is getting all of the Chinese Business and prices there are much stronger. The daily charts imply that lower prices are coming to New York in the short-term
Overnight News: The Delta should get mostly dry weather and variable temperatures. Some rain is possible on Friday. The Southeast will get dry weather until rain appears this weekend. Temperatures should be variable. Texas will have mostly dry weather. Temperatures will be above normal through Saturday, then near to below normal. The USDA average price is now 72.72 ct/lb. ICE said that certified stocks are now 131,835 bales, from 123,630 bales yesterday.
Chart Trends: Trends in Cotton are mixed to down with objectives of 7620 and 7450 March. Support is at 7740, 7660, and 7600 March, with resistance of 7800, 7930, and 8020 March.

FCOJ
General Comments: FCOJ was lower yesterday as the weather remains non threatening. More speculative buying and short covering is expected as shorts cover positions or get long for the coming freeze season. It is still possible that a short-term low has been made. The Oranges harvest is active in Florida under good weather conditions. The fruit is abundant, but small. Chart trends are down. Overall growing conditions in Florida are good to very good, and there is no storm development in the Atlantic at this time. Florida producers are seeing small-sized to good-sized fruit, and work in groves maintenance is active. Irrigation is being used in all areas. Packing houses are open to process fruit for the fresh market, and a couple of major processors are open in the state to take packing house eliminations.
Overnight News: Florida should get mostly dry conditions or light showers. Temperatures will average near to above normal. Brazil should get scattered showers and near to above normal temperatures. ICE said that 413 contracts were delivered against November futures and that total deliveries for the month are now 765 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 140.00 and 146.00 January. Support is at 137.00, 135.00, and 134.00 January, with resistance at 141.00, 143.00, and 145.00 January.

DJ Florida FCOJ Movement and Pack – Nov 20
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 11/10/2018
Corresponding
Current Week Last
Week Season
11/10/2018 11/11/2017 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 216.96 175.87 23.4%
Retail/Institutional 5.68 7.35 -22.7%
Total 222.64 183.21 21.5%
Pack
Bulk 0.80 1.49 -46.4%
Retail/Institutional 1.54 1.09 41.6%
Total Pack 2.35 2.58 -9.2%
Reprocessed -2.24 -1.77 26.6%
Pack from Fruit 0.11 0.81 -87.0%
Receipts & Losses
Net Gain or Loss 0.03 0.04 -35.2%
Imports – Foreign 2.43 1.27 90.9%
Domestic Receipts – 0.57 -100.0%
Receipts of Florida Product
from Non-Reporting Entit – – NC
Chilled OJ used in FCOJ 0.00 – NA
Reprocessed FCTJ 0.02 – NA
Total Carry Over, Receipt & Pack
Bulk 218.01 177.47 22.8%
Retail/Institutional 7.22 8.44 -14.4%
Total 225.23 185.91 21.1%
MOVEMENT
Bulk
Domestic 4.97 5.72 -13.2%
Exports 1.05 0.20 435.4%
Total (Bulk) 6.01 5.92 1.6%
Retail/Institutional
Domestic 1.22 1.20 1.4%
Exports – – NC
Total (Retail/Inst) 1.22 1.20 1.4%
Total Movement 7.23 7.12 1.6%
ENDING INVENTORY
Bulk 211.99 171.55 23.6%
Retail/Institutional 6.01 7.24 -17.0%
Ending Inventory 218.00 178.79 21.9%
Total Same
Total Season Period Last
To Date Season
10-Nov-18 11-Nov-17 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 237.81 185.02 28.5%
Retail/Institutional 5.92 7.20 -17.8%
Total 243.72 192.21 26.8%
Pack
Bulk 4.49 5.07 -11.4%
Retail/Institutional 7.02 8.32 -15.7%
Total Pack 11.51 13.39 -14.1%
Reprocessed -11.18 -12.42 -10.0%
Pack from Fruit 0.33 0.97 -65.8%
Receipts & Losses
Net Gain or Loss 0.05 0.15 -69.1%
Imports – Foreign 11.52 20.46 -43.7%
Domestic Receipts 0.02 0.82 -97.9%
Receipts of Florida Produ – 0.03 -100.0%
from Non-Reporting Entit 0.24 0.13 78.7%
Chilled OJ used in FCOJ 0.09 – NA
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 243.04 199.25 22.0%
Retail/Institutional 12.93 15.52 -16.6%
Total 255.97 214.77 19.2%
MOVEMENT
Bulk 29.21 26.56 10.0%
Domestic 1.84 1.14 60.8%
Exports 31.05 27.70 12.1%
Total (Bulk)
Retail/Institutional
Domestic 6.93 8.28 -16.3%
Exports – – NC
Total (Retail/Inst) 6.93 8.28 -16.3%
Total Movement 37.97 35.98 5.5%
ENDING INVENTORY
Bulk 211.99 171.55 23.6%
Retail/Institutional 6.01 7.24 -17.0%
Ending Inventory 218.00 178.79 21.9%

COFFEE
General Comments: Futures were lower in both markets. Currency relationships, and especially the rate between the US Dollar and the Brazilian Real, continue to be a driving force in Coffee trading, and the Dollar was very strong yesterday. Other financial markets in the US were weak. The weather in Brazil appears good right now, with some showers and rains in the forecast for this week. The Brazil crops are getting harvested now, but producers are not selling much. El Nino remains in the forecast and Coffee areas in Brazil could be affected by drought. This is the off-year for production there, anyway, and a drought would mean even less production. Vietnam is getting close to its next harvest. Production in Vietnam is estimated at or above 30 million bags. Some problems with too much rain have been noted in Central America. Drier conditions are wanted for harvesting, and mostly dry weather is in the forecast. New York is trying to establish a long-term low, while London is now looking bearish as it absorbs the Vietnamese harvest.
Overnight News: Certified stocks are lower today and are about 2.456 million bags. The ICO composite price is now 108.97 ct/lb. Brazil will get chances for showers. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers or dry conditions. Vietnam will get showers. ICE said that 327 contracts were delivered against ICE New York December futures today and that total deliveries for the month are now 327 contracts.
Chart Trends: Trends in New York are mixed. Support is at 113.00, 111.00, and 108.00 March, and resistance is at 117.00, 119.00 and 122.00 March. Trends in London are down with objectives of 1610 and 1580 January. Support is at 1620, 1610, and 1590 January, and resistance is at 1650, 1670, and 1690 January.

SUGAR
General Comments: Futures closed lower in both New York and London on outside markets as the US Dollar was very strong and Crude Oil and gasoline were sharply lower. Ideas for world Sugarcane and Sugar beets production continue to work a little lower. The ISO recently cut its world production estimate from 182.7 million tons to 180.5 million tons and said that there could be a production deficit against demand of about 2.2 million tons. Production losses are expected in India due to hot and dry weather earlier in the growing season and some recent reports of pest attacks. Industry sources noted less production and said that India will most likely have trouble meeting its export goals this year that range as high as 5 to 6 million tons. They will export, but not that much. Dry conditions continue in the EU, and Russia, but conditions are mostly good in Ukraine. Very good conditions are reported in Thailand, but dry conditions early in the year might have hurt yields. Brazil producers are worried about Cane production, and the market still talks about less production there this year. It was dry earlier, but most areas have had enough or too much rain now. The wet areas are mostly in the center-south region and reports indicate that the harvest is now delayed. The dry weather in much of Europe and in southern Russia near the Black Sea has hurt Sugar beets production potential in these areas.
Overnight News: Brazil will get showers. Temperatures should be near to above normal.
Chart Trends: Trends in New York are down with objectives of 1230 March. Support is at 1230, 1210, and 1190 March, and resistance is at 1260, 1290, and 1300 March. Trends in London are down with objectives of 333.00 and 326.00 March. Support is at 338.00, 336.00, and 330.00 March, and resistance is at 344.00, 347.00, and 353.00 March.

COCOA
General Comments Futures closed lower in both markets as the US Dollar moved higher. Word of dry weather in most of West Africa was considered negative for prices as the harvest pace can increase. Quality reports from West Africa are good and grinders are there in the ports and are willing to buy. That is supporting prices. The move lower in the last few sessions implies that the market has made at least a short-term top. Ideas of slightly lower production in West Africa give the Bulls reason to think that the current move down might be just a temporary correction. Reports from parts of West Africa indicate that the humidity has cost in terms of yield and quality recently. However, weather in the region is drier now and any production losses should be limited. The main crop harvest is active in West Africa. Conditions appear good in East Africa and Asia.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average mostly 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 lower today at 3.576 million bags. ICE said that 387 notices were posted for delivery against December New York futures and that total deliveries for the month are now 403 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2190, 2150, and 2140 March, with resistance at 2270, 2300, and 2370 March. Trends in London are mixed. Support is at 1610, 1600, and 1570 March, with resistance at 1660, 1670, and 1680 March.