Softs Report 03/22/19

COTTON
General Comments: Cotton was higher on big fund buying as May futures moved once again above 76.00 and this time was able to hold. Ideas of bad planting weather in parts of the US, including the Delta and Southeast, and ideas that demand can get better in world markets supported futures. NWS released its 30 and 90 day outlooks yesterday. The Delta and Southeast are expected to see above normal precipitation that could mean planting trouble for Cotton.. Everyone is waiting for the resolution of the US-China trade dispute, and the US government is indicating that a deal is going to be more difficult to achieve by the end of the month. The market anticipates that a deal is done in April. Both sides are negotiating the final points. China passed a law on Friday protecting foreign investments and investors. This had been a key demand from the US and something China had to do to comply with the TPP. The US weather calls for drier weather this week, but some showers are possible over the weekend and more rain is likely by late next week. Reports indicate that producers are active now in parts of Texas and in Georgia.
Overnight News: The Delta and Southeast should get mostly dry weather, but showers are possible on Sunday. Temperatures should be mostly above normal this weekend, then cooler. Texas will have showers today, then dry weather. Temperatures will be above normal after today. The USDA average price is now 71.64 ct/lb. ICE said that certified stocks are now 59,070 bales, from 106,796 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 7800 and 8210 May. Support is at 7590, 7520, and 7490 May, with resistance of 7790, 7850, and 7890 May.

DJ On-Call Cotton – Mar 21
As of Mar 15. 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 22,065 23,096 -1,031 12,045 13,571 -1,526
Jul 19 29,211 28,340 871 4,523 4,331 192
Dec 19 25,131 23,604 1,527 26,346 26,776 -430
Mar 20 10,483 9,851 632 1,252 1,186 66
May 20 3,913 3,853 60 197 197 0
Jul 20 4,418 4,391 27 18 0 18
Dec 20 5,155 4,786 369 6,116 5,664 452
Mar 21 749 484 265 309 176 133
Total 101,125 98,441 2,684 50,806 51,901 -1,095
Open Change
Int
Mar 19 0 36 -36
May 19 107,316 116,468 -9,152
Jul 19 47,789 41,943 5,846
Oct 19 9 10 -1
Dec 19 55,690 51,716 3,974
Mar 20 7,920 7,843 77
May 20 450 450 0
Jul 20 179 178 1
Dec 20 1,658 1,229 429
Mar 21 0 0 0
Total 221,011 219,873 1,138

FCOJ
General Comments: FCOJ was lower after trading to new highs for the move. The market hit targets on the upside and then went into a correction mode. It is possible that the market made a lasting high yesterday. Ideas continue that production remains strong and demand does not and are backed up by the weekly Florida Movement and Pack report that shows that inventories inside the state are significantly higher than a year ago. The Oranges harvest remains active in Florida as the weather is mostly dry. Producers are concentrating on harvesting Valencia. Irrigation is being used in all areas. Flowering for the next crop is seen everywhere and some small fruit is forming. Mostly good conditions are reported in Brazil, and some beneficial rains should be seen this week.
Overnight News: Florida should get mostly dry weather. Temperatures will average near normal. Brazil should get scattered showers and above normal temperatures. ICE said that 0 delivery notices were posted against March contracts and that total deliveries for the month are now 312 contracts.
Chart Trends: Trends in FCOJ are mixed to up with objectives of 131.00 May. Support is at 126.00, 122.00, and 117.00 May, with resistance at 131.00, 135.00, and 138.00 May.

COFFEE
General Comments Futures were little changed yesterday in both markets, with no one really interested in pushing prices a lot lower. Brazil continues to offer and has been a very large seller and exporter over the last couple of months. Prices are moving below profitable levels for most world producers. Further weakness will cause farmers in Brazil, Peru, and Vietnam to start losing money. 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. Ideas are that the current production of 62 or 63 or more million bags can become about 52 million bags next year. Showers are in the forecast for this week and crop conditions are called good. Vietnam is active in its harvest, but producers are not willing to sell at current prices. Production in Vietnam is estimated less than 30 million bags due to uneven weather during the growing season. It is still dry, and production potential for the next crop is getting hurt.
Overnight News: Certified stocks are slightly higher today and are about 2.447 million bags. The ICO composite price is now 96.79 ct/lb. Brazil will get mostly dry weather. Temperatures should be near normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get mostly dry weather.
Chart Trends: Trends in New York are down with objectives of 93.00 and 89.00 May. Support is at 94.00, 91.00, and 85.00 May, and resistance is at 98.00, 100.00 and 101.00 May. Trends in London are mixed to down with no objectives. Support is at 1490, 1480, and 1450 May, and resistance is at 1520, 1540, and 1550 May.

SUGAR
General Comments: New York closed lower while London was a little lower. The selling in New York came on the back of weaker Real in Brazil. Brazil did not make any headway in its effort to sell more Sugar to the US. The president of Brazil is in the US and wants to offer more open access for US Wheat in Brazil in return for more access for Brazil Sugar into the US. The two presidents are talking about expanded trade between the countries. The US Sugar market is completely controlled and the US government apparently did not respond very favorable to the Brazilian proposal. The fundamentals still suggest big supplies, and the weather in Brazil has improved to support big production ideas. Coopersucar estimates that the next crop crush could be 3.1% higher than the current crop crush. Brazil weather is improving in all areas as there is less rain in southern areas and more to the north. Demand for ethanol produced from Brazil is reported to be strong. Brazil has been using a larger part of its Sugarcane harvest to produce ethanol this year instead of Sugar, but Thailand has shown increased production this year. Indian Sugar production is very strong this year. Very good conditions are reported in Thailand.
Overnight News: Brazil will get mostly dry weather. Temperatures should be near normal.
Chart Trends: Trends in New York are mixed. Support is at 1220, 1210, and 1200 May, and resistance is at 1280, 1300, and 1340 May. Trends in London are mixed. Support is at 335.00, 333.00, and 329.00 May, and resistance is at 340.00, 343.00, and 347.00 May.

COCOA
General Comments: Futures closed lower on follow through selling and trends are down in both markets. Good weather in West Africa and ideas of a good mid crop production are reasons for the selling. The main crop harvest should be about over and mid crop harvest is just getting started. Ivory Coast arrivals have started to fade as the main crop harvest ends and the mid crop harvest gets started. However, arrivals are still about 10% ahead of a year ago. Growing conditions are generally good in West Africa. Some early week showers and cooler temperatures were beneficial, it is warmer now and showers are still in the forecast. Conditions appear good in East Africa and Asia.
Overnight News: scattered showers and rains are expected in West Africa. Temperatures will average near to 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 4.237 million bags.
Chart Trends: Trends in New York are down with objectives of 2090 and 1990 May. Support is at 2120, 2050, and 2020 May, with resistance at 2170, 2200, and 2220 May. Trends in London are down with objectives of 1590 and 1530 May. Support is at 1600, 1590, and 1580 Mary, with resistance at 1650, 1680, and 1720 May.