Jack Scoville is an often quoted market analyst in the grain and soft commodities sectors. You will find his commentary throughout the Reuters, Wall Street Journal, Dow Jones, Bloomberg, and Barron's publications. Contact Mr. Scoville at (312) 264-4322
MORNING SOFTS COMMENTS
Thursday, May 28, 2020
Price Futures Group, CBOT
JSL, SA de CV
San Salvador, El Salvador (503) 2260-7806 firstname.lastname@example.org
General Comments Cotton was slightly higher with differing opinions on the fate of Chinese demand keeping some buyers away. There has been concern that China will stop fulfilling its obligations in the Phase One trade deal due to ramped up US rhetoric on the Chinese response to the Coronavirus epidemic and now the unrest in Hong Kong. The world is starting to slowly recover from the Coronavirus scare and some stores are starting to open again after being closed for weeks. The hope that consumer demand for Cotton products will quickly return is not likely to be confirmed. Consumers have really been hurt economically due to stay at home orders imposed here and overseas and it will take some time for them to recover. As an example, Chinese stores have been open for several weeks but there has been no consumer rush to go to them and buy. The same is possible here and in Europe although the data so far is mixed in this regard. It has been dry in West Texas and producers are concerned over the fate of the crop there. It is too dry in Brazil for good growth of the second crop of Cotton.
Overnight News: The Delta will get periods of scattered showers through Thursday and isolated showers through Saturday and Southeast will get scattered showers. Temperatures should be mostly below normal. Texas will have dry conditions or isolated showers. Temperatures will average near normal. The USDA average price is now 53.91 ct/lb. ICE said that certified stocks are now 8,172 bales, from 6,732 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 5760, 5710, and 5680 July, with resistance of 5980, 6050 and 6100 July.
General Comments: FCOJ was higher and made new highs for the move before falling back slightly to close with moderate gains. Trends are still up in the market. Support is coming from the continued effects from the Coronavirus that are keeping people at home and drinking Orange Juice. Demand from grocery stores has remained strong in response to the increased consumer demand. Demand from the food service side has been much less. Oranges production was estimated as less in the latest USDA reports at below 70 million boxes, so supplies available to the market are somewhat reduced. Inventories in cold storage remain solid so there will be FCOJ to meet the demand. The weather in Florida has become much better for the crops. Southern areas are cooler now and have seen a few showers. The Valencia harvest is active. Brazil has been dry and irrigation has been used.
Overnight News: Florida should get periods of showers. Temperatures will average near normal. Brazil should get dry conditions and near to below normal temperatures. ICE said that 0 notices were posted for delivery against May contracts and that total deliveries for the month are 0 contracts.
Chart Trends: Trends in FCOJ are up with objectives of 132.00 July. Support is at 127.00, 123.00, and 121.00 July, with resistance at 130.00, 133.00, and 136.00 July.
General Comments: Futures were lower in both markets yesterday on the weaker Brazilian Real against the US Dollar. The world is starting to slowly reopen after the Coronavirus. Consumers are still drinking Coffee at home, but many smaller roasters are actively trying to unload green coffee already bought a there are only a few outlets for sales at this time. This might change a bit in the next few weeks as the US and EU economies slowly open up. The logistics of moving Coffee from Central and South America remain difficult. Producers have had trouble getting workers to pick the cherries and mills and processors have had trouble getting workers to staff the plants. Shipping logistics have improved somewhat, but many are still having trouble getting the Coffee to ports to move to consumer nations. Vietnamese producers are not selling due to the weaker prices paid currently and the effects of the Coronavirus. Indonesian producers are much more active sellers.
Overnight News: ICE certified stocks are lower today at 1.778 million bags. The ICO daily average price is now 103.14 ct/lb. Brazil will get scattered showers on Saturday and Sunday after a dry week with near to above normal temperatures. Dry and cool conditions next week. Vietnam will see light to moderate showers.
Chart Trends: Trends in New York are mixed. Support is at 102.00, 98.00, and 95.00 July, and resistance is at 107.00, 109.00 and 110.00 July. Trends in London are mixed to up with objectives of 1230 and 1320 July. Support is at 1210, 1190, and 1170 July, and resistance is at 1240, 1260, and 1280 July.
General Comments: New York and London closed mostly lower although deferred months in New York were higher. Crude Oil and products prices were lower. The Brazil mills are trying to cover the lack of White Sugar in the market and UNICA has shown the change in the production mix for the last several reports. Reports indicate that little is on offer from India in part due to logistical and harvest problems caused by the Coronavirus. Thailand might also have less this year due to reduced planted area and erratic rains during the monsoon season. There are reduced flows from rivers from China as well.
Overnight News: Brazil will get a dry week. Temperatures should average near to below normal.
Chart Trends: Trends in New York are mixed. Support is at 1070, 1040, and 1020 October, and resistance is at 1130, 1160, and 1180 October. Trends in London are mixed to up with objectives of 408.00 August. Support is at 364.00, 360.00, and 358.00 August, and resistance is at 379.00, 387.00, and 396.00 August.
General Comments: New York and London closed lower on speculative selling. Futures are still in trading ranges but are now at the lower end of those ranges. The virus has complicated farming and marketing efforts. Ideas are that deliveries can be slower on any contracted Cocoa and that the next crop could suffer as workers stay away. The Coronavirus helps keep demand away and helps keep workers from grinding facilities and chocolate manufacturers. 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.
Overnight News: Isolated to scattered showers are forecast for West Africa. Temperatures will be 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 4.269 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2340, 2320, and 2310 July, with resistance at 2410, 2460, and 2470 July. Trends in London are mixed. Support is at 1920, 1910, and 1890 July, with resistance at 1970, 1990, and 2000 July.
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