Softs Report 08/27/2024

COTTON
General Comments: Cotton was lower yesterday after opening higher after breaking through the top of the recent trading range on the weekly charts. There are still ideas of weaker demand potential against an outlook for improved US production in the coming year. It looks like futures are cheap enough for now but speculators see no reason to buy except to cover short positions as there have been demand concerns about Bangladesh and China and ideas are that production is strong enough. The Delta should have the best looking crops right now, but crops in other areas are more suspect. Texas and the Southeast have seen some extreme heat so far this year, and Texas has also seen dry conditions at times during the growing season. Hot weather is likely for the Delta this week. Demand has been weaker so far this year but there are hopes for improved demand with the lower prices.
Overnight News:
Chart Trends: Trends in Cotton are mixed. Support is at 68.80, 67.40, and 66.30 December, with resistance of 71.30, 73.00 and 73.70 December.

This Week Last Week Last Year Average
Cotton Setting Bolls 89 84 87 77
Cotton Bolls Opening 25 19 23 23
Very Poor Poor Fair Good Excellent
Cotton This Week 12 16 32 34 6
Cotton Last Week 8 18 32 35 7
Cotton Last Year 23 21 23 28 5

FCOJ
General Comments: FCOJ closed sharply lower yesterday on apparent speculative and commercial selling as ideas of reduced production continue against reports of stronger demand as forecasts call for no tropical activity in the near future in the Atlantic. Nothing appeared threatening in the forecasts for this week as the current tropical system should stay in the ocean and there is nothing in the ocean to suggest that a storm is on its way to Florida. A very active year is forecast and there have been some reports of flooding in the state even with no huge storms. The market remains well supported in the longer term based on forecasts for tight supplies and very hot weather in Florida. The reduced production also appears to be at the expense of the greening disease. There are no weather concerns to speak of for Florida or for Brazil right now.
Overnight News:
Chart Trends: Trends in FCOJ are up with no objectives. Support is at 467.00, 463.00, and 467.00 September, with resistance at 525.00, 532.00, and 538.00 September.

COFFEE
General Comments: New York closed higher but in a trading range and London was closed yesterday with offers from Vietnam still hard to find but offers from Brazil and Indonesia in the market. Indonesian offers are now less as producers wait for higher prices before selling. The weather forecasters now say that conditions are good in Vietnam, but damage was done to crops earlier in the growing season and lower production is now expected for the next crop. There were also reports of poor Robusta yields in Brazil during the harvest due to small bean sizes but offers have been strong so far this season. Arabica yields in Brazil and Colombia are reported to be less this year due to extreme weather in both countries.
Overnight News: The ICO daily average price is now 245.77 ct/lb.
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 245.00, 237.00, and 230.00 September, and resistance is at 255.00, 261.00 and 264.00 September. Trends in London are up with no objectives. Support is at 4960, 4860, and 4670 September, with resistance at 5160, 5220, and 5280 September.

SUGAR
General Comments: New York closed higher and London was closed after reports of some big fires in Brazil Sugarcane fields and on short covering after demand concerns pushed futures to test recent lows. Chinese demand in particular is in focus amid the economic problems seen there. Harvest progress in Brazil and improved growing conditions in India and Thailand are the important fundamentals and growing conditions are turning drier in Brazil. Indian and Thai monsoon rains have been very beneficial and mills are expecting strong crops of cane. They are pushing the governments to allow exports but so far the governments have not agreed. Production estimates were raised in the northern hemisphere. Harvest yields of Sugarcane in Brazil are strong but should start falling but not enough to impact prices much. CONAB said production estimates for this year should be increased, but total production should still be less than last year.
Overnight News:
Chart Trends: Trends in New York are down with no objectives. Support is at 1850, 1810, and 1750 October and resistance is at 1930, 1960, and 1990 October. Trends in London are down with no objectives. Support is at 517.00, 511.00, and 501.00 October, with resistance at 533.00, 544.00, and 555.00 October.

COCOA
General Comments: New York closed a little higher last week and London closed a little lower in consolidation trading on tight supply conditions and reports of good crop conditions for the next crop at least in Ivory Coast. Production concerns in West Africa as well as demand from nontraditional sources along with traditional buyers keep supporting futures. Production in West Africa could be stronger this year on improved weather as there are currently good rains in Ivory Coast although cool temperatures are also reported. Ghana has had hot and dry conditions and there are reports that pods are being aborted. The availability of Cocoa from West Africa remains very restricted, but surplus production against demand is expected in the next crop year.
Overnight News:
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 9350, 8970, and 8360 September, with resistance at 10310, 10860, and 11110 September. Trends in London are mixed. Support is at 6120, 5880, and 5820 September, with resistance at 6880, 7080, and 7320 September.

Questions? Ask Jack Scoville today at 312-264-4322