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COTTON
General Comments: Cotton closed higher and trends are turning back to up. Traders are optimistic about demand. There is a lot of confusion about the rollout of the Coronavirus vaccine and its effects on the economy. For now the vaccine is restricted to those most at risk and the general population might not get shot for quite a while. Meanwhile, the economy is starting to go down due to a lack of stimulus funding from the federal government. Harvest is ongoing amid drier weather conditions in West Texas and the Delta and Southeast. Reports indicate that some Cotton could have been damaged in Georgia and the Carolinas and into eastern Virginia due to the excessive winds and rains caused by the hurricanes. Export demand has held strong despite stay at home orders and weaker economies around the world. Traders now hope for even more demand later as the vaccines are given out and the world economies start to recover.
Overnight News: The Delta and Southeast will get mostly dry conditions except for some showers on Friday in the Delta. Temperatures should average near to below normal in the Delta and in the Southeast. Texas will have mostly dry conditions or isolated showers and above normal temperatures. The USDA average price is now 68.69 ct/lb. ICE said that certified stocks are now 86,544 bales, from 88,901 bales yesterday. ICE said that 0 notices were posted for delivery against December contracts and that total deliveries for the month are now 354 contracts. USDA said that net Upland Cotton weekly export sales were 403,900 bales this year and 48,000 bales next year. Net Pima sales were 13,000 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7440, 7490, and 7740 March. Support is at 7250, 7200, and 7140 March, with resistance of 7450, 7430 and 7470 March.

FCOJ
General Comments: FCOJ was a little lower in quiet trading. The fundamentals remain mixed to negative. Florida has been spared any hurricanes or other serious storms this year. The Coronavirus is still promoting consumption of FCOJ at home. Restaurant and food service demand has been much less as no one is dining out. The weather in Florida is good with frequent showers to promote good tree health and fruit formation. Brazil has been too dry, but showers are falling in Brazil now and these need to continue to ensure good tree health. However, it could turn warm and dry again this week. Mexican crop conditions are called good with rains.
Overnight News: Florida should get isolated showers or dry conditions. Temperatures will average below normal. Brazil should get scattered showers and above normal temperatures.
Chart Trends: Trends in FCOJ are mixed. Support is at 124.00, 120.00, and 118.00 January, with resistance at 127.00, 129.00, and 131.00 January.

COFFEE
General Comments: Futures were lower on good world growing conditions and strong Brazil exports. It has been a weather market and the weather has improved in Brazil and in Vietnam. Central American weather is also improved as the dry season is getting started. Brazil is getting some rains now to improve flowering after an extended dry season. Vietnam is also drier after a series of tropical cyclones hit the country. The demand from coffee shops and other food service operations is still at very low levels as consumers are still drinking Coffee at home. Reports indicate that consumers at home are consuming blends with more Robusta and less Arabica. The Brazil harvest is over and producers are selling. Ideas are that production is very strong this year as it is the on year for the trees. Central America is offering at high differentials and with limited volumes. The weather is good in Colombia and Peru.
Overnight News: ICE certified stocks are higher today at 1.316 million bags. The ICO daily average price is now 110.35 ct/lb. Brazil will get scattered showers with near to above normal temperatures. Central America will get scattered showers after a hurricane earlier this week. Vietnam will see some big rains. ICE said that 37 contracts were tendered for delivery against December futures and that total deliveries for the month are now 1,589 contracts.
Chart Trends: Trends in New York are mixed. Support is at 116.00, 113.00, and 110.00 March, and resistance is at 121.00, 125.00 and 128.00 March. Trends in London are down with objectives of 1310 and 1280 January. Support is at 1310, 1280, and 1260 January, and resistance is at 1370, 1380, and 1390 January.

SUGAR
General Comments: New York and London closed higher and trends are turning up in both markets. Northern Brazil has been dry and production of cane in northern areas has been affected. It has been raining in south central Brazil, but these areas will turn warm and dry this week as the rains move farther to the north. The rains that have fallen have at least temporarily improved conditions. Brazil mills have been producing more Sugar and less Ethanol due to weak world and domestic petroleum prices. About 45% of the crush this year will go to Sugar, from 35% last year. India has a very big crop of Sugarcane this year. The Indian government has not announced the subsidy for exporters of Sugar so no exports are coming out of India yet. Sources told wire services that any subsidy will need to be significant to get export sales on the books. Thailand might have less this year due to reduced planted area and erratic rains during the monsoon season. It is dry again now. The EU is having problems with its Sugarbeets crop due to weather and disease. Coronavirus has returned to the world and has caused some demand concerns.
Overnight News: Brazil will get scattered showers. Temperatures should average above normal. ICE said that 326 delivery notices were posted for January Sugar 16 contracts.
Chart Trends: Trends in New York are up with objectives of 1510 and 1570 March. Support is at 1470, 1450, and 1420 March, and resistance is at 1510, 1530, and 1560 March. Trends in London are up with objectives of 407.00, 414.00, and 439.00 March. Support is at 406.00, 398.00, and 394.00 March, and resistance is at 410.00, 414.00, and 419.00 March.

COCOA
General Comments New York and London closed lower once again as the down trend continues but might be running out of steam. Speculators remain the best sellers. Industry has not been an active buyer in the last week. The move has come as importers look to find a way to source Cocoa without paying a premium demanded by Ivory Coast and Ghana. Both countries have instituted a living wage for producers there and are looking to tax exports to pay the increased wages. Buyers have been accused of using certified stocks from the exchange instead of buying from origin. However, it looks like the exchange buying has come to a halt for now. There are a lot of demand worries as the Coronavirus is making a comeback in the US. Europe is also seeing a return of the pandemic. The North American and European cocoa grinds were at least 4% lower than a year ago and the Asian cocoa grind was down 10% from last year.
Overnight News: Sporadic and light 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 2.988 million bags. ICE said that 0 contracts were tendered against December Cocoa and that total deliveries for the month are now 1,249 contracts.
Chart Trends: Trends in New York are down with no objectives. Support is at 2550, 2440, and 2330 March, with resistance at 2630, 2650, and 2670 March. Trends in London are down with objectives of 1690 March. Support is at 1700, 1690, and 1630 March, with resistance at 1760, 1790, and 1800 March.

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

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