Morning Softs Report 01/03/18

General Comments: Cotton was lower on some follow through long liquidation selling. Trends remain up for now, but the bullish chart formation got hurt for the short-term. Producers remain limited sellers at best. Ideas are that prices can remain generally strong. Mills are caught unpriced on a lot of purchases and the market knows this. The On Call data from USDA each week has been given as a major reason to expect higher prices in the next month. Mills will have to pay up again to get covered due to the recent rally. The lower quality of the overall crop seems to be the biggest effects from the hurricanes seen during the growing season and then the freeze in the west at the tail end of the growing season. Some traders say that USDA is seriously underestimating demand for the fiber, while the others look to the high USDA ending stocks estimates and suggest that any demand can be easily met.
Overnight News: The Delta and the Southeast should get mostly dry conditions, although coastal Atlantic areas will get rain and Snow today and tomorrow. Temperatures should be below normal. Texas will see mostly dry conditions. Temperatures will be mostly below normal today and tomorrow, then will trend to above normal. The USDA average price is now 75.21 ct/lb. ICE said that certified stocks are now 47,597 bales, from 47,601 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 8000 March. Support is at 7720, 7700, and 7670 March, with resistance of 7900, 7940, and 7960 March.

General Comments: FCOJ closed a little lower as the current cold spell in the Eastern two-thirds of the US does not appear to extend very far into Florida. Overall weather conditions are considered good in Florida at this time, with mostly dry conditions, but with cooler temperatures that could help acid formation. The harvest is progressing well and fruit is being delivered to processors and the fresh fruit packers. Trees in Florida that are still alive now are showing fruit of good sizes, although many have lost a lot of the fruit. Florida producers are actively harvesting and performing maintenance on land and trees. Processors mostly getting field run fruit. FCOJ processors are also getting imports from Brazil, Mexico, and Europe
Overnight News: Florida should get rain today, then mostly dry weather and below normal temperatures. Brazil should get scattered showers and near to above normal temperatures.
Chart Trends: Trends in FCOJ are mixed to down with no objectives. Support is at 134.00, 132.00, and 131.00 March, with resistance at 139.00, 142.00, and 145.00 March.

General Comments: Futures were higher again in New York and in London as it appears that speculators moved to cover short positions. Speculators are very short the market in New York and are short in London. Reports of generally good growing conditions at this time in Brazil provided the best reasons to sell, but reduced exports from Brazil provide a good reason to buy. Ideas are that Vietnam also has a lot of Coffee to sell. Internal prices in Vietnam remain at high levels compared to London, and were stable last week. The situation seems little changed in Latin America. There is some demand around, but offers are hard to find. Buyers do not seem inclined to raise differential bids to secure supplies, and might be buying enough to avoid doing that. Many are concerned about the potential for reduced Brazil production due to earlier drought and the cold and dry Winter, although some exporters suggest that the loss potential has been greatly overestimated. There is plenty of rain in some areas now There are also reports of short crops in parts of Central America and some areas in South America due to the lack of farmer investment from the low prices.
Overnight News: Certified stocks are sharply higher today and are about 1.984 million bags. The ICO composite price is now 118.83 ct/lb. Brazil will get showers and storms each day into next week. Temperatures should be variable. Colombia should get isolated showers. Central America and southern Mexico should get isolated showers or dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are up with objectives of 134.00 March. Support is at 127.00, 125.00, and 124.00 March, and resistance is at 133.00, 134.00 and 136.00 March. Trends in London are mixed to up with no objectives. Support is at 1700, 1680, and 1650 March, and resistance is at 1740, 1760, and 1770 March.

General Comments: Futures were higher as the US Dollar moved lower and energy prices moved higher. The Crude Oil market is keeping an eye on Iran and Venezuela as both are major oil producers and both are in increasing political turmoil. Price action has been strong due to the strong demand for ethanol that has diverted some Brazil mill production away from Sugar. Mills in Brazil have decided to make more Ethanol as world Crude Oil and products prices have been very strong. Ideas are that these prices can continue strong as OPEC and Russia have agreed to keep production constrained compared to world demand. There are also ideas that index funds will add significantly to long positions in the rebalancing operations later this month.
Overnight News: Brazil should feature showers and storms each day into next week. Temperatures should be on both sides of normal
Chart Trends: Trends in New York are up with objectives of 1590 and 1630 March. Support is at 1480, 1460, and 1420 March, and resistance is at 1530, 1550, and 1580 March. Trends in London are up with no objectives. Support is at 392.00, 391.00, and 385.00 March, and resistance is at 399.00, 410.00, and 420.00 March.

General Comments: Futures closed higher. New York is once again at the top end of its recent trading range and appears to be putting a bottom together. London still displays a weaker chart pattern. A weaker US Dollar was supportive and the West African main harvest will start to wind down soon. Arrivals have been good in West Africa and are reported to be good in Southeast Asia so far this season. However, arrivals in West Africa have been behind year ago levels when they were expected to be above year ago levels. Prices are weak overall due to the ongoing harvest, but have found some good buying interest at current levels as some are now viewing the market as cheap. World supply ideas remain high.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get cry conditions and near to above normal temperatures. ICE certified stocks are higher today at 3.439 million bags.
Chart Trends: Trends in New York are mixed. Support is at 1870, 1850, and 1810 March, with resistance at 1950, 2000, and 2030 March. Trends in London are mixed. Support is at 1350, 1330, and 1300 March, with resistance at 1400, 1420, and 1450 March.
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