Morning Softs Report 09/14/18
Jack Scoville of The PRICE Futures Group - InsideFutures.com - Fri Sep 14, 10:30AM CDT

COTTON
General Comments: Cotton was lower as Hurricane Florence aimed for the Carolinas. The hurricane was losing force and was a Category 2 storm yesterday as it approached land. The wind and precipitation field was still big and was bigger than when the storm was more powerful, so significant damage is likely in affected states, mostly from southeast Virginia to South Carolina. The storm will stay in the area through the weekend as it will be blocked from moving inland with any real speed. Speculators sold due to the weaker winds seen in the storm. USDA increased production estimates on Wednesday due to increased area as yields were lower. The trade had expected a slight decrease in production. It also increased exports and forecast only a slight increase in ending stocks despite the increased production. World data showed few change. Weakness came as the trade once again focussed on Chinese demand amid new threats by the Trump administration to ramp up tariffs on Chinese goods. China has said it will respond in kind, and that has been bad news for US Ag markets. However, the US offered to meet in China with the government there in an effort to get talks started again and to try to avoid further trade war escalation. Little progress is expected at these meetings as Trump tweeted yesterday that he feels no pressure to make a deal. More storms are forming in the Atlantic that could bear down on other Cotton growing areas. Rains from the Indian monsoon have been below normal, but generally good enough to support crops. The trade there remains optimistic that a good crop is coming and that they will not need to import very much Cotton this year. China has been active in India buying and will buy as much as possible there to make up for production losses inside of China.
Overnight News: Dry into next week in the Delta, but showers in the Southeast and big storms from hurricane Florence through the weekend. Temperatures should be near to above normal. Texas will have mostly dry conditions, but a few showers are possible over the weekend. Temperatures will be above normal. The USDA average price is now 77.91 ct/lb. ICE said that certified stocks are now 20,893 bales, from 20,893 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 8120, 8000, and 7960 December, with resistance of 8300, 8390, and 8420 December.

DJ On-Call Cotton – Sep 13
As of Sep 7. 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
Dec 18 37,149 38,974 -1,825 20,371 21,231 -860
Mar 19 40,591 40,543 48 2,420 2,420 0
May 19 20,023 19,437 586 342 342 0
Jul 19 27,681 27,035 646 1,787 1,787 0
Dec 19 13,884 14,755 -871 16,531 16,484 47
Mar 20 5,300 4,718 582 209 209 0
May 20 2,042 1,689 353 0 0 0
Jul 20 1,873 1,167 706 0 0 0
Dec 20 1,158 1,158 0 1,828 1,784 44
Total 149,701 149,476 225 43,488 44,257 -769
Open Change
Int
Oct 18 174 179 -5
Dec 18 145,936 144,600 1,336
Mar 19 67,197 66,535 662
May 19 10,124 10,076 48
Jul 19 7,677 7,558 119
Oct 19 2 0
Dec 19 23,122 22,960 162
Mar 20 728 725 3
May 20 42 37 5
Jun 20 0 0 0
Jul 20 18 8 10
Dec 20 745 737 8
Total 255,765 253,417 2,348

FCOJ
General Comments: FCOJ was slightly lower yesterday as the Gulf of Mexico is still quiet and as the Atlantic hurricanes could miss the state. The hurricane season started to get much busier, and some of the storms now in the ocean could impact the state over the next week or so.. The Summer has been a quiet one in the Atlantic, but all that changed last week as one storm brushed Florida and another appeared headed to the middle of the north Atlantic Ocean. There are other systems developing that could impact Florida in the next week or so, but so far the track of these storms is unclear. Chart trends are mixed as the market has found some support from speculators due to the increase in storm activity. Florida is getting frequent periods of showers. Florida producers are seeing good-sized fruit, and work in groves maintenance is active. Some of the fruit is now tennis ball sized.
Overnight News: Florida should get mostly dry conditions or light showers. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to above normal temperatures. ICE said that 0 notices were posted today for delivery against September Contracts and that total deliveries for the month are 149 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 153.00, 152.00, and 151.00 November, with resistance at 156.00, 159.00, and 160.00 November.

DJ Florida FCOJ Movement and Pack – Sep 14
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 9/1/2018
Corresponding
Current Week Last
Week Season
9/1/2018 9/2/2017 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 253.15 174.14 45.4%
Retail/Institutional 5.98 6.14 -2.6%
Total 259.13 180.28 43.7%
Pack
Bulk 0.35 0.74 -53.1%
Retail/Institutional 1.19 1.03 15.6%
Total Pack 1.53 1.77 -13.2%
Reprocessed -1.53 -1.77 -13.2%
Pack from Fruit – – NC
Receipts & Losses
Net Gain or Loss -0.01 -0.09 -90.9%
Imports – Foreign 0.41 1.75 -76.7%
Domestic Receipts – 0.09 -100.0%
Receipts of Florida Product
from Non-Reporting Entit – – NC
Chilled OJ used in FCOJ 0.00 0.00 168.0%
Reprocessed FCTJ – 0.03 -100.0%
Total Carry Over, Receipt & Pack
Bulk 252.37 174.90 44.3%
Retail/Institutional 7.16 7.16 0.0%
Total 259.53 182.07 42.5%
MOVEMENT
Bulk
Domestic 4.60 2.70 70.4%
Exports 0.36 0.22 68.1%
Total (Bulk) 4.96 2.92 70.2%
Retail/Institutional
Domestic 0.85 1.31 -34.9%
Exports – – NC
Total (Retail/Inst) 0.85 1.31 -34.9%
Total Movement 5.82 4.22 37.7%
ENDING INVENTORY
Bulk 247.40 171.99 43.9%
Retail/Institutional 6.31 5.86 7.7%
Ending Inventory 253.71 177.84 42.7%
Total Same
Total Season Period Last
To Date Season
1-Sep-18 2-Sep-17 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 185.02 212.24 -12.8%
Retail/Institutional 7.20 6.78 6.1%
Total 192.21 219.03 -12.2%
Pack
Bulk 92.21 158.46 -41.8%
Retail/Institutional 60.35 65.79 -8.3%
Total Pack 152.56 224.26 -32.0%
Reprocessed -111.46 -149.80 -25.6%
Pack from Fruit 41.10 74.46 -44.8%
Receipts & Losses
Net Gain or Loss 0.86 -4.35 -80.2%
Imports – Foreign 287.47 216.22 33.0%
Domestic Receipts 8.36 6.91 21.0%
Receipts of Florida Produ 0.52 3.12 -83.3%
from Non-Reporting Entit 1.74 2.58 -32.4%
Chilled OJ used in FCOJ 0.61 2.75 -77.8%
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 465.32 448.13 3.8%
Retail/Institutional 67.55 72.58 -6.9%
Total 532.87 520.71 2.3%
MOVEMENT
Bulk 203.19 215.30 -5.6%
Domestic 14.73 60.84 -75.8%
Exports 217.92 276.14 -21.1%
Total (Bulk)
Retail/Institutional
Domestic 61.23 66.72 -8.2%
Exports 0.00 – NA
Total (Retail/Inst) 61.23 66.72 -8.2%
Total Movement 279.16 342.86 -18.6%
ENDING INVENTORY
Bulk 247.40 171.99 43.9%
Retail/Institutional 6.31 5.86 7.7%
Ending Inventory 253.71 177.84 42.7%

COFFEE
General Comments: : Futures lower and gave back the Wednesday gains in both markets. Futures continue to hold support and the charts suggest that lows could be trying to form once again. World demand remains soft even though prices have been weakening as no one wants to pay too much. In the meantime, certified stocks continue to build in ICE warehouses, implying that futures might still be too high-priced. Ideas of strong production in Brazil and Vietnam along with weakening emerging market currencies are keeping futures under selling pressure. Speculators have been looking at the weakness of the Brazilian Real against the US Dollar and have been selling Coffee on ideas of increased offers in Brazil. Vietnam is getting close to its next harvest, and ideas are that producers there need to sell more of the previous crop to create new storage space. Arabica trees in Brazil were starting to show stress due to the lack of rain over the last few months. Production in Vietnam is estimated at above 30 million bags and a new record. Growing conditions are called good.
Overnight News: Certified stocks are higher today and are about 2.298 million bags. The ICO composite price is now 98.74 ct/lb. Brazil will get some showers and storms through the weekend and dry weather next week. Temperatures should be near to mostly above normal. Colombia should get isolated showers. Central America and southern Mexico should get showers. Vietnam will get showers. ICE New York deliveries were 0 contracts for today and now total 1,063 contracts for the month.
Chart Trends: Trends in New York are mixed. Support is at 100.00, 99.00, and 96.00 December, and resistance is at 105.00, 107.00 and 108.00 December. Trends in London are mixed. Support is at 1490, 1470, and 1450 November, and resistance is at 1520, 1540, and 1560 November.

SUGAR
General Comments: New York prices were mixed and London was mostly higher as the weather remained dry in Brazil. Producers there say that more rain is needed for planting and for maintaining the condition of the current crop. Some precipitation is possible through the weekend. It has been very dry in Europe as well. Both markets are still showing that prices have made short-term lows and that a further short covering rally is possible. New York has moved through initial targets for the move up, but could run closer to 1300 March. There are uneven weather conditions in important growing areas. Dry conditions continue in Brazil, the EU, and Russia, but conditions are mostly good in Ukraine. Very good conditions are reported in Thailand and India. Dry weather in much of Europe and in southern Russia near the Black Sea has hurt Sugar beets production potential in these areas.
Overnight News: Brazil will get scattered showers through the weekend and dry weather next week.. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1290 March. Support is at 1210, 1190, and 1170 March, and resistance is at 1250, 1270, and 1290 March. Trends in London are up with objectives of 358.00 and 389.00 December. Support is at 348.00, 340.00, and 335.00 December, and resistance is at 358.00, 362.00, and 367.00 December.

COCOA
General Comments Futures closed lower. Prices are still in a very short-term trading range. The outlook for strong production in the coming year has been strong enough to keep the prices weak, but there are new disease concerns for West Africa. Some reports of Black Pod disease have surfaced in the last week in Nigeria, and Ivory Coast producers say that the recent big rains and humid air could promote the disease in their fields The main crop harvest is in its earliest stages in some parts of West Africa, but will not rally get going for at least another month. Main crop production ideas for Ivory Coast are high. Ghana and Nigeria are expecting very good crops this year as well. Conditions also appear good in East Africa and Asia.
Overnight News: Scattered showers and storms are expected in West Africa, with heavy amounts of precipitation possible. Temperatures will average near to below normal. Malaysia and Indonesia should see frequent 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 4.363 million bags. ICE said that 10 notices were posted for September delivery today and that total deliveries for the month are now 293 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2250, 2220, and 2190 December, with resistance at 2340, 2370, and 2400 December. Trends in London are mixed. Support is at 1630, 1610, and 1590 December, with resistance at 1670, 1700, and 1740 December.