Futures Commentary and Analysis

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Morning Softs Report 12/05/17
Jack Scoville - IF - Tue Dec 05, 12:45PM CST

No More Comments Until Monday

DJ U.S. October Coffee, Cocoa Imports-Dec 5
In kilograms from the U.S. Commerce Department, converted to pounds
by Dow Jones.
—-Oct 2017—- —-Sep 2017—-
-coffee- kilograms pounds kilograms pounds
coffee, unroasted 110,052,571 242,665,919 108,662,346 239,600,473
coffee, roasted 7,363,750 16,237,069 7,261,409 16,011,407
coffee, soluble
instant 4,153,821 9,159,175 4,351,606 9,595,291
-Cocoa-
cocoa beans 7,178,181 15,827,889 8,430,756 18,589,817
sweetened bars/block
10 lbs or over 3,153,310 6,953,049 2,415,251 5,325,628
for retail candy 0 0 0 0
cocoa butter 8,953,492 19,742,450 8,865,980 19,549,486
cocoa paste,
not defatted 2,862,325 6,311,427 2,513,490 5,542,245
cocoa paste
defatted 4,887,727 10,777,438 5,439,255 11,993,557
cocoa powder,
unsweetened 10,906,029 24,047,794 10,556,283 23,276,604
cocoa powder,
sweetened 123,025 271,270 42,338 93,355
confectioners
coating 2,606,184 5,746,636 2,326,975 5,130,980
candy containing
chocolate 11,063,827 24,395,739 10,506,714 23,167,304

DJ Vietnam’s Green Coffee Bean Production To Rise 12% On Year
0221 GMT – Vietnam’s green-coffee-bean production this season should rise 12% to 29.9 million bags while exports only edge up to 25.5 million, the USDA predicts. “Favorable conditions helped coffee trees produce larger-size cherries, including better and longer productive branches. Both are expected to contribute to a high yield, which would lead to a record crop” this season. Robusta-coffee prices have fallen for months on expectations of increased supply. (lucy.craymer@wsj.com)

COTTON
General Comments: Cotton was mostly a little lower. Speculators were the best sellers. Speculators are already long, and mills have been forced to buy to cover open on call positions in the cash market. The futures market is watching the harvest roll along into its final stages and is debating the demand for US and world Cotton. 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. Farmers are reported to be quiet sellers right now. Harvest conditions are good in just about all areas, but it will turn dry and very cold in Texas this week.
Overnight News: The Delta and the Southeast should get mostly dry conditions, but rain is likely tomorrow. Temperatures should be near to above normal today, than below normal. Texas will see mostly dry conditions. Temperatures will be below normal. The USDA average price is now 70.56 ct/lb. ICE said that certified stocks are now 47,628 bales, from 47,628 bales yesterday. ICE said that 0 contracts were tendered for delivery yesterday and that total deliveries for the month are 0 contracts.
Chart Trends: Trends in Cotton are mixed to up with objectives of 7500 March. Support is at 7230, 7100, and 7080 March, with resistance of 7340, 7380, and 7420 March.

DJ U.S. October Cotton Exports – Dec 5
In kilograms and in running 480-pound bales. Source. U.S. Department
Commerce.
(*)NOTE: Year ago figures reflect data reported at that time.
Data includes Exports and Re-Exports.
——- In Kilograms ——-
Oct 17 Sep 17 Aug 17 Oct 16(*)
Upland, under 1 inch 915,820 1,504,125 3,635,743 966,529
1 to 1 1/8 inch 43,114,062 51,346,510 61,932,550 49,678,265
upland 1 1/8 and over 50,921,846 69,340,485 134,087,366 67,430,649
Amer Pima, over 1 1/8 inc 2,383,673 3,398,318 3,524,848 5,837,883
All cotton 97,335,401 125,589,438 203,180,507 123,913,326
——- In Running 480-Pound Bales ——-
Oct 17 Sep 17 Aug 17 Oct 16(*)
Upland, under 1 inch 4,206 6,908 16,699 4,439
1 to 1 1/8 inch 198,021 235,833 284,454 228,170
upland 1 1/8 and over 233,882 318,478 615,858 309,706
Amer Pima, over 1 1/8 inc 10,948 15,608 16,189 26,813
All cotton 447,058 576,828 933,200 569,129

FCOJ
General Comments: FCOJ closed a little lower on follow through selling yesterday. Short term trends turned down with the price action last week, but the move lower could be limited as the freeze season is just around the corner and the current crop is still very small. Overall weather conditions are considered good in Florida at this time, with mostly dry and warm conditions. 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 what is left as cleanup from the hurricane is about over now. The emphasis is on the fresh fruit market now, with processors mostly getting packing house eliminations at this time. However, processors are taking deliveries from producers now as well.
Overnight News: Florida should get mostly dry weather and near normal temperatures. Scattered showers are expected today. Brazil should get mostly dry conditions and near to above normal temperatures. Some showers are possible this weekend. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are now 38 contracts.
Chart Trends: Trends in FCOJ are down with objectives of 160.00 and 156.00 January. Support is at 160.00, 157.00, and 155.00 January, with resistance at 165.00, 168.00, and 169.00 January.

DJ Florida FCOJ Movement And Pack – Dec 4
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING: 11/25/2017
Corresponding
Current Week Last
Week Season
11/25/2017 11/26/2016 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 174.64 184.28 -5.2%
Retail/Institutional 7.22 7.34 -1.7%
Total 181.86 191.63 -5.1%
Pack
Bulk 1.51 2.18 -30.7%
Retail/Institutional 0.84 1.22 -31.4%
Total Pack 2.35 3.40 -30.9%
Reprocessed -1.55 -3.13 -50.6%
Pack from Fruit 0.80 0.27 197.2%
Receipts & Losses
Net Gain or Loss 0.19 -0.01 2980.3%
Imports – Foreign 0.74 0.52 42.4%
Domestic Receipts 0.32 0.09 239.3%
Receipts of Florida Product
from Non-Reporting Entity – 0.00 -100.0%
Chilled OJ used in FCOJ – 0.02 -100.0%
Reprocessed FCTJ – – NC
Total Carry Over, Receipt & Pack
Bulk 175.85 183.96 -4.4%
Retail/Institutional 8.06 8.56 -5.9%
Total 183.91 192.52 -4.5%
MOVEMENT
Bulk
Domestic 1.98 2.73 -27.5%
Exports 0.16 0.40 -59.6%
Total (Bulk) 2.14 3.13 -31.7%
Retail/Institutional
Domestic 0.92 1.21 -24.1%
Exports – – NC
Total (Retail/Inst) 0.92 1.21 -24.1%
Total Movement 3.06 4.34 -29.5%
ENDING INVENTORY
Bulk 173.71 180.83 -3.9%
Retail/Institutional 7.14 7.36 -2.9%
Ending Inventory 180.86 188.19 -3.9%
Total Same
Total Season Period Last
To Date Season
25-Nov-17 26-Nov-16 % 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 8.87 11.63 -23.7%
Retail/Institutional 10.61 12.64 -16.1%
Total Pack 19.48 24.27 -19.7%
Reprocessed -16.20 -22.77 -28.8%
Pack from Fruit 3.28 1.50 118.7%
Receipts & Losses
Net Gain or Loss 0.57 -0.68 -15.2%
Imports – Foreign 28.78 25.77 11.7%
Domestic Receipts 1.52 0.09 1534.0%
Receipts of Florida Product 0.03 0.67 -96.1%
from Non-Reporting Entity 0.13 0.08 63.5%
Chilled OJ used in FCOJ – 0.14 -100.0%
Reprocessed FCTJ
Total Carry Over, Receipt & Pack
Bulk 208.71 227.17 -8.1%
Retail/Institutional 17.81 19.43 -8.3%
Total 226.52 246.60 -8.1%
MOVEMENT
Bulk 33.35 33.68 -1.0%
Domestic 1.64 12.66 -87.0%
Exports 35.00 46.34 -24.5%
Total (Bulk)
Retail/Institutional
Domestic 10.67 12.07 -11.6%
Exports – – NC
Total (Retail/Inst) 10.67 12.07 -11.6%
Total Movement 45.66 58.41 -21.8%
ENDING INVENTORY
Bulk 173.71 180.83 -3.9%
Retail/Institutional 7.14 7.36 -2.9%
Ending Inventory 180.86 188.19 -3.9%

COFFEE
General Comments: Futures were lower in New York and in London. New York is fading against important resistance on the weekly charts that exists at about the 130.00 level. The trends remain sideways to down in London on the daily charts and down on the weekly charts. The market expects an increase in offers of Robusta from Vietnam in the short-term, but those offers have been slow in coming. Internal prices in Vietnam remain at high levels compared to London. Many Arabica traders had been expecting the market to move higher due to ideas of smaller crops from all over Latin America, and especially Brazil. Brazil exports are reduced on what is called reduced inventories held by exporters and producers. 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, but dry weather could return soon and stress the trees again 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 slightly higher today and are about 1.927 million bags. The ICO composite price is now 116.92 ct/lb. Brazil will get showers and storms again today and then starting Monday. Temperatures should average near to below normal. Colombia should get scattered to isolated showers. Central America and southern Mexico should get scattered showers or dry conditions. Temperatures should average near to above normal. ICE said that 510 delivery notices were posted against December contracts today and that total deliveries for the month are now 2,881 contracts.
Chart Trends: Trends in New York are mixed. Support is at 127.00, 126.00, and 125.00 March, and resistance is at 133.00, 134.00 and 136.00 March. Trends in London are mixed to down with no objectives. Support is at 1700, 1680, and 1650 January, and resistance is at 1780, 1800, and 1830 January.

SUGAR
General Comments: Futures were a little higher in New York and a little lower in London on Friday. Futures were lower for the week in New York. Chart trends are still turning up again longer term as the market rallies in part with strength in energy markets and in part on US Dollar weakness. However, the market has been fading against resistance areas for the last week and might need to correct a bit more before resuming any rally attempt. In fact, London turned its trends down on Monday. Brazil features a strong sugarcane crush and continued emphasis on ethanol production and reduced Sugar production as it moves to cover domestic demand at the expense of exports. Sugar production is now below year again levels. Trends could be turning up longer term in London and in New York after the price action last week on ideas of reduced availability of Sugar to the market due to the ethanol use. The lack of demand against ideas of big world production remains the major negative factor.
Overnight News: Brazil should feature showers and storms most of the week. Temperatures should be near to above normal
Chart Trends: Trends in New York are mixed. Support is at 1480, 1460, and 1430 March, and resistance is at 1530, 1550, and 1580 March. Trends in London are mixed. Support is at 380.00, 377.00, and 374.00 March, and resistance is at 389.00, 395.00, and 396.00 March.

COCOA
General Comments: Futures closed lower in both markets again yesterday and it looks like lower prices are coming as the new crop comes to market in West Africa. Trends are turning down on the weekly charts, and it is possible that a return to the range that existed for months is coming. There should be plenty of Cocoa available to the market as the main harvest in West Africa has been active. Weather consultants think that the crops are in mostly good condition, and the condition is likely to stay good in La Nina brings increased rains to production areas. It has been unseasonably wet in parts of West Africa, so some diseases could be forming. Demand ideas are holding strong as processor margins have been great. Ivory Coast processing data was strong in a report released Tuesday. World production ideas remain high.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 3.690 million bags. ICE said that 0 notices were posted for delivery today and that total deliveries for the month are now 422 contracts.
Chart Trends: Trends in New York are down with objectives 1980 and 1890 March. Support is at 1960, 1930, and 1910 March, with resistance at 2040, 2070, and 2080 March. Trends in London are down with objectives of 1360 March. Support is at 1460, 1430, and 1400 March, with resistance at 1500, 1520, and 1540 March.
Questions? Ask Jack Scoville today at 312-264-4322

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The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or futures. The Price Futures Group, its officers, directors, employees, and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Reproduction and/or distribution of any portion of this report are strictly prohibited without the written permission of the author. Trading in futures contracts, options on futures contracts, and forward contracts is not suitable for all investors and involves substantial risks. ©2017


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