Softs Report 11/13/19

COTTON
General Comments: Cotton was higher on follow through buying from speculators. USDA cut production and ending stocks for the US in its reports on Friday. The reports also showed less ending stocks in the world data with exporter nations producing less and China also with smaller ending stocks. The report was considered supportive to higher prices and the speculators have been buying. The charts do not necessarily show a bull market but prices have already moved higher for much of the second half of the year. USDA showed lower yields to account for the lower production as harvested area was left unchanged. Demand estimates were left unchanged. US Cotton producers have faced difficult weather all year. The Texas Panhandle in particular has seen drought and now is seeing very cold and freezing temperatures. The Southeast has seen rain and then a drought and now is getting much below normal temperatures. The difficult growing conditions are the reason for the lower yields.
Overnight News: The Delta should see dry weather and below normal temperatures, but trending to near to above normal by early next week. The Southeast should get some showers tomorrow then turn dry. Texas will have mostly dry conditions. Temperatures will be variable and on both sides of normal. The USDA average price is now 61.67 ct/lb. ICE said that certified stocks are now 51,114 bales, from 47,789 bales yesterday. USDA said that Cotton is now 62% harvested, from 53% last week, 53% last year, and 59% average.
Chart Trends: Trends in Cotton are mixed. Support is at 6410, 6390, and 6290 December, with resistance of 6500, 6550, and 6570 December.

FCOJ
General Comments: FCOJ was mixed as nearby months closed a little higher and deferred months closed a little lower. Overall chart patterns are not strong and it is possible that weaker prices are coming. Futures had held the same range for months but now are starting to look for lower prices and new demand as the US crop appears to be more than big enough. Good growing conditions and increased oranges production estimates by USDA this season have been bearish. The weather has been great for the trees as there have been frequent periods of showers and no hurricanes or other severe storms so far this year. Some areas have been dry lately and irrigation is being used. Cold weather has invaded the eastern two-thirds of the US and temperatures in most areas are much below normal. However, Florida should escape as temperatures are forecast to stay above freezing. More moderate temperatures should return in the next couple of days. Crop yields and quality should be high for Florida this year. Inventories of FCOJ in the state are high and are more than 32% above last year.
Overnight News: Florida should get mostly dry weather but showers about Friday. Temperatures will average mostly above normal but below normal this weekend. Brazil should get mostly dry weather and above normal temperatures. ICE said that 0 notices were posted for delivery against November contracts and that total deliveries for the month are now 206 contracts.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 93.00 and 85.00 January. Support is at 96.00, 95.00, and 92.00 January, with resistance at 101.00, 102.00, and 104.00 January.

DJ Florida FCOJ Movement And Pack
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING:
11/2/2019 Corresponding
Current Week Last
Week Season
11/2/2019 11/3/2018 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 294.40 220.69 33.4%
Retail/Institutional 5.74 5.70 0.7%
Total 300.14 226.40 32.6%
Pack
Bulk 0.28 0.72 -61.0%
Retail/Institutional 1.45 1.06 37.2%
Total Pack 1.73 1.77 -2.5%
Reprocessed -1.66 -1.69 -2.0%
Pack from Fruit 0.07 0.08 -13.7%
Receipts & Losses
Net Gain or Loss -0.06 -0.14 -59.7%
Imports – Foreign 0.23 1.31 -82.8%
Domestic Receipts 1.22 0.00 NA
Receipts of Florida Product
from Non-Reporting Entit 0.00 0.00 NC
Chilled OJ used in FCOJ 0.00 0.01 -100.0%
Reprocessed FCTJ 0.00 0.03 -88.4%
Total Carry Over, Receipt & Pack
Bulk 294.41 220.93 33.3%
Retail/Institutional 7.19 6.76 6.4%
Total 301.60 227.69 32.5%
MOVEMENT
Bulk
Domestic 3.94 4.91 -19.7%
Exports 0.47 0.16 187.7%
Total (Bulk) 4.41 5.07 -13.1%
Retail/Institutional
Domestic 1.00 1.08 -7.1%
Exports 0.00 0.00 NC
Total (Retail/Inst) 1.00 1.08 -7.1%
Total Movement 5.41 6.15 -12.0%
ENDING INVENTORY
Bulk 290.00 215.86 34.3%
Retail/Institutional 6.19 5.68 9.0%
Ending Inventory 296.19 221.54 33.7%
Total Same
Total Season Period Last
To Date Season
2-Nov-19 3-Nov-18 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 311.95 237.21 31.5%
Retail/Institutional 5.82 5.92 -1.6%
Total 317.77 243.13 30.7%
Pack
Bulk 1.32 3.69 -64.4%
Retail/Institutional 6.48 5.51 17.7%
Total Pack 7.80 9.20 -15.2%
Reprocessed -7.69 -8.97 -14.3%
Pack from Fruit 0.11 0.23 -52.7%
Receipts & Losses
Net Gain or Loss -0.12 -0.33 -63.1%
Imports – Foreign 3.19 9.09 -64.9%
Domestic Receipts 1.49 0.02 8650.8%
Receipts of Florida Product
from Non-Reporting Entit 0.00 0.00 NC
Chilled OJ used in FCOJ 0.00 0.23 -100.0%
Reprocessed FCTJ 0.07 0.07 -3.2%
Total Carry Over, Receipt & Pack
Bulk 310.19 241.01 28.7%
Retail/Institutional 12.31 11.42 7.7%
Total 322.50 252.43 27.8%
MOVEMENT
Bulk 18.43 24.35 -24.3%
Domestic 1.76 0.79 122.1%
Exports 20.19 25.15 -19.7%
Total (Bulk)
Retail/Institutional
Domestic 6.12 5.75 6.5%
Exports 0.00 0.00 NC
Total (Retail/Inst) 6.12 5.75 6.5%
Total Movement 26.31 30.89 -14.8%
ENDING INVENTORY
Bulk 290.00 215.86 34.3%
Retail/Institutional 6.19 5.68 9.0%
Ending Inventory 296.19 221.54 33.7%

COFFEE
General Comments: Futures were a little lower again yesterday on follow through selling tied to reports of beneficial rains in Brazil. Real weakness in the currency markets also hurt Coffee prices. It looks like offers are not appearing for nearby shipments from Brazil and Vietnam so the market has been rallying looking for business. There is just not much on offer right now as Brazil exporters say they are running out of supplies from previous crops and as Vietnamese sellers are not selling. The rally is coming despite ideas of big new crop production in both Brazil and Vietnam. The Brazilian crop is developing as rains have recently improved. Reports from Brazil indicate that flowering is off to a very good start. Rains are expected again in Coffee areas this week. Overall the Coffee areas remain in a rain deficit but have had some timely rains to start the flowering. Many now anticipate a big crop from Brazil next year despite stressful conditions earlier. The Asian harvest is underway but producers do not seem to be selling on ideas that prices are too low to provide profits. Vietnam exports remain behind a year ago, but the market anticipates bigger offers as prices move higher. Vietnam crops are thought to be big despite some uneven growing conditions this year.
Overnight News: ICE certified stocks are lower today at 2.207 million bags. The ICO daily average price is now 105.08 ct/lb. Brazil will get scattered showers this week and dry weather this weekend and above normal temperatures. Vietnam will see scattered showers in all areas, but trends are a little drier now.
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 104.00, 103.00, and 102.00 December, and resistance is at 108.00, 110.00 and 111.00 December. Trends in London are mixed to up with objectives of 1410 January. Support is at 1340, 1330, and 1300 January, and resistance is at 1390, 1410, and 1430 January.

DJ Cecafe: Brazil Coffee Exports Fell 13.1% in Oct.
By Jeffrey T. Lewis
SÃO PAULO–Brazilian coffee exports fell in October from the record for the month set last year, according to exporters group Cecafe.
The South American country exported 3.4 million 132-pound bags of coffee last month, a decline of 13.1% the same month a year earlier, Cecafe said Monday.
Sales abroad of the arabica variety of coffee fell 12.8% to 2.8 million bags, while exports of robusta beans decreased 25.7% to 274,001 bags.
Brazil is the world’s biggest producer and exporter of coffee. The country’s coffee production, especially of arabica beans, follows a two-year cycle in which the crop is bigger in even-numbered years. Output declines in odd-numbered years, as the coffee plants “rest” from the previous year’s effort, and exports can also shrink because farmers have less product to sell.
Exports of roasted, ground and instant coffee fell 1.9% in October to 321,911 bags, Cecafe said.

SUGAR
General Comments: Futures closed a little higher in New York and lower in London again yesterday. Overall charts trends are trying to turn up for the medium term in New York but are indicating price weakness in London. Ideas of tight offers even with a weaker Real are supporting Raw Sugar. White Sugar is lower on ideas of big supplies and little demand in Europe. Reports indicate that little is on offer from India. However, most think there is still more than enough Sugar for any demand and that India will have to sell sooner or later. Reports from India indicate that the country is seeing relatively good growing conditions and still holds large inventories from last year. However, these supplies are apparently not moving and this could be due to less government subsidy for mills and exporters.
Overnight News: Brazil will get scattered showers this week and dry weather this weekend. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1280 and 1310 March. Support is at 1240, 1220, and 1210 March, and resistance is at 1270, 1290, and 1300 March. Trends in London are mixed. Support is at 332.00, 331.00, and 327.00 March, and resistance is at 338.00, 340.00, and 345.00 March.

DJ Brazil Center-South Sugar Crush Up 30.7% at 32.6M Tons in 2H Oct. — Unica
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the second half of October compared with a year earlier, according to industry group Unica.
Center-south mills crushed 32.6 million metric tons of cane in the period, a rise of 30.7% from the same period a year earlier. They produced 1.5 million tons of sugar, up 57.8%, and made 2.05 billion liters of ethanol, an increase of 45.4%.
The production mix for the second half of last month was 32.1% sugar to 67.9% ethanol. A year earlier, the mix was 30.1% sugar and 69.9% ethanol.
Brazil is the world’s biggest sugar producer and exporter, and the center-south grows about 90% of the country’s cane.
In the season from April 1 through Nov. 1, mills in the region crushed 542.9 million tons of cane, up 6.3% from the same period a year earlier. Sugar production rose 3.3% to 25.2 million tons, and ethanol output rose 8% to 29.6 billion liters.
The production mix for the season through Nov. 1 was 35.1% sugar to 64.9% ethanol. A year earlier, the mix was 35.8% sugar and 64.2% ethanol.

COCOA
General Comments: Futures closed sharply higher and the weekly charts imply that a significant rally is possible over the next few weeks. Ideas of less offer at this time are supporting futures. Harvest is now active in West Africa and reports are that good volumes and quality are expected. The quarterly grind data was mixed and left people wondering how good the demand for chocolate will be. Ideas are that demand could turn out to be very good due to the current price action. The reports from West Africa imply that a big harvest is possible in the region. Ivory Coast arrivals are strong and are above year ago levels. The weather in Ivory Coast has improved due to reports of frequent showers. The precipitation is a little less now so there are no real concerns about disease. Ideas are that the next crop will be very good. Both Ivory Coast and Ghana are doing what they can do boost Cocoa prices.
Overnight News: Dry conditions or light showers are expected in West Africa. Temperatures will be near to below 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 3.249 million bags.
Chart Trends: Trends in New York are up with objectives of 2680 and 2850 December. Support is at 2600, 2570, and 2560 December, with resistance at 2640, 2650, and 2740 December. Trends in London are up with objectives of 2290 December. Support is at 1990, 1950, and 1940 December, with resistance at 2050, 2080, and 2110 December.