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Friday, February 24, 2023 12:56:09 PM
Softs Report: Cotton, OJ, Coffee, Sugar, Cocoa
By: Jack Scoville | February 24, 2023
• COTTON
General Comments: Cotton was a little higher in consolidation trading yesterday. USDA forecast a significant reduction in US planted area for Cotton in its outlook conference yesterday. Futures are still showing bad demand fundamentals as the weekly export sales reports have shown moderate sales at best. Some ideas that demand could soon increase as China could start to open its economy in the next couple of months as Covid outbreaks should start to weaken as people get vaccinated or immune. Covid is now widespread in China so the beneficial economic effects of the opening are being delayed but these effects should start to be felt as the people there achieve immunity over the next week or two.
Overnight News: The Delta will get mostly dry conditions and above normal temperatures. The Southeast will see isolated showers and above normal temperatures. Texas will have mostly dry conditions and near normal temperatures. The USDA average price is now 80.12 ct/lb. ICE said that certified stocks are now 1,147 bales, from 8,900 bales yesterday. ICE NY said that 0 notices were posted for delivery against March contracgts and that total deliveries for the month are now 0 contracts. USDA said that weekly net Upland Cotton export sales were 435,300 bales this year and 11,900 bales next year. Net Pima sales were 1,400 bales this year and 0 balex next year.
Chart Trends: Trends in Cotton are mixed. Support is at 80.80, 80.50, and 80.10 May, with resistance of 83.50, 83.90 and 84.50 May.
• FCOJ
General Comments: FCOJ was higher yesterday as production remains the overriding force. Historically low estimates of production due in part to the hurricanes and in part to the greening disease that have hurt production, but conditions are significantly better now with scattered showers and moderate temperatures. The weather remains generally good for production around the world for the next crop including production areas in Florida that have been impacted in a big way by the two storms seen previously in the state. Brazil has some rain and conditions are rated good. Brazil continues to export to the EU and is increasing its exports to the US. Mexico is also exporting to the US. Even so, the Florida Dept of Citrus reported that inventories are still 40.6% below last year at 102.39 million pounds.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are mixed to up with no objectives. Support is at 234.00, 229.00, and 220.00 March, with resistance at 249.00, 253.00, and 256.00 March.
• COFFEE
General Comments: New York and London closed lower yesterday in correction trading after the big rally this week tied to higher differentials in Brazil caused by a lack of offers from producers. Producers are not offering right now and the market wonders how much Coffee is left in the country. Ideas of big production for Brazil continue due primarily to rains falling in Coffee production areas now. Vietnam is estimated to have veery good production this year due to a good growing season and less rain now as harvest expands again. There are ideas that production potential for Brazil had been overrated. The weather in Brazil is currently very good for production potential but worse conditions seen earlier in the growing cycle hurt the overall production prospects as did bad weather last year.
Overnight News: ICE certified stocks are lower today at 0.809 million bags. The ICO daily average price is now 180.91 ct/lb. Brazil will get scattered showers with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 0 contracts were tendered for delivery against March futures and that total deliveries for the month are now 572 contracts.
Chart Trends: Trends in New York are up with objectives of 209.00 May. Support is at 190.00, 187.00, and 184.00 May, and resistance is at 201.00, 205.00 and 206.00 May. Trends in London are up with no objectives. Support is at 2130, 2090, and 2080 May, and resistance is at 2210, 2250, and 2280 May.
• SUGAR
General Comments: New York and London closed higher yesterday as traders continue to factor in production losses in India and Brazil and other locations as well. Indian production is thought to be 33 million tons this year or less and the market has had to ration that supply via price. Thailand expects to export 7% more than last year. Good production prospects are seen for crops in central and northern areas of Brazil, but the south has seen drier weather. There is concern that the rainy areas will stay too wet and delay the harvest and dilute the Sugar concentrations in the cane in central areas. The harvest is active in Thailand. Australia and Central America harvests are also active. European production is expected to be reduced again this year.
Overnight News: Brazil will get scattered showers. Temperatures should average near to above normal. India will get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in New York are mixed to up with objectives of 2040 and 2080 May. Support is at 1990, 1960, and 1940 May and resistance is at 2050, 2080, and 2110 May. Trends in London are mixed. Support is at 564.00, 557.00, and 549.00 May and resistance is at 578.00, 582.00, and 588.00 May.
• COCOA
General Comments: New York and London closed mostly a little lower yesterday in correction trading as West African exporters are not offering. Wire reports suggest that exporters are currently looking for Cocoa to make good on current contracts and are not entering into new contracts right now. However, the Ivory Coast Cocoa and Coffee Council said that there will be more than enough Cocoa for export and that exporters can fix contracts. Trends have turned up in both New York and London. Talk is that hot and dry conditions reported in Ivory Coast could curtail mid crop production, but main crop production ideas are strong. Ghana has reported a disease in its Cocoa to hurt production potential there. The rest of West Africa appears to be in good condition. Good production is reported for the main crop and traders are worried about the world economy moving forward and how that could affect demand. The weather is good in Southeast Asia.
Overnight News: Mostly dry conditions are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average near normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 5.053 million bags. ICE NY said that there were 0 notices posted for delivery against March contracts and that total deliveries for the month are now 221 contracts.
Chart Trends: Trends in New York are up with objectives of 2840 and 2860 May. Support is at 2700, 2670, and 2650 May, with resistance at 2810, 2840, and 2870 May. Trends in London are mixed. Support is at 2100, 2060, and 2040 May, with resistance at 2150, 217e0, and 2200 May.
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By: Jack Scoville | February 24, 2023
• COTTON
General Comments: Cotton was a little higher in consolidation trading yesterday. USDA forecast a significant reduction in US planted area for Cotton in its outlook conference yesterday. Futures are still showing bad demand fundamentals as the weekly export sales reports have shown moderate sales at best. Some ideas that demand could soon increase as China could start to open its economy in the next couple of months as Covid outbreaks should start to weaken as people get vaccinated or immune. Covid is now widespread in China so the beneficial economic effects of the opening are being delayed but these effects should start to be felt as the people there achieve immunity over the next week or two.
Overnight News: The Delta will get mostly dry conditions and above normal temperatures. The Southeast will see isolated showers and above normal temperatures. Texas will have mostly dry conditions and near normal temperatures. The USDA average price is now 80.12 ct/lb. ICE said that certified stocks are now 1,147 bales, from 8,900 bales yesterday. ICE NY said that 0 notices were posted for delivery against March contracgts and that total deliveries for the month are now 0 contracts. USDA said that weekly net Upland Cotton export sales were 435,300 bales this year and 11,900 bales next year. Net Pima sales were 1,400 bales this year and 0 balex next year.
Chart Trends: Trends in Cotton are mixed. Support is at 80.80, 80.50, and 80.10 May, with resistance of 83.50, 83.90 and 84.50 May.
• FCOJ
General Comments: FCOJ was higher yesterday as production remains the overriding force. Historically low estimates of production due in part to the hurricanes and in part to the greening disease that have hurt production, but conditions are significantly better now with scattered showers and moderate temperatures. The weather remains generally good for production around the world for the next crop including production areas in Florida that have been impacted in a big way by the two storms seen previously in the state. Brazil has some rain and conditions are rated good. Brazil continues to export to the EU and is increasing its exports to the US. Mexico is also exporting to the US. Even so, the Florida Dept of Citrus reported that inventories are still 40.6% below last year at 102.39 million pounds.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are mixed to up with no objectives. Support is at 234.00, 229.00, and 220.00 March, with resistance at 249.00, 253.00, and 256.00 March.
• COFFEE
General Comments: New York and London closed lower yesterday in correction trading after the big rally this week tied to higher differentials in Brazil caused by a lack of offers from producers. Producers are not offering right now and the market wonders how much Coffee is left in the country. Ideas of big production for Brazil continue due primarily to rains falling in Coffee production areas now. Vietnam is estimated to have veery good production this year due to a good growing season and less rain now as harvest expands again. There are ideas that production potential for Brazil had been overrated. The weather in Brazil is currently very good for production potential but worse conditions seen earlier in the growing cycle hurt the overall production prospects as did bad weather last year.
Overnight News: ICE certified stocks are lower today at 0.809 million bags. The ICO daily average price is now 180.91 ct/lb. Brazil will get scattered showers with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 0 contracts were tendered for delivery against March futures and that total deliveries for the month are now 572 contracts.
Chart Trends: Trends in New York are up with objectives of 209.00 May. Support is at 190.00, 187.00, and 184.00 May, and resistance is at 201.00, 205.00 and 206.00 May. Trends in London are up with no objectives. Support is at 2130, 2090, and 2080 May, and resistance is at 2210, 2250, and 2280 May.
• SUGAR
General Comments: New York and London closed higher yesterday as traders continue to factor in production losses in India and Brazil and other locations as well. Indian production is thought to be 33 million tons this year or less and the market has had to ration that supply via price. Thailand expects to export 7% more than last year. Good production prospects are seen for crops in central and northern areas of Brazil, but the south has seen drier weather. There is concern that the rainy areas will stay too wet and delay the harvest and dilute the Sugar concentrations in the cane in central areas. The harvest is active in Thailand. Australia and Central America harvests are also active. European production is expected to be reduced again this year.
Overnight News: Brazil will get scattered showers. Temperatures should average near to above normal. India will get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in New York are mixed to up with objectives of 2040 and 2080 May. Support is at 1990, 1960, and 1940 May and resistance is at 2050, 2080, and 2110 May. Trends in London are mixed. Support is at 564.00, 557.00, and 549.00 May and resistance is at 578.00, 582.00, and 588.00 May.
• COCOA
General Comments: New York and London closed mostly a little lower yesterday in correction trading as West African exporters are not offering. Wire reports suggest that exporters are currently looking for Cocoa to make good on current contracts and are not entering into new contracts right now. However, the Ivory Coast Cocoa and Coffee Council said that there will be more than enough Cocoa for export and that exporters can fix contracts. Trends have turned up in both New York and London. Talk is that hot and dry conditions reported in Ivory Coast could curtail mid crop production, but main crop production ideas are strong. Ghana has reported a disease in its Cocoa to hurt production potential there. The rest of West Africa appears to be in good condition. Good production is reported for the main crop and traders are worried about the world economy moving forward and how that could affect demand. The weather is good in Southeast Asia.
Overnight News: Mostly dry conditions are forecast for West Africa. Temperatures will be near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average near normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are lower today at 5.053 million bags. ICE NY said that there were 0 notices posted for delivery against March contracts and that total deliveries for the month are now 221 contracts.
Chart Trends: Trends in New York are up with objectives of 2840 and 2860 May. Support is at 2700, 2670, and 2650 May, with resistance at 2810, 2840, and 2870 May. Trends in London are mixed. Support is at 2100, 2060, and 2040 May, with resistance at 2150, 217e0, and 2200 May.
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