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Wednesday, March 29, 2023 11:54:13 AM
Softs Report: Cotton, OJ, Coffee, Sugar, Cocoa
By: Jack Scoville | March 29, 2023
• COTTON
General Comments: Cotton was sharply higher on ideas that the world economic problems were fading into the background. Chart trends turned mixed. The weekly export sales report showed good demand, and demand ideas are improving. Demand has been ramping up for the last couple of months but fell off. Some ideas that demand could soon increase more as China has opened its economy. China has also started buying again from Australia after refusing imports from that country for political reasons.
Overnight News: The Delta will get mostly dry conditions and near to below normal temperatures. The Southeast will see scattered showers and near to below normal temperatures. Texas will have mostly dry conditions and below normal temperatures. The USDA average price is now 80.27 ct/lb. ICE said that certified stocks are now 1,485 bales, from 1,485 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 8260, 8770, and 9910 May. Support is at 80.30, 79.80, and 77.90 May, with resistance of 82.50, 83.70 and 84.60 May.
• FCOJ
General Comments: FCOJ was a little lower yesterday in correction trading. Trends remain up in the market. Futures remain supported by very short Orange production estimates for Florida. Demand is thought to be backing away from FCOJ with prices as high as they are currently. 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.
Overnight News: Florida should get isolated showers. Temperatures will average near to above normal. Brazil should get scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 264.00 May. Support is at 245.00, 240.00, and 234.00 May, with resistance at 260.00, 263.00, and 269.00 May.
• COFFEE
General Comments: New York closed lower again yesterday, and London closed higher as trends remain up on the daily charts for London. The lack of offers from South America and Vietnam is still affecting prices and reports indicate that demand for Robusta from Vietnam is strong and increasing due to cost differentials with Arabica. Differentials are now weakening in Brazil, Honduras, and Colombia, but reports indicate that differentials might start to firm up again as production ideas are low for Colombia and Brazil. Ideas of big production for Brazil continue due primarily to rains falling in Coffee production areas now. Vietnam is estimated to have very good production this year due to a good growing season. There are other ideas that production potential for both countries has 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. Vietnam is getting less rain now to aid harvest progress but volumes offered have not increased.
Overnight News: ICE certified stocks are unchanged today at 0.747 million bags. The ICO daily average price is now 169.80 ct/lb. Brazil will get isolated showers in southern areas with above normal temperatures. Central America will get mostly dry conditions. Vietnam will see isolated showers.
Chart Trends: Trends in New York are mixed. Support is at 171.00, 170.00, and 167.00 May, and resistance is at 180.00, 184.00 and 190.00 May. Trends in London are up with objectives of 2270 May. Support is at 2140, 2090, and 2050 May, and resistance is at 2250, 2270, and 2300 May.
• SUGAR
General Comments: New York and London closed higher again, and the trends are up in New York and in London on the daily charts. Supplies are tight. Indian production is thought to be less than 33 million tons this year as mills are closing early there and Thailand mills are also closing earlier than expected so the crop there might be less. Brazil production is solid this year. Reports from private analysts suggest that Brazil can have a 13% increase in center-south production. Brazil producers are currently active in the futures market placing hedges on the production. European production is expected to be reduced again this year. Some analysts now say that Chinese production could be the lowest in six years due to bad growing conditions.
Overnight News: Brazil will get isolated showers in southern areas. Temperatures should average 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 2160, 2170, and 2210 May. Support is at 2100, 2070, and 2040 May and resistance is at 2140, 2160, and 2170 May. Trends in London are up with objectives of 627.00 May. Support is at 608.00, 600.00, and 594.00 May and resistance is at 621.00, 624.00, and 627.00 May.
• COCOA
General Comments: New York and London closed higher again yesterday, but New York May closed slightly lower. Trends remain up for at least the short term. Talk is that hot and dry conditions reported in Ivory Coast could curtail mid-crop production, and main crop production ideas are not strong. Ivory Coast exports are now 1.7857 million tons down 1.5% from last year. Those ideas changed a little over the previous weekend due to heavy rains reported in Cocoa areas of the country. Ghana has reported a disease in its Cocoa to hurt production potential there, but overall production expectations are high. 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: Isolated showers 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 isolated showers and near to above normal temperatures. ICE certified stocks are lower today at 5.233 million bags.
Chart Trends: Trends in New York are up with objectives of 2960 May. Support is at 2850, 2820, and 2780 May, with resistance at 2920, 2960, and 2990 May. Trends in London are mixed to up with objectives of 2170, 2180, and 2220 May. Support is at 2100, 2070, and 2030 May, with resistance at 2160, 2200, and 2230 May.
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By: Jack Scoville | March 29, 2023
• COTTON
General Comments: Cotton was sharply higher on ideas that the world economic problems were fading into the background. Chart trends turned mixed. The weekly export sales report showed good demand, and demand ideas are improving. Demand has been ramping up for the last couple of months but fell off. Some ideas that demand could soon increase more as China has opened its economy. China has also started buying again from Australia after refusing imports from that country for political reasons.
Overnight News: The Delta will get mostly dry conditions and near to below normal temperatures. The Southeast will see scattered showers and near to below normal temperatures. Texas will have mostly dry conditions and below normal temperatures. The USDA average price is now 80.27 ct/lb. ICE said that certified stocks are now 1,485 bales, from 1,485 bales yesterday.
Chart Trends: Trends in Cotton are up with objectives of 8260, 8770, and 9910 May. Support is at 80.30, 79.80, and 77.90 May, with resistance of 82.50, 83.70 and 84.60 May.
• FCOJ
General Comments: FCOJ was a little lower yesterday in correction trading. Trends remain up in the market. Futures remain supported by very short Orange production estimates for Florida. Demand is thought to be backing away from FCOJ with prices as high as they are currently. 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.
Overnight News: Florida should get isolated showers. Temperatures will average near to above normal. Brazil should get scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are up with objectives of 264.00 May. Support is at 245.00, 240.00, and 234.00 May, with resistance at 260.00, 263.00, and 269.00 May.
• COFFEE
General Comments: New York closed lower again yesterday, and London closed higher as trends remain up on the daily charts for London. The lack of offers from South America and Vietnam is still affecting prices and reports indicate that demand for Robusta from Vietnam is strong and increasing due to cost differentials with Arabica. Differentials are now weakening in Brazil, Honduras, and Colombia, but reports indicate that differentials might start to firm up again as production ideas are low for Colombia and Brazil. Ideas of big production for Brazil continue due primarily to rains falling in Coffee production areas now. Vietnam is estimated to have very good production this year due to a good growing season. There are other ideas that production potential for both countries has 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. Vietnam is getting less rain now to aid harvest progress but volumes offered have not increased.
Overnight News: ICE certified stocks are unchanged today at 0.747 million bags. The ICO daily average price is now 169.80 ct/lb. Brazil will get isolated showers in southern areas with above normal temperatures. Central America will get mostly dry conditions. Vietnam will see isolated showers.
Chart Trends: Trends in New York are mixed. Support is at 171.00, 170.00, and 167.00 May, and resistance is at 180.00, 184.00 and 190.00 May. Trends in London are up with objectives of 2270 May. Support is at 2140, 2090, and 2050 May, and resistance is at 2250, 2270, and 2300 May.
• SUGAR
General Comments: New York and London closed higher again, and the trends are up in New York and in London on the daily charts. Supplies are tight. Indian production is thought to be less than 33 million tons this year as mills are closing early there and Thailand mills are also closing earlier than expected so the crop there might be less. Brazil production is solid this year. Reports from private analysts suggest that Brazil can have a 13% increase in center-south production. Brazil producers are currently active in the futures market placing hedges on the production. European production is expected to be reduced again this year. Some analysts now say that Chinese production could be the lowest in six years due to bad growing conditions.
Overnight News: Brazil will get isolated showers in southern areas. Temperatures should average 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 2160, 2170, and 2210 May. Support is at 2100, 2070, and 2040 May and resistance is at 2140, 2160, and 2170 May. Trends in London are up with objectives of 627.00 May. Support is at 608.00, 600.00, and 594.00 May and resistance is at 621.00, 624.00, and 627.00 May.
• COCOA
General Comments: New York and London closed higher again yesterday, but New York May closed slightly lower. Trends remain up for at least the short term. Talk is that hot and dry conditions reported in Ivory Coast could curtail mid-crop production, and main crop production ideas are not strong. Ivory Coast exports are now 1.7857 million tons down 1.5% from last year. Those ideas changed a little over the previous weekend due to heavy rains reported in Cocoa areas of the country. Ghana has reported a disease in its Cocoa to hurt production potential there, but overall production expectations are high. 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: Isolated showers 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 isolated showers and near to above normal temperatures. ICE certified stocks are lower today at 5.233 million bags.
Chart Trends: Trends in New York are up with objectives of 2960 May. Support is at 2850, 2820, and 2780 May, with resistance at 2920, 2960, and 2990 May. Trends in London are mixed to up with objectives of 2170, 2180, and 2220 May. Support is at 2100, 2070, and 2030 May, with resistance at 2160, 2200, and 2230 May.
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