Jack Scoville is an often quoted market analyst in the grain and soft commodities sectors. You will find his commentary throughout the Reuters, Wall Street Journal, Dow Jones, Bloomberg, and Barron's publications. Contact Mr. Scoville at (312) 264-4322
Softs Report 01/04/2023
General Comments: Cotton was a little lower yesterday. Futures have been stuck in the same trading range since the beginning of November. The weekly export sales report showed improved sales but overall the demand for US Cotton has not been strong. Some ideas that demand could soon increase as China could start to open its economy in the next couple of months were hurt by news of Covid outbreaks in China. Covid is now widespread in China so the beneficial economic effects of the opening are being delayed. The people there do not trust the government vaccines. Demand has not improved with the reduction in prices and a lower US Dollar to date. Production in the US is very short.
Overnight News: The Delta will get mostly dry conditions and above normal temperatures. The Southeast will see scattered showers and above normal temperatures. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 82.10 ct/lb. ICE said that certified stocks are now 8,901 bales, from 8,901 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 79.80, 78.80, and 77.50 March, with resistance of 85.80, 87.40 and 89.60 March.
General Comments: FCOJ was lower yesterday in quiet trading, with worries still around about freeze damage to crops this weekend from freezing temperatures. Demand should start to improve now with the holidays now over. Futures look weak on the daily charts. The supply situation in the US and in the world market looks very tight. Historically low estimates of production due in part to the hurricanes and in part to the greening disease has hurt production remain in place but are apparently part of the price structure now. The weather remains generally good for production around the world for the next crop but not for production areas in Florida that have been impacted in a big way by the two storms. Brazil has some rain and conditions are rated good. Mostly dry conditions are in the forecast for the coming days.
Overnight News: Florida should get isolated showers. Temperatures will average above normal. Brazil should get scattered showers and near normal temperatures. ICE NY said that 0 notices were posted for delivery against January contracts and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 197.00, 194.00, and 192.00 March, with resistance at 206.00, 209.00, and 214.00 March.
General Comments: New York closed lower and London closed higher yesterday as the US Dollar rallied sharply. Producers remain quiet in Vietnam and most of Latin America but should be more active this week as sellers and buyers are in the new year. Vietnamese sellers should become more active in the next couple of weeks as they ty to get sales on the books before the Tet holiday. Buying interest is also reduced, but ideas are that the buy side needs Coffee now. Buyers are expected to look for Coffee at origin starting this week. Ideas of reduced Brazil production and reports of reduced offers into the cash market from Brazil and Vietnam continue, but the weather is good in Brazil and improving in Vietnam. The higher US Dollar should encourage some selling interest from Brazil. There are ideas that production potential for Brazil had been overrated and reports of too much rain in Vietnam affected the harvest progress. 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. Ideas are that the market will have more than enough Coffee when the next harvest comes in a few months.
Overnight News: ICE certified stocks are little changed today at 0.814 million bags. The ICO daily average price is now 157.78 ct/lb. Brazil will get isolated showers in northern areas with near normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are mixed. Support is at 165.00, 163.00, and 161.00 March, and resistance is at 175.00, 177.00 and 183.00 March. Trends in London are mixed to down with objectives of 1760 March. Support is at 1780, 1770, and 1760 March, and resistance is at 1860, 1890, and 1910 March.
General Comments: New York and London closed lower yesterday despite ideas of tight supplies available to the market. The US Dollar was sharply higher and ideas are that mills will be encouraged to produce more Sugar than Ethanol. These ideas were enhanced by news that Brazil president Lula has frozen fuel taxes at current levels, giving Ethanol producers a reason to switch to Sugar as profit margins could be squeezed by the tax moves. The harvest has been delayed in Thailand. Australia and Central America harvests are also delayed. India is producing White Sugar mostly from Raws imported from Brazil, so the market is thought to be short Raw Sugar. There is talk that production in India will be reduced this year after some bad weather and reduced yields reported in Maharashtra. Reports indicate that Indian mills have produced 30% more Sugar than last year until now for the current marketing year. The weather in Brazil remains good for the next crop but bad for harvest and loading at ports as it is still raining in production areas. World Sugar is expected to be in a big surplus production next year.
Overnight News: Brazil will get scattered showers. Temperatures should average near normal. India will get mostly dry conditions and near to above normal temperatures.
Chart Trends: Trends in New York are mixed to down with objectives of 1970, 1930, and 1790 March. Support is at 1950, 1930, and 1910 March and resistance is at 2010, 2050, and 2070 March. Trends in London are mixed to down with objectives of 54-0.0-0, 527.00, and 622.00 March. Support is at 545.00, 541.00, and 531.00 March and resistance is at 556.00, 565.00, and 568.00 March.
COCOAQuestions? Ask Jack Scoville today at 312-264-4322
General Comments: New York and London closed lower last week with the biggest losses in New York due to currency considerations. Ivory Coast arrivals appear to have improved lately with the recent rally in futures prices. Ivory coast arrivals are now 1.172 million tons, up 14% from last year. The Ivory Coast Cocoa grind is now 113,803 tons, up 6.9% from last year. Good production is reported and traders are worried about the world economy moving forward and how that could affect demand. Supplies of Cocoa are as large as they will be now for the rest of the marketing year. Reports of scattered showers along with very good soil moisture from showers keep big production ideas alive in Ivory Coast. Nigeria is reporting that Harmattan winds have arrived, but no significant effects are reported for now. 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 normal temperatures. ICE certified stocks are lower today at 4.816 mi0lion bags.
Chart Trends: Trends in New York are down with objectives of 2540 and 2470 March. Support is at 2540, 2520, and 2490 March, with resistance at 2620, 2670, and 2700 March. Trends in London are mixed. Support is at 2030, 2000, and 1980 March, with resistance at 2070, 2090, and 2120 March.