Softs Report 02/09/2023

COTTON
General Comments: Cotton was lower yesterday and still remains inside the trading range created since the beginning of November. The market recovered much of its losses after the WASDE report weas released. WASDE showed less domestic use and an increase in ending stocks to 230,000 bales. World data showed less production to help futures recover from the lows. Futures still appear destined to trade down to the bottom of that range at about 8000 March. Futures are still showing bad demand fundamentals as the weekly export sales reports have shown moderate sales at best. Overall, the demand for US Cotton has not been strong although better demand has developed over the last couple of weeks. 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 few weeks.
Overnight News: The Delta will get isolated to scattered showers and above normal temperatures. The Southeast will see scattered showers and above normal temperatures. Texas will have mostly dry conditions and near to below normal temperatures. The USDA average price is now 83.19 ct/lb. ICE said that certified stocks are now 1,147 bales, from 8,900 bales yesterday. USDA said that weekly net Upland Cotton expot sales were 262,800 bales this year and 4,800 bales next year. Net Pima sales were 1,300 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 83.10, 82.00, and 81.30 March, with resistance of 87.00, 87.50 and 88.90 March.

U.S. Cotton Supply and Use 1/
================================================================================
2020/21 2021/22 Est. 2022/23 Proj. 2022/23 Proj.
Item Jan Feb
================================================================================
Million Acres
Planted 12.09 11.22 13.76 13.76
Harvested 8.22 10.27 7.44 7.44
Pounds
Yield per Harvested
Acre 853 819 947 947
Million 480 Pound Bales
Beginning Stocks 7.25 3.15 3.75 3.75
Production 14.61 17.52 14.68 14.68
Imports 0.00 0.01 0.01 0.01
Supply, Total 21.86 20.68 18.44 18.44
Domestic Use 2.40 2.55 2.20 2.10
Exports, Total 16.35 14.62 12.00 12.00
Use, Total 18.75 17.17 14.20 14.10
Unaccounted 2/ -0.04 -0.24 0.04 0.04
Ending Stocks 3.15 3.75 4.20 4.30
Avg. Farm Price 3/ 66.3 91.4 83.0 83.0
================================================================================
WASDE – 633 – 18 February 2023

World Cotton Supply and Use 1/
(Million 480-Pound Bales)
================================================================================
Supply Use
Region Beginning Produc- Loss Ending
Stocks tion Imports Domestic Exports 2/ Stocks
================================================================================
2022/23 Proj.
World
Jan 85.34 115.40 41.63 110.85 41.66 -0.08 89.93
Feb 85.24 114.37 40.44 110.66 40.38 -0.08 89.08
World Less China
Jan 48.03 87.40 33.88 75.35 41.53 -0.08 52.49
Feb 47.92 85.87 32.69 74.66 40.26 -0.08 51.64
United States
Jan 3.75 14.68 0.01 2.20 12.00 0.04 4.20
Feb 3.75 14.68 0.01 2.10 12.00 0.04 4.30
Total Foreign
Jan 81.59 100.72 41.62 108.65 29.66 -0.12 85.73
Feb 81.49 99.69 40.44 108.56 28.38 -0.12 84.78
Major Exporters 4/
Jan 32.11 57.74 2.45 31.16 25.54 -0.17 35.78
Feb 32.04 56.03 2.32 31.08 24.25 -0.17 35.23
Major Importers 8/
Jan 46.75 39.74 36.90 73.41 2.87 0.06 47.06
Feb 46.75 40.38 35.84 73.40 2.86 0.06 46.66
================================================================================
WASDE – 633 – 28 February 2023

FCOJ
General Comments: FCOJ was higher again yesterday and closed at new highs for the move. The moves were supported by a new round of USDA production reports. The reports showed that Florida produced only 16 million boxes of Oranges this year. Florida oranges are the main food stock for the FCOJ processors. Chart trends are up on the daily and weekly charts. Demand should start to improve as the northern Winter passes by. 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.
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 up with no objectives. Support is at 243.00, 230.00, and 220.00 March, with resistance at 253.00, 259.00, and 265.00 March.

Orange Production Down 3 Percent from January Forecast
The United States all orange forecast for the 2022-2023 season is
2.61 million tons, down 3 percent from the previous forecast and
down 25 percent from the 2021- 2022 final utilization. The Florida all orange
forecast, at 16.0 million boxes (720,000 tons), is down 11 percent from the
previous forecast and down 61 percent from last season’s final utilization.
In Florida, early, midseason, and Navel varieties are forecast at
6.00 million boxes (270,000 tons), down 14 percent from the previous forecast
and down 67 percent from last season’s final utilization. The Florida
Valencia orange forecast, at 10.0 million boxes (450,000 tons), is
down 9 percent from the previous forecast and down 56 percent from last
season’s final utilization.

COFFEE
General Comments: New York and London closed lower yesterday with New York leading the way. Ideas of big production for Brazil continue due primarily to rains falling in Coffee production areas now and as offers stayed strong from Brazil and increasingly from Vietnam. 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 higher today at 0.891 million bags. The ICO daily average price is now 172.50 ct/lb. Brazil will get isolated showers in northern areas with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.
Chart Trends: Trends in New York are mixed to up with objectives of 204.00 and 237.00 March. Support is at 170.00, 167.00, and 165.00 March, and resistance is at 178.00, 184.00 and 186.00 March. Trends in London are mixed to up with no objectives. Support is at 2040, 2020, and 2000 March, and resistance is at 2110, 2120, and 2150 March.

SUGAR
General Comments: New York and London closed higher again yesterday and trends are starting to turn up on the daily charts. Ideas are that the market has priced in production losses in India and is providing renumeration for Indian and Thai exporters who want to sell. Ideas of better supplies coming might keep futures prices in check even with a rather tight nearby scenario. Good production prospects are seen for crops in central and northern areas of Brazil, but the south should turn dry again and so should some northern areas. The harvest is active in Thailand. Australia and Central America harvests are also active. Mills in Brazil are shutting down now with the majority of the harvest now complete and processed.
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. ICE NY said that 98 notices were post4ed against March futures for Sugar 16 contracts
Chart Trends: Trends in New York are mixed to up with objectives of 2150 and 2200 March. Support is at 2100, 2050, and 2020 March and resistance is at 2190, 2220, and 2250 March. Trends in London are mixed to up with objectives of 603.00 and 692.00 March. Support is at 555.00, 547.00, and 541.00 March and resistance is at 571.00, 579.00, and 583.00 March.

Sugarcane Area Harvested, Yield, and Production by Use – States and United States: 2021 and 2022
————————————————————————————————–
Use and State : Area harvested : Yield per acre 1/ : Production 1/
:——————————————————————-
: 2021 : 2022 : 2021 : 2022 : 2021 : 2022
————————————————————————————————–
: 1,000 acres —– tons —– — 1,000 tons —
For sugar :
Florida ………………….: 388.0 382.0 42.4 44.3 16,451 16,923
Louisiana 2/ ……………..: 466.0 475.0 29.0 33.3 13,514 15,818
Texas 2/ …………………: 34.3 31.4 30.8 21.8 1,056 685
United States …………….: 888.3 888.4 34.9 37.6 31,021 33,426
For seed :
Florida ………………….: 15.5 15.9 47.5 47.4 736 754
Louisiana 2/ ……………..: 29.3 22.8 34.5 35.9 1,011 819
Texas 2/ …………………: 2.1 0.5 33.5 23.3 70 12
United States …………….: 46.9 39.2 38.7 40.4 1,817 1,585
For sugar and seed :
Florida ………………….: 403.5 397.9 42.6 44.4 17,187 17,677
Louisiana 2/ ……………..: 495.3 497.8 29.3 33.4 14,525 16,637
Texas 2/ …………………: 36.4 31.9 30.9 21.8 1,126 697
United States …………….: 935.2 927.6 35.1 37.7 32,838 35,011
————————————————————————————————–
1/ Net tons.
2/ Estimates are carried forward from an earlier estimate.

U.S. Sugar Supply and Use 1/
================================================================================
2020/21 2021/22 Est. 2022/23 Proj. 2022/23 Proj.
Item Jan Feb
================================================================================
1000 Short Tons, Raw Value
Beginning Stocks 1618 1705 1819 1820
Production 2/ 9233 9157 9248 9231
Beet Sugar 5092 5155 5048 5100
Cane Sugar 4141 4002 4199 4131
Florida 2090 1934 1989 2014
Louisiana 1918 1944 2113 2030
Texas 134 124 97 87
Imports 3221 3646 3458 3463
TRQ 3/ 1749 1579 1606 1611
Other Program 4/ 292 298 250 250
Non-program 1180 1769 1602 1602
Mexico 968 1379 1477 1477
High-tier tariff/other 212 390 125 125
Total Supply 14072 14508 14525 14514
Exports 49 29 35 35
Deliveries 12277 12578 12605 12605
Food 12161 12470 12500 12500
Other 5/ 116 107 105 105
Miscellaneous 40 81 0 0
Total Use 12367 12688 12640 12640
Ending Stocks 1705 1820 1885 1874
Stocks to Use Ratio 13.8 14.3 14.9 14.8
================================================================================
Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/
================================================================================
Supply Use
Fiscal Beginning Produc- Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
================================================================================

1000 Metric Tons, Actual Weight

Sugar
2021/22 Est.
Jan 1053 6185 31 4629 1676 964
Feb 1053 6185 31 4629 1676 964
2022/23 Proj.
Jan 964 5900 35 4661 1267 971
Feb 964 5900 35 4660 1268 971
================================================================================
WASDE – 633 – 17 February 2023

COCOA
General Comments: New York closed a little higher and London closed a little lower yesterday with currency considerations most important.. Both markets show that futures are starting to turn down from mostly a range trade. 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. The North American grind was 8.1% lower and the EU and Asian grinds were about 2% lower. Good production is reported for the main crop and traders are worried about the world economy moving forward and how that could affect demand. Supplies of Cocoa are large at ports. 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 higher today at 4.928 million bags.
Chart Trends: Trends in New York are mixed to down with objectives of 2470, 2460, and 2420 March. Support is at 2540, 2510, and 2490 March, with resistance at 2630, 2650, and 2670 March. Trends in London are mixed. Support is at 1990, 1950, and 1930 March, with resistance at 2050, 2080, and 2090 March.

Questions? Ask Jack Scoville today at 312-264-4322