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 03/02/2023
General Comments: Cotton was higher yesterday on a weaker US Dollar and news of stronger economic data from China. The Chinese PMI rose more than expected and this was considered a positive sign for increased demand. Demand was very strong in the report last week and has been ramping up for the last couple of months. Some ideas that demand could soon increase more 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. China has also started buying again from Australia after refusing imports from that country for political reasons. The charts show that futures held at a test of the lows formed since November and that prices could start to move higher to the top end of the range at about 90 cents in the next few weeks.
Overnight News: The Delta will get mostly dry conditions and above normal temperatures. The Southeast will see mostly dry conditions and near to above normal temperatures. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 83.45 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 contracts and that total deliveries for the month are now 0 contracts. USDA said that week;y net Upland Cotton export sales were 170,600 bales this year and 97,200 bales net year. Net Pima sales were 1,200 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are mixed to up with objectives of 8770 and 9140 May. Support is at 82.90, 82.40, and 80.90 May, with resistance of 85.00, 85.70 and 86.90 May.
General Comments: FCOJ was limit down yesterday on speculative long liquidation, but production remains the overriding force. The charts show that May is now moving lower from contract highs, and new all time highs. 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. 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. ICE NY said that 0 notices were posted for delivery against March futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are up with no objectives. Support is at 249.00, 239.00, and 235.00 May, with resistance at 261.00, 267.00, and 273.00 May.
General Comments: New York closed lower and London closed higher yesterday on price action tied to higher differentials in Brazil and Vietnam caused by a lack of offers from producers in both countries. There is also a lack of offer from Colombia. Vietnam exported 323,000 tons of Coffee in the first two months of the calendar year this year, down 13.1% from last year. It seems that the market has decided that prices have captured the lack of offer in the cash market for now. 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 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 slightly lower today at 0.787 million bags. The ICO daily average price is now 175.93 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 2 contracts were tendered for delivery against March futures and that total deliveries for the month are now 620 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 180.00 and 175.00 May. Support is at 177.00, 175.00, and 174.00 May, and resistance is at 185.00, 190.00 and 194.00 May. Trends in London are mixed to up with objectives of 3300 and 3360 May. Support is at 2110, 2090, and 2070 May, and resistance is at 2210, 2240, and 22670 May.
General Comments: New York and London closed higher yesterday and New York ran to new highs for the move. Brazil production is set to recover this year with production estimated by Datagro at 38 million tons in Center-South areas. Raizen SA, an energy producer, said that millers will produce 48% Sugar and the rest Ethanol this year. The trade had estimated the Sugar share at 46%. Indian production is thought to be 33 million tons this year or less and the market has had to ration that supply via price. A local source told the wire services yesterday that India could still export 1.0 million tons more of Sugar if production rises to the upper end of trade expectations, otherwise India is about out of Sugar available for export. 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, with French planted area likely to decline to a 14 year low for Sugarbeets.
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 2080, 2160, and 2270 May. Support is at 2010, 1990, and 1960 May and resistance is at 2080, 2110, and 2140 May. Trends in London are mixed. Support is at 561.00, 557.00, and 549.00 May and resistance is at 578.00, 582.00, and 588.00 May.
COCOAQuestions? Ask Jack Scoville today at 312-264-4322
General Comments: New York and London closed higher yesterday, 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. The Council has also restricted some of the big buyers like Cargill and Callebrut from buying more as they have reached volume limits on purchases. Wire reports said that a lot of Ivory Coast Cocoa is getting smuggled to other countries for export due to higher prices being paid. Trends are 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. The ICCO said yesterday that it expects a production deficit of 60,000 tons this marketing year.
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 5.082 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 615 contracts.
Chart Trends: Trends in New York are up with objectives of 2860, 2880, and 2960 May. Support is at 2810, 2780, and 2730 May, with resistance at 2870, 2900, and 2930 May. Trends in London are mixed to up with no objectives. Support is at 2130, 2100, and 2060 May, with resistance at 2200, 2230, and 2260 May.