Softs Report 03/03/2023

DJ Food Prices Fell for Eleventh Month But Hunger Persists in Many Countries, FAO Says
By Will Horner
A long-running decline in global food prices continued for an eleventh consecutive month in February, though the rate of decline appeared to be easing, as grains prices remain locked at historically elevated levels and many countries continue to experience debilitating levels of hunger and soaring local food prices, according to data from FAO.
The United Nations’ Food and Agriculture Organization’s Food Price Index inched down 0.6% last month to 129.8. The closely watched barometer of global food prices registered declines in the price of vegetable oils and dairy products while grain and meat prices remained flat and sugar prices jumped, the FAO said Friday.
The figures are the latest evidence that the most acute effects of the food supply crisis sparked by the now yearlong war in Ukraine are easing. The FAO’s index spiked at a record level following Russia’s invasion as Ukraine’s large grain supplies were halted, but prices of staple foods have now fallen almost 19% from their peak, the FAO said.
Still, the FAO warned that the declines weren’t alleviating the risk of severe hunger in many of the poorest nations. Declines in global prices weren’t translating into lower local food prices in some countries while drought and war continued to deepen food insecurity in others. 45 nations across the world need external help in sourcing adequate food, the FAO said in a separate report also released Friday.
Six countries are experiencing the most acute level of food insecurity, defined as catastrophic hunger, the FAO said. Those countries are Burkina Faso, Haiti, Mali, Nigeria, Somalia and South Sudan.
Grain prices were particularly impacted by the conflict, thanks to Ukraine’s key pre-war role as a major supplier of wheat, corn and other crops. Global grain prices have come down significantly from the highs they hit in the months after Russia’s invasion but have stabilized at historically elevated levels.
The FAO’s index of cereal prices was unchanged last month, while wheat prices rose slightly due to fresh concerns about supplies from Ukraine and dry weather conditions in the U.S. crimped crop expectations.
While global prices for grain, a staple food source, have come down significantly in recent months, local prices in many countries remain at exorbitant levels. Coarse grain prices in Ghana were 150% higher than last year, while grain prices in Malawi and Zambia are at record levels, the FAO said.
Other staple foods such as dairy products and vegetable oils fell in February. The FAO’s vegetable oil prices index declined 3.2% thanks to falls for palm, soy and sunflowerseed oil prices. Dairy prices declined 2.7%.
Sugar prices, however, surged 6.9% to a six-year high due to a weaker-than-expected crop in India.
Meat prices were unchanged the FAO said. Poultry prices weakened despite outbreaks of bird flu. Pig meat prices rose.

COTTON
General Comments: Cotton was lower yesterday on a weaker export sales report from USDA. Demand was very strong in the report last week and has been ramping up for the last couple of months, but fell off yesterday. 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 81.25 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.
Chart Trends: Trends in Cotton are mixed. Support is at 82.90, 82.40, and 80.90 May, with resistance of 85.00, 85.70 and 86.90 May.

DJ On-Call Cotton – Mar 2
As of Feb 24. On-call positions represent spot cotton sold to or
purchased from a merchant, based on New York cotton futures contracts
of 500-pound bales. Prices are not yet fixed against these contracts.
Source: CFTC
*-denotes changes from the previous week are based on revised data from
last week.
Call Previous Change Call Previous Change
Sales Purchases
Mar 23 762 3,090 -2,328 762 2,487 -1,725
May 23 23,919 22,371 1,548 16,707 16,146 561
Jul 23 23,443 22,393 1,050 4,284 3,736 548
Oct 23 0 0 0 0 0 0
Dec 23 11,908 11,314 594 21,449 21,305 144
Mar 24 1,951 1,812 139 1,294 1,294 0
May 24 623 623 0 0 0 0
Jul 24 750 698 52 660 660 0
Dec 24 2,662 2,728 -66 5,802 5,789 13
Mar 25 40 0 40 0 0 0
May 25 26 0 26 0 0 0
Jul 25 26 0 26 0 0 0
May 26 0 0 0 0 0 0
Total 66,110 65,029 1,081 50,958 51,417 -459
Open Open Change
Int Int
Mar 23 10 3,174 -3,164
May 23 94,982 95,990 -1,008
Jul 23 47,084 46,232 852
Oct 23 15 18 -3
Dec 23 35,595 34,779 816
Mar 24 4,396 4,579 -183
May 24 684 679 5
Jul 24 262 270 -8
Dec 24 2,467 2,381 86
Mar 25 5 5 0
May 25 0 0 0
Jul 25 0 0 0
May 26 0 0 0
Total 185,500 188,107 -2,607

FCOJ
General Comments: FCOJ was sharply lower 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 down with no objectives. Support is at 219.00, 217.00, and 215.00 May, with resistance at 228.00, 231.00, and 237.00 May.

DJ Florida FCOJ Movement and Pack – Mar 3
Florida FCOJ Movement And Pack
In mm ps, (million pounds solid). Source: Florida Department of Citrus (FDOC)
WEEK ENDING:
2/4/2023 Corresponding
Current Week Last
Week Season
2/4/2023 2/5/2022 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 96.47 165.96 -41.9%
Retail/Institutional 5.93 6.44 -7.9%
Total 102.39 172.40 -40.6%
Pack
Bulk 0.71 1.74 -59.2%
Retail/Institutional 1.41 1.24 14.0%
Total Pack 2.12 2.97 -28.7%
Reprocessed -2.10 -2.72 -22.8%
Pack from Fruit 0.02 0.25 -91.9%
Receipts & Losses
Net Gain or Loss 0.01 -0.19 -92.9%
Imports – Foreign 4.26 2.70 58.0%
Domestic Receipts 0.28 0.06 344.7%
Receipts of Florida Product
from Non-Reporting Entit 0.35 0.32 8.9%
Chilled OJ used in FCOJ 0.00 0.00 NC
Reprocessed FCTJ 0.00 0.10 -100.0%
Total Carry Over, Receipt & Pack
Bulk 99.98 167.97 -40.5%
Retail/Institutional 7.34 7.67 -4.4%
Total 107.32 175.64 -38.9%
MOVEMENT
Bulk
Domestic 4.59 4.55 1.0%
Exports 0.03 0.39 -93.5%
Total (Bulk) 4.62 4.94 -6.5%
Retail/Institutional
Domestic 0.82 0.95 -13.5%
Exports 0.00 0.00 NC
Total (Retail/Inst) 0.82 0.95 -13.5%
Total Movement 5.44 5.89 -7.6%
ENDING INVENTORY
Bulk 95.36 163.03 -41.5%
Retail/Institutional 6.51 6.72 -3.1%
Ending Inventory 101.87 169.75 -40.0%
Total Same
Total Season Period Last
To Date Season
4-Feb-23 5-Feb-22 % Change
CARRY OVER, RECEIPT & PACK
Carry Over
Bulk 119.13 226.65 -47.4%
Retail/Institutional 6.60 6.08 8.6%
Total 125.74 232.73 -46.0%
Pack
Bulk 13.51 30.57 -55.8%
Retail/Institutional 20.16 20.98 -3.9%
Total Pack 33.67 51.55 -34.7%
Reprocessed -32.30 -43.28 -25.4%
Pack from Fruit 1.37 8.27 -83.4%
Receipts & Losses
Net Gain or Loss 0.03 -0.34 -91.0%
Imports – Foreign 64.99 28.35 129.2%
Domestic Receipts 3.23 2.18 48.4%
Receipts of Florida Produ
from Non-Reporting Entit 3.16 0.85 273.4%
Chilled OJ used in FCOJ 0.10 0.02 377.8%
Reprocessed FCTJ 0.23 1.43 -83.9%
Total Carry Over, Receipt & Pack
Bulk 172.09 246.44 -30.2%
Retail/Institutional 26.76 27.06 -1.1%
Total 198.85 273.49 -27.3%
MOVEMENT
Bulk 75.73 76.40 -0.9%
Domestic 0.99 7.00 -85.8%
Exports 76.73 83.40 -8.0%
Total (Bulk)
Retail/Institutional
Domestic 20.25 20.34 -0.4%
Exports 0.00 0.00 NC
Total (Retail/Inst) 20.25 20.34 -0.4%
Total Movement 96.97 103.74 -6.5%
ENDING INVENTORY
Bulk 95.36 163.03 -41.5%
Retail/Institutional 6.51 6.72 -3.1%
Ending Inventory 101.87 169.75 -40.0%

COFFEE
General Comments: New York closed lower again 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, but differentials are reported toe dropping there. Central America differentials remain firm with no real demand showing.. 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 0.786 million bags. The ICO daily average price is now 175.08 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 620 contracts.
Chart Trends: Trends in New York are mixed to down with objectives of 180.00 and 175.00 May. Support is at 180.00, 177.00, and 175.00 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.

SUGAR
General Comments: New York and London closed lower yesterday and both markets are back in a trading range. 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. Mills in Maharashtra have closed already due to the lack of cane to crush. Mills in the state are usually open for a couple more months. 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 580.00, 582.00, and 588.00 May.

COCOA
General Comments: New York and London closed lower yesterday, as West African exporters are not offering. Futures gave back all of the rally from yesterday. 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 5.080 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 mixed to up with objectives of 2860, 2880, and 2960 May. Support is at 2780, 2730, and 2700 May, with resistance at 2840, 2870, and 2900 May. Trends in London are mixed to up with no objectives. Support is at 2130, 2100, and 2060 May, with resistance at 2170, 2200, and 2230 May.

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