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 03/06/2023
General Comments: Cotton was lower last week on a weaker export sales report from USDA. Demand was very strong in the report the previous week and has been ramping up for the last couple of months, but fell off. 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 have been delayed but these effects are being felt as the people there achieve immunity. 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 isolated showers and above normal temperatures. The Southeast will see isolated showers and above normal temperatures. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 81.71 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 83.10, 82.90, and 82.40 May, with resistance of 85.00, 85.70 and 86.90 May.
2022-23: Avg Low High Feb. Avg vs Prior
US Production 14.66 14.50 14.85 14.68 -0.021
US Exports 12.05 11.80 12.30 12.00 0.050
US End Stocks 4.26 4.05 4.50 4.30 -0.039
World Production 114.22 113.50 114.80 114.37 -0.149
World Consumption 110.54 110.00 111.00 110.66 -0.117
World End Stocks 89.07 88.37 90.00 89.08 -0.013
Analyst Estimates: US Production US Exports US Ending Stocks World Production World Consumption World Ending Stocks
Cottonexperts.com 14.50 11.80 4.30 113.50 110.00 90.00
Doane 14.85 12.00 4.50 114.50 110.20 89.50
Higby Barrett 14.68 12.25 4.05 114.00 111.00 88.37
Love Consulting 14.68 12.00 4.30 114.00 110.50 88.50
Price Futures Group 14.70 12.00 4.50 114.00 110.60 89.00
Varner Bros. 14.60 12.30 4.08 114.75 111.00 89.10
Wedbush Securities 14.60 12.00 4.10 114.80 110.50 89.00
General Comments: FCOJ was sharply higher last week but near the lows of the week after a wild week of trading. Production remains the overriding force. 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 40.0% below last year.
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 234.00, 236.00, and 240.00 May.
General Comments: New York closed lower on improved rains for Brazil growing areas and London closed higher 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 to dropping there. Central America differentials remain firm with not much 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 0.774 million bags. The ICO daily average price is now 172.26 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 175.00 May. Support is at 177.00, 176.00, and 174.00 May, and resistance is at 181.00, 185.00 and 190.00 May. Trends in London are mixed to up with objectives of 3300 and 3360 May. Support is at 2140, 2110, and 2090 May, and resistance is at 2190, 2210, and 2240 May.
General Comments: New York closed lower and London closed higher last week and both markets turned the chart trends to up on Friday. 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. Even so, Indian mills have produced 28.5 million tons of Sugaer, up 1.8% from last year, according to the Indian Mills Association. 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 up with objectives of 2160 and 2270 May. Support is at 2060, 3040, and 3010 May and resistance is at 2110, 2140, and 2170 May. Trends in London are up with objectives of 601.00 May. Support is at 574.00, 566.00, and 561.00 May and resistance is at 591.00, 597.00, and 603.00 May.
COCOAQuestions? Ask Jack Scoville today at 312-264-4322
General Comments: New York and London closed a little higher last week 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: 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 5.066 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. Support is at 2730, 2700, and 2660 May, with resistance at 2810, 2840, and 2900 May. Trends in London are mixed. Support is at 2100, 2060, and 2020 May, with resistance at 2170, 2200, and 2230 May.