Softs Report 03/10/2023

COTTON
General Comments: Cotton was lower yesterday on follow through selling tied to the WASDE reports and on disappointing weekly export sales. The reports were negative to prices as USDA left US demand alone and raised world ending stocks. Demand ideas are improving. 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 weeks. 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 but are still ion a range.
Overnight News: The Delta will get scattered showers and above normal temperatures. The Southeast will see isolated to scattered showers and above normal temperatures. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 79.79 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 to down with objectives of 87.70, 87.60, and 71.70 May. Support is at 80.90, 80.50, and 80.10 May, with resistance of 83.70, 85.40 and 86.20 May.

DJ On-Call Cotton – Mar 9
As of Mar 3. 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 0 762 -762 0 762 -762
May 23 23,585 23,919 -334 16,873 16,707 166
Jul 23 24,472 23,443 1,029 4,558 4,284 274
Oct 23 0 0 0 0 0 0
Dec 23 12,462 11,908 554 21,317 21,449 -132
Mar 24 1,980 1,951 29 1,294 1,294 0
May 24 830 623 207 0 0 0
Jul 24 803 750 53 550 660 -110
Dec 24 2,662 2,662 0 7,301 5,802 1,499
Mar 25 40 40 0 0 0 0
May 25 26 26 0 0 0 0
Jul 25 26 26 0 0 0 0
May 26 0 0 0 0 0 0
Total 66,886 66,110 776 51,893 50,958 935
Open Open Change
Int Int
Mar 23 6 10 -4
May 23 92,479 94,982 -2,503
Jul 23 45,857 47,084 -1,227
Oct 23 16 15 1
Dec 23 38,228 35,595 2,633
Mar 24 3,932 4,396 -464
May 24 710 684 26
Jul 24 296 262 34
Dec 24 2,690 2,467 223
Mar 25 2 5 -3
May 25 0 0 0
Jul 25 0 0 0
May 26 0 0 0
Total 184,216 185,500 -1,284

FCOJ
General Comments: FCOJ was higher yesterday in recovery trading. The market tone is mixed as USDA slightly raised Florida Oranges production estimates. The crop is still very short but the size of the crop could be factored into the price now. 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 scattered 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 March futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 240.00, 219.00, and 217.00 May, with resistance at 240.00, 244.00, and 246.00 May.

DJ Retail Orange Juice Prices Hit Another New High — Market Talk
1008 ET – Prices per gallon of orange juice have found a new high, Nielsen says in a report — the fifth consecutive report that retail prices for OJ have found a new high, dating back to 2001. At $8.85 a gallon, the price is 14% higher than it was at this time last year. Orange juice retail and futures prices have been plotting record highs in recent months, in large part a reaction to the damage done to Florida’s orange crop. This week, the USDA reported that orange production is projected at 16.1 million boxes in the 2022/23 marketing year — slightly higher than last month’s projection, but still down over 60% from this time last year. After finding an all-time high of $2.63 a pound last month, FCOJ futures have retreated, with the most-active contract on the ICE trading up 0.1% to $2.391 a pound today. (kirk.maltais@wsj.com; @kirkmaltais)

COFFEE
General Comments: New York closed lower and London closed higher again yesterday. Differentials are now weakening in Brazil, Honduras, and Colombia as the rally has increased offers. 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 higher today at 0.771 million bags. The ICO daily average price is now 170.11 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 4 contracts were tendered for delivery against March futures and that total deliveries for the month are now 624 contracts.
Chart Trends: Trends in New York are mixed. Support is at 174.00, 171.00, and 170.00 May, and resistance is at 178.00, 183.00 and 185.00 May. Trends in London are mixed to up with objectives of 3300 and 3360 May. Support is at 2160, 2130, and 2110 May, and resistance is at 2210, 2240, and 2270 May.

DJ Brazil Coffee Exports Fell 33.3% in February to 2.4M Bags, Cecafe Says
By Jeffrey T. Lewis
SÃO PAULO–Brazilian coffee exports fell in February as stocks dwindled ahead of the start of the 2023 harvest, according to exporters group Cecafe.
The South American country exported 2.4 million 132-pound bags of coffee last month, a drop of 33.3% from the same month a year earlier, Cecafe said Thursday. Sales abroad of the arabica variety of coffee fell 35.5%, to 2 million bags, while exports of robusta beans declined 42.1%, to 83,361 bags.
Exports of ground, roast and soluble coffee fell 5.3%, to 285,012 bags, Cecafe said.
Brazil had two smaller-than-normal harvests in a row in 2021 and 2022, leaving growers and cooperatives with less held in reserve to meet demand before the start of the 2023 harvest in April, Cecafe said.
“The further away from a big harvest, like in 2020, which was a record, the less remaining coffee we have, impacting the supply,” said Cecafe President Márcio Ferreira. Higher prices and favorable exchange rates late last year also encouraged many growers to sell the stocks they still had, he added.

SUGAR
General Comments: New York and London closed a little lower on wsome speculative profit taking as Indian production remains a concern. Indian production is thought to be 33 million tons this year or less and the market has had to ration that supply via price. Thailand mills are closing earlier than expected so the crop there might be over rated and Brazil production is solid this 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. European production is expected to be reduced again this year, with French planted area likely to decline to a 14 year low for Sugarbeets. Some analysts now say that Chinese production could be the lowest in six years.
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 2160 and 2270 May. Support is at 2060, 2040, and 2010 May and resistance is at 2140, 2170, and 2200 May. Trends in London are mixed to up with objectives of 601.00 May. Support is at 574.00, 566.00, and 561.00 May and resistance is at 603.00, 609.00, and 615.00 May.

DJ Brazil Center-South Mills Crushed Less Cane in 2H February
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed less cane in the second half of February compared with a year earlier, according to industry group Unica.
Center-south mills crushed 72,000 metric tons of cane in the period, down 55% from the same period a year earlier, Unica said Friday. The mills produced 381 tons of sugar and 154.7 million liters of ethanol in the period.
The production mix for the second half of February was 4.8% sugar to 95.2% ethanol, compared with 100% ethanol in the same period a year ago.
In the period from April 1 through Feb. 28, mills in the region crushed 542.5 million tons of cane, up 3.8% from the same period a year earlier. Sugar production rose 4.5% to 33.5 million tons, and ethanol output climbed 3.7% to 28.2 billion liters.
The production mix for the season through Feb. 28 was 45.9% sugar to 54.1% ethanol, compared with 45% sugar and 55% ethanol in the same period a year earlier.

COCOA
General Comments: New York and London closed lower as West African exporters are not offering. 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. Those ideas changed a little over the weekend due to heavy rains reported in Cocoa areas of the country. 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 Ivory Coast Cocoa grind was 58,452 tons, 16% higher than last 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 slightly lower today at 5.053 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 down with objectives of 2620 and 2500 May. Support is at 2700, 2660, and 2630 May, with resistance at 2790, 2810, and 2840 May. Trends in London are mixed. Support is at 2100, 2060, and 2020 May, with resistance at 2150, 2170, and 2200 May.

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