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 03/15/2023
MORNING SOFTS COMMENTS
General Comments: Cotton was higher again yesterday, and trends are now mixed after breaking on Friday in a convincing way from a sideways trading pattern established last November. Futures are now at the lower end of the previous trading range and are through some resistance areas. The WASDE 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.
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 78.98 ct/lb. ICE said that certified stocks are now 1,661 bales, from 1,661 bales yesterday. ICE NY said that 0 notices were posted for delivery against March contracts and that total deliveries for the month are now 5 contracts.
Chart Trends: Trends in Cotton are mixed to down with objectives of 77.70, 77.60, and 71.70 May. Support is at 80.50, 78.80, and 78.00 May, with resistance of 83.70, 84.40 and 86.20 May.
General Comments: FCOJ was sharply higher yesterday but remains supported overall by very short Orange production estimates for Florida. The market tone is mixed as USDA slightly raised Florida Oranges production estimates to 16.1 million boxes from 16.0 million in its previous estimate and more than 60% below the production from last year. 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 38.5% below last year. Nielsen said that Orange Juice retail prices hit a new high in the US. This is the fifth consecutive month of new highs reported and the highest price reported since at least 2001. The current price is now 8.85/gallon, up 14% from 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 234.00, 230.00, and 227.00 May, with resistance at 246.00, 250.00, and 253.00 May.
General Comments: New York and London closed lower yesterday. Differentials are now weakening in Brazil, Honduras, and Colombia as the recent 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 0.785 million bags. The ICO daily average price is now 167.97 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 1 contract was tendered for delivery against March futures and that total deliveries for the month are now 638 contracts.
Chart Trends: Trends in New York are mixed. Support is at 174.00, 171.00, and 170.00 May, and resistance is at 183.00, 185.00 and 190.00 May. Trends in London are down with objectives of 2080 and 1990 May. Support is at 2070, 2020, and 2000 May, and resistance is at 2120, 2160, and 2190 May.
General Comments: New York and London closed lower, and the markets held once again to a sideways trend. 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 overrated and Brazil production is solid this year. Reports from private analysts suggest that Brazil can have a 13% increase in center-south production. 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 due to bad growing conditions.
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. Support is at 2060, 2040, and 2010 May and resistance is at 2130, 2160, and 2190 May. Trends in London are mixed. Support is at 574.00, 566.00, and 561.00 May and resistance is at 595.00, 603.00, and 609.00 May.
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General Comments: New York and London closed higher. Trends remain down 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 previous 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.
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 higher today at 5.072 million bags. ICE NY said that there were 1 notice was posted for delivery against March contracts and that total deliveries for the month are now 621 contracts.
Chart Trends: Trends in New York are down with objectives of 2620 and 2500 May. Support is at 2620, 2580, and 2550 May, with resistance at 2700, 2740, and 2790 May. Trends in London are down with objectives of 2010 and 1940 May. Support is at 2030, 2000, and 1980 May, with resistance at 2080, 2110, and 2130 May.