Softs Report 04/12/2023

COTTON
General Comments: Cotton was higher yesterday in reaction to the USDA supply and demand reports that showed smaller ending stocks. Cotton retains bullish fundamentals after the reports. The weekly export sales report was weaker last week but still featured buying from Vietnam and China. The prospective plantings report highlighted reduced planting ideas from producers. Ideas are that the world economic problems were fading into the background as the US stock market has rallied. Chart trends are sideways. Chinese buying should stay strong as the country improves economically as it opens up from the covid lockdowns.
Overnight News: The Delta will get scattered showers and storms and above normal temperatures. The Southeast will see scattered showers and above normal temperatures. Texas will have mostly dry conditions and above normal temperatures. The USDA average price is now 80.36 ct/lb. ICE daily certified stocks are now 1,485 bales, from 1,485 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 81.90, 80.30, and 79.80 May, with resistance of 84.00, 84.60 and 85.30 May.

U.S. Cotton Supply and Use 1/
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2020/21 2021/22 Est. 2022/23 Proj. 2022/23 Proj.
Item Mar Apr
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Million Acres
Planted 12.09 11.22 13.76 13.76
Harvested 8.22 10.27 7.44 7.44

Pounds
Yield per Harvested
Acre 853 819 947 947

Million 480 Pound Bales
Beginning Stocks 7.25 3.15 3.75 3.75
Production 14.61 17.52 14.68 14.68
Imports 0.00 0.01 0.01 0.01
Supply, Total 21.86 20.68 18.44 18.44
Domestic Use 2.40 2.55 2.10 2.10
Exports, Total 16.35 14.62 12.00 12.20
Use, Total 18.75 17.17 14.10 14.30
Unaccounted 2/ -0.04 -0.24 0.04 0.04
Ending Stocks 3.15 3.75 4.30 4.10
Avg. Farm Price 3/ 66.3 91.4 83.0 82.0
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WASDE – 635 – 18 April 2023

World Cotton Supply and Use 1/
(Million 480-Pound Bales)
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Supply Use
Region Beginning Produc- Loss Ending
Stocks tion Imports Domestic Exports 2/ Stocks
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2022/23 Proj.
World
Mar 86.11 115.09 39.58 110.11 39.60 -0.07 91.15
Apr 86.23 115.92 38.83 110.17 38.86 -0.07 92.01
World Less China
Mar 47.55 85.59 32.08 74.11 39.47 -0.07 51.71
Apr 47.66 85.42 31.58 73.67 38.74 -0.07 52.32
United States
Mar 3.75 14.68 0.01 2.10 12.00 0.04 4.30
Apr 3.75 14.68 0.01 2.10 12.20 0.04 4.10
Total Foreign
Mar 82.36 100.41 39.57 108.01 27.60 -0.11 86.85
Apr 82.48 101.24 38.83 108.07 26.66 -0.11 87.91
Major Exporters 4/
Mar 31.68 55.70 2.31 31.23 23.46 -0.17 35.16
Apr 31.78 55.36 2.28 31.16 22.54 -0.17 35.89
Major Importers 8/
Mar 48.00 41.43 34.94 72.70 2.86 0.07 48.75
Apr 48.00 42.50 34.16 72.76 2.85 0.07 48.98
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WASDE – 635 – 28 April 2023

FCOJ
General Comments: FCOJ closed higher yesterday in response to the USDA production reports for Oranges. Florida production was left unchanged at 16.1 million boxes, but the rest of the US saw decreased production by 2.0 % to 2.57 million tons. Trends remain mostly up in the market. Futures remain supported by very short Orange production estimates for Florida. Demand is thought to be backing away from FCOJ with prices as high as they are currently. But the market has not taken any note and continues to charge higher. 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.
Overnight News: Florida should get mostly dry conditions. Temperatures will average above normal. Brazil should get scattered showers and near normal temperatures.
Chart Trends: Trends in FCOJ are up with no objectives. Support is at 270.00, 260.00, and 257.00 May, with resistance at 287.00, 293.00, and 299.00 May.

Orange Production Down 2 Percent from March Forecast
The United States all orange forecast for the 2022-2023 season is
2.57 million tons, down 2 percent from the previous forecast and
down 25 percent from the 2021- 2022 revised utilization. The Florida all
orange forecast, at 16.1 million boxes (725,000 tons), is unchanged from the
previous forecast but down 61 percent from last season’s revised utilization.
In Florida, early, midseason, and Navel varieties are forecast at
6.10 million boxes (275,000 tons), unchanged from the previous forecast but
down 67 percent from last season’s revised utilization. The Florida Valencia
orange forecast, at 10.0 million boxes (450,000 tons), is unchanged from the
previous forecast but down 56 percent from last season’s revised utilization.
The California all orange forecast is 45.1 million boxes (1.80 million tons),
is down 2 percent from previous forecast but up 15 percent from last season’s
revised utilization. The California Navel orange forecast is
37.0 million boxes (1.48 million tons), down 3 percent from the previous
forecast but up 17 percent from last season’s revised utilization. The
California Valencia orange forecast is 8.10 million boxes (324,000 tons),
unchanged from the previous forecast but up 7 percent from last season’s
revised utilization. The Texas all orange forecast, at 1.05 million boxes
(45,000 tons) down 9 percent from the previous forecast but
up significantly from last season’s revised utilization.
This report was approved on April 11, 2023.

COFFEE
General Comments: New York and London closed sharply higher yesterday on ideas of little on offer from producers and reports of increasing demand. The Robusta market has been especially tight and has been pushing on the Arabica price, but Arabica supplies are growing tight in the market as well. Producers in Vietnam are said to have low stocks left to sell and producers in Colombia and Brazil are also reported to be short Coffee to sell. The lack of offers from South America and Vietnam is still supporting prices and reports indicate that demand for Robusta from Vietnam is strong and increasing due to cost differentials with Arabica. Differentials are now weakening in Brazil, Honduras, and Colombia, but reports indicate that differentials might start to firm up again as production ideas are low for Colombia and Brazil.
Overnight News: ICE certified stocks are slightly lower today at 0.729 million bags. The ICO daily average price is now 179.29 ct/lb. Brazil will get scattered showers with near to above normal temperatures. Central America will get mostly dry conditions. Vietnam will see isolated showers.
Chart Trends: Trends in New York are up with no objectives. Support is at 184.00, 180.00, and 177.00 May, and resistance is at 193.00, 197.00 and 200.00 May. Trends in London are up with no objectives. Support is at 2300, 2250, and 2210 May, and resistance is at 2420, 2450, and 2480 May.

SUGAR
General Comments: New York and London closed higher yesterday and made new highs for the move as the overall bull market held. Trends are up on the daily and the weekly charts. The production is not there to meet the demand. Indian production is thought to be less than 33 million tons this year as mills are closing early there and Pakistan also has reduced production. India has produced 30.0 million tons of Sugar so far this season, down 3.3% from last year. Thailand mills are also closing earlier than expected so the crop there might be less. New crop Brazil production is solid this year but is still in the fields. Brazil producers are currently active in the futures market placing hedges on the production. European production is expected to be reduced again this year. 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 up with no objectives. Support is at 2300, 2220, and 2180 July and resistance is at 2390, 2420, and 2450 July. Trends in London are up with no objectives. Support is at 662.00, 646.00, and 637.00 August and resistance is at 695.00, 701.00, and 707.00 August.

U.S. Sugar Supply and Use 1/
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2020/21 2021/22 Est. 2022/23 Proj. 2022/23 Proj.
Item Mar Apr
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1000 Short Tons, Raw Value
Beginning Stocks 1618 1705 1820 1820
Production 2/ 9233 9157 9310 9306
Beet Sugar 5092 5155 5160 5150
Cane Sugar 4141 4002 4150 4156
Florida 2090 1934 2040 2044
Louisiana 1918 1944 2034 2034
Texas 134 124 76 78
Imports 3221 3646 3330 3511
TRQ 3/ 1749 1579 1618 1730
Other Program 4/ 292 298 250 250
Non-program 1180 1769 1462 1531
Mexico 968 1379 1306 1306
High-tier tariff/other 212 390 156 225
Total Supply 14072 14508 14460 14637
Exports 49 29 35 35
Deliveries 12277 12578 12705 12705
Food 12161 12470 12600 12600
Other 5/ 116 107 105 105
Miscellaneous 40 81 0 0
Total Use 12367 12688 12740 12740
Ending Stocks 1705 1820 1720 1897
Stocks to Use Ratio 13.8 14.3 13.5 14.9
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Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/
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Supply Use
Fiscal Beginning Produc- Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
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1000 Metric Tons, Actual Weight

Sugar
2021/22 Est.
Mar 1053 6185 31 4629 1676 964
Apr 1053 6185 31 4629 1676 964
2022/23 Proj.
Mar 964 5485 35 4438 1121 925
Apr 964 5560 35 4499 1123 937
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WASDE – 635 – 17 April 2023

COCOA
General Comments: New York and London closed higher yesterday with the lack of arrivals from West Africa to ports being the key to price strength. Wire reports suggest that producer selling increased on the recent rally in these markets. Trends remain up for at least the short term. Talk is that hot and dry conditions reported earlier in Ivory Coast could curtail main crop production, and main crop production ideas are not strong. Mid crop production ideas are strong due to rains mixed with some sun recently reported in Cocoa areas of the country. Ghana has reported a disease in its Cocoa to hurt production potential there, but overall production expectations are high. The rest of West Africa appears to be in good condition. The weather is good in Southeast Asia. Ivory Coast Cocoa arrivals are now estimated at 1.779 million tons, down 4.8% from last year. Callebaut said yesterday that overall chocolate volume has fallen by 3.6% in the first six months with reductions in Europe and Americas outweighing a small increase in Asia.
Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near to above 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 5.378 million bags.
Chart Trends: Trends in New York are up with objectives of 3040 and 3150 May. Support is at 2930, 2850, and 2820 May, with resistance at 2990, 3020, and 3050 May. Trends in London are up with objectives of 2220 May. Support is at 2170, 2150, and 2100 May, with resistance at 2200, 2230, and 2260 May.

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