Softs Report 04/14/2023

COTTON
General Comments: Cotton was a little higher yesterday and the market acts firm. The USDA supply and demand reports that showed smaller ending stocks. Cotton retains bullish fundamentals after the reports. The weekly export sales report was just OK last week and featured light buying from many Asian couutries. 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 80.96 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.

DJ On-Call Cotton – Apr 13
As of Apr 7. 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
May 23 11,085 14,350 -3,265 11,893 15,112 -3,219
Jul 23 24,615 22,904 1,711 8,206 5,973 2,233
Oct 23 0 0 0 0 0 0
Dec 23 17,026 15,403 1,623 22,143 21,764 379
Mar 24 2,392 2,324 68 1,367 1,413 -46
May 24 1,374 1,293 81 0 0 0
Jul 24 902 836 66 484 484 0
Dec 24 3,038 3,012 26 11,491 11,014 477
Mar 25 40 40 0 0 0 0
May 25 26 26 0 0 0 0
Jul 25 26 26 0 0 0 0
Total 60,524 60,214 310 55,584 55,760 -176
Open Open Change
Int Int
May 23 66,947 81,338 -14,391
Jul 23 55,730 52,544 3,186
Oct 23 19 18 1
Dec 23 52,315 51,908 407
Mar 24 6,996 5,384 1,612
May 24 2,695 1,937 758
Jul 24 1,046 460 586
Dec 24 4,403 4,151 252
Mar 25 3 3 0
May 25 0 0 0
Jul 25 0 0 0
Total 190,154 197,743 -7,589

FCOJ
General Comments: FCOJ closed higher yesterday with the USDA reports released on Tuesday sill supporting prices overall. 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 mixed. Support is at 270.00, 260.00, and 257.00 May, with resistance at 287.00, 293.00, and 299.00 May.

COFFEE
General Comments: New York and London closed higher yesterday and at new highs for the move on ideas of little on offer from producers and reports of increasing demand. Support also came as the Real is stronger against the US Dollar. CECAFE said that Brazil March exports were 19% les than a yea ago at 3.1 million bags. 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 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 lower today at 0.710 million bags. The ICO daily average price is now 183.83 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 194.00, 191.00, and 184.00 May, and resistance is at 200.00, 203.00 and 206.00 May. Trends in London are up with no objectives. Support is at 2380, 2300, and 2250 May, and resistance is at 2480, 2510, and 2540 May.

SUGAR
General Comments: New York closed mixed to a little higher and London closed mixed yesterday in what seemed to be consolidation trading. Trends are still up on the weekly charts and are mostly up on the daily 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. Old crop production has been good after mills ran out of cane to crush a year ago. 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 mixed to up with no objectives. Support is at 2300, 2220, and 2180 July and resistance is at 2400, 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 690.00, 695.00, and 701.00 August.

DJ Brazil Center-South Sugar Crush Up 271% in Second Half of March
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the second half of March compared with a year earlier, according to industry group Unica.
Center-south mills crushed 4.4 million metric tons of cane in the period, an increase of 271% from the same period a year earlier, Unica said Wednesday. They produced 145,710 tons of sugar, up from 12,000 a year earlier, and made 377 million liters of ethanol, an increase of 77%.
The production mix for the second half of March was 33.4% sugar to 66.6% ethanol, compared with 11% sugar and 89% ethanol in the same period a year ago.
The amount of cane available for crushing dwindles towards the end of the production season, which starts on April 1 and ends on March 31 of the following year. With smaller amounts of raw material being processed, the percentage change from one year to the next can be huge because the total amounts produced are small.
In the full season, from April 1 through March 31, mills in the region crushed 548.3 million tons of cane, up 4.6% from the same period a year earlier. Sugar production rose 5.2% to 33.7 million tons, and ethanol output climbed 4.7% to 28.9 billion liters.
The production mix for the season through March 31 was 45.85% sugar to 54.15% ethanol, compared with 44.95% sugar and 55.05% ethanol in the same period a year earlier.

COCOA
General Comments: New York and London closed higher yesterday in range trading as the lack of arrivals from West Africa to ports is still important to the trade. 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 5.386 million bags.
Chart Trends: Trends in New York are up with objectives of 3040 and 3150 May. Support is at 2850, 2830, and 2780 May, with resistance at 3000, 3020, and 3050 May. Trends in London are mixed to up with objectives of 2220 May. Support is at 2150, 2100, and 2070 May, with resistance at 2200, 2230, and 2260 May.

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