Softs Report 04/21/2023

COTTON
General Comments: Cotton was sharply lower yesterday and May closed limit down as the weekly export sales report was very bad and as forecasts for rain are showing in forecasts for West Texas. The rains will not solve drought problems but at least producers in the region can get started on fieldwork and hope for better yields this year 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. Chinese CPI data was market positive this week.
Overnight News: The Delta will get widespread precipitation and near to below normal temperatures. The Southeast will see scattered showers and near to below normal temperatures. Texas will have mostly dry conditions and below normal temperatures. The USDA average price is now 77.38 ct/lb. ICE daily certified stocks are now 689 bales, from 1,045 bales yesterday.
Chart Trends: Trends in Cotton are down with objectives of 7770, 7710, and 7130 May. Support is at 77.90, 76.30, and 75.40 May, with resistance of 80.30, 82.00 and 82.70 May.

DJ On-Call Cotton – Apr 20
As of Apr 14. 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 5,860 11,085 -5,225 5,172 11,893 -6,721
Jul 23 27,754 24,615 3,139 13,402 8,206 5,196
Oct 23 0 0 0 0 0 0
Dec 23 17,487 17,026 461 22,384 22,143 241
Mar 24 2,570 2,392 178 1,373 1,367 6
May 24 1,391 1,374 17 0 0 0
Jul 24 931 902 29 484 484 0
Dec 24 3,027 3,038 -11 12,328 11,491 837
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 59,112 60,524 -1,412 55,143 55,584 -441
Open Open Change
Int Int
May 23 19,351 66,947 -47,596
Jul 23 80,994 55,730 25,264
Oct 23 19 19 0
Dec 23 55,644 52,315 3,329
Mar 24 8,262 6,996 1,266
May 24 2,874 2,695 179
Jul 24 921 1,046 -125
Dec 24 4,612 4,403 209
Mar 25 3 3 0
May 25 0 0 0
Jul 25 0 0 0
Total 172,680 190,154 -17,474

FCOJ
General Comments: FCOJ closed higher yesterday and a sideways trend continues. Futures remain supported by very short Oranges 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 269.00, 260.00, and 257.00 May, with resistance at 280.00, 287.00, and 293.00 May.

COFFEE
General Comments: New York closed lower and London closed a little lower yesterday and trends are sideways in both markets on ideas of increasing offers from producers on the rally on Tuesday. 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 even with the uptick in offers earlier in the week. The lack of offers from South America and Vietnam is still supporting prices and reports indicate that demand for Robusta from Vietnam is strong.
Overnight News: ICE certified stocks are lower today at 0.699 million bags. The ICO daily average price is now 181.56 ct/lb. Brazil will get mostl dry conditions with near to below normal temperatures. Central America will get mostly dry conditions. Vietnam will see isolated showers or dry conditions. ICE NY said that 2 notices were posted for delivery against May futures and that total deliveries for the month are now 256 contracts.
Chart Trends: Trends in New York are mixed. Support is at 191.00, 188.00, and 185.00 July, and resistance is at 198.00, 205.00 and 208.00 July. Trends in London are mixed. Support is at 2330, 2270, and 2240 July, and resistance is at 2400, 2430, and 2460 July.

SUGAR
General Comments: New York and London closed higher on tight supplies once again Trends are still up on the weekly charts and the daily charts as both market made new highs for the move and new contract highs. The production is not there to meet the demand in many countries, with only Brazil among the major producers looking to have a good crop. Indian production is thought to be less this year as mills are closing early there and Pakistan also has reduced production. Indian mills have produced 31.1 million tons of Sugar so far this marketing year, down 5.4% from last year. Thailand mills are also closing earlier than expected so the crop there might be less. Asian countries could face another year of short production as El Nino returns after years of La Nina. New crop Brazil production is solid this year but is still in the fields. Brazil old crop production has been better after mills ran out of cane to crush a year ago. CONAB said that Brazil produced 510.1 million tons of Sugarcane, from 598.3 million in its previous estimate and 578.8 million tons the previous year. Sugar production was 37 million tons from 36.4 million in its previous estimate and 34.9 million the previous year. Ethanol production was 26.5 billion liters, from 26.6 billion in the previous estimate and 25.4 billion last year. 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 mostly dry conditions. Temperatures should average near to below 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 2360, 2300, and 2220 July and resistance is at 2430, 2460, and 2490 July. Trends in London are mixed to up with objectives of 710.00 and 742.00 August. Support is at 672.00, 658.00, and 646.00 August and resistance is at 690.00, 695.00, and 701.00 August.

COCOA
General Comments: New York closed mixed and London closed a little lower yesterday. The lack of arrivals from West Africa to ports is still important and is supporting futures. 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. Midcrop production ideas are strong due to rain mixed with some sun recently reported in Cocoa areas of the country. It has turned drier in the last week and the drier weather is creating fears of a short crop again. 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
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 5.397 million bags. The Cocoa Association of Asia said that grindings for the quarter were up 4.09% from last year at 222,028 tons.
Chart Trends: Trends in New York are up with objectives of 3130. 3150, and 3250 May. Support is at 3040, 3010, and 2990 May, with resistance at 3100, 3130, and 3160 May. Trends in London are up with objectives of 2280 May. Support is at 2230, 2200, and 2170 May, with resistance at 2290, 2320, and 2350 May.

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