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 04/27/2023
General Comments: Cotton was lower again yesterday on what appeared to be new speculative selling. Demand ideas are bad as the weekly export sales report was very bad last week 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. Ideas are that the world economic problems were fading into the background as the US stock market has rallied. Chart trends are sideways or down. 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 scattered showers and near to below normal temperatures. The Southeast will see scattered showers and near to below normal temperatures. Texas will have scattered showers and below normal temperatures. The USDA average price is now 75.65 ct/lb. ICE daily certified stocks are now 75 bales, from 75 bales yesterday. ICE said that 0 notices were posted for May delivery and that total deliveries for the month are now 0 contracts. USDA said that weekly net Upland Cotton export sales were 194,900 bales this year and 19,100 bales next year. Net Pima sales were 16,700 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are down with no objectives. Support is at 77.70, 77.20, and 77.00 July, with resistance of 79.70, 80.10 and 81.80 July.
General Comments: FCOJ closed sharply lower to limit down yesterday on what appeared to be speculative long liquidation combined with new commercial selling. 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 276.00, 269.00, and 260.00 May, with resistance at 288.00, 292.00, and 299.00 May.
General Comments: New York closed higher and London closed lower yesterday on what appeared to be speculative trading on both sides of the market. Trends are sideways in New York and sideways to up in London on the daily charts. The Brazil harvest f Robusta is in full swing and promising to help relieve tight supplies in that market. 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 almost nothing 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.
Overnight News: ICE certified stocks are unchanged today at 0.698 million bags. The ICO daily average price is now 18-.-6 ct/lb. Brazil will get mostly 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 0 notices were posted for delivery against May futures and that total deliveries for the month are now 296 contracts.
Chart Trends: Trends in New York are mixed. Support is at 187.00, 185.00, and 182.00 July, and resistance is at 196.00, 198.00 and 205.00 July. Trends in London are mixed to up with objectives of 2520 July. Support is at 2380, 2330, and 2270 July, and resistance is at 2490, 2520, and 2550 July.
General Comments: New York and London closed lower yesterday with the market supported by tight supplies once again, but hurt by overbought conditions on the charts 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. 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. European production is expected to be reduced again this year. 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 objectives of 2690 July. Support is at 2500, 2410, and 2360 July and resistance is at 2660, 2690, and 2720 July. Trends in London are up with objectives of 742.00 August. Support is at 675.00, 672.00, and 658.00 August and resistance is at 712.00, 716.00, and 719.00 August.
DJ Brazil Center-South Sugar Crush Up 157% in 1H April
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the first half of April compared with a year earlier, according to industry group Unica.
The figures were the first for the 2023-2024 production season, which began on April 1.
Center-south mills crushed 13.6 million metric tons of cane in the period, an increase of 157% from the same period a year earlier, Unica said Thursday. They produced 541,900 tons of sugar, up 313%, and made 768 million liters of ethanol, an increase of 95%.
The production mix for the first half of April was 38.6% sugar to 61.4% ethanol, compared with 26.4% sugar and 73.6% ethanol in the same period a year ago.
Brazil’s center-south region produces about 90% of Brazil’s sugar cane, with most of the rest coming from the country’s northern northeastern states. Brazilian crop agency Conab forecast Wednesday that Brazil’s total sugarcane production will rise in the 2023-2024 season because of an increase in the area planted with cane and greater productivity.
DJ Brazil Forecasts 2023-2024 Sugarcane Output of 637.1M Tons
By Jeffrey T. Lewis
SÃO PAULO–Brazil’s sugarcane and sugar production will increase in the 2023-2024 growing season amid an increase in the area planted with cane and the expectation of greater productivity, Brazilian crop agency Conab said Wednesday.
The country’s farmers will grow 637.1 million metric tons of sugarcane, the raw material used by Brazilian sugar mills to produce the sweetener and most of Brazil’s ethanol, Conab said in its first report for the season on sugar cane, sugar and ethanol production. In the 2022-2023 growing season Brazil grew 610.1 million tons of cane.
Sugar production will reach 38.8 million tons and the country’s mills will produce a total of 33.2 billion liters of ethanol in the current season, using sugar and corn as a raw material, Conab said.
Brazilian farmers replanted more of the cane-growing area before the start of the current season, which will boost productivity, Conab said. Cane plants regrow and can be harvested for more than one year, but the first harvest of new cane plants produces more than in later years.
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General Comments: New York and London closed higher yesterday on ideas of tight supplies based on more reports of reduced arrivals in Ivory Coast. Ivory Coast arrivals are now 1.859 million tons, down 7.4% from last year. The lack of arrivals from West Africa to ports is still important and is supporting futures. Trends remain mixed to 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. 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 5.430 million bags. ICE NY said that 0 notices were posted for delivery against May futures and that total deliveries for the month are now 930 contracts.
Chart Trends: Trends in New York are mixed. Support is at 2890, 2850, and 2810 July, with resistance at 2950, 3010, and 3040 July. Trends in London are down with objectives of 2170 July. Support is at 2200, 2170, and 2150 July, with resistance at 2250, 2290, and 2320 July.