Softs Report 04/28/2023

COTTON
General Comments: Cotton was higher yesterday on what appeared to be speculative short covering and some commercial buying. The US stock market was higher yesterday on ideas of a solid economy. 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 77.68 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 mixed. Support is at 78.10, 77.70, and 77.20 July, with resistance of 81.80, 82.10 and 82.70 July.

DJ On-Call Cotton – Apr 27
As of Apr 21. 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 23 433 5,860 -5,427 464 5,172 -4,708
Jul 23 31,598 27,754 3,844 15,815 13,402 2,413
Oct 23 0 0 0 0 0 0
Dec 23 18,293 17,487 806 22,932 22,384 548
Mar 24 2,641 2,570 71 1,408 1,373 35
May 24 1,673 1,391 282 0 0 0
Jul 24 949 931 18 484 484 0
Dec 24 3,016 3,027 -11 13,991 12,328 1,663
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 58,695 59,112 -417 55,094 55,143 -49
Open Open Change
Int Int
May 23 383 19,351 -18,968
Jul 23 86,313 80,994 5,319
Oct 23 22 19 3
Dec 23 57,406 55,644 1,762
Mar 24 9,038 8,262 776
May 24 3,183 2,874 309
Jul 24 1,327 921 406
Dec 24 5,517 4,612 905
Mar 25 3 3 0
May 25 0 0 0
Jul 25 0 0 0
Total 163,192 172,680 -9,488

FCOJ
General Comments: FCOJ closed lower yesterday on what appeared to be follow through 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 to down with objectives of 26w0.00 and 250.00 July. Support is at 260.00, 248.00, and 242.00 July, with resistance at 272.00, 275.00, and 181.00 July

COFFEE
General Comments: New York \and London closed lower yesterday on what appeared to be speculative selling tied to good weather forecasts for Brazil. 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 lower today at 0.698 million bags. The ICO daily average price is now 181.22 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 23 notices were posted for delivery against May futures and that total deliveries for the month are now 330 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 2440, 2490, and 2520 July.

SUGAR
General Comments: New York and London closed higher 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. Brazil will grow 637.1 million metric tons of sugarcane, 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. 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%.
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 2560, 2500, and 2460 July and resistance is at 2690, 2720, and 2750 July. Trends in London are up with objectives of 742.00 August. Support is at 711.00, 693.00, and 675.00 August and resistance is at 730.00, 733.00, and 736.00 August.

COCOA
General Comments: New York and London closed lower 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. 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 5.447 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 to down with objectives of 2880 and 2820 July. Support is at 2890, 2850, and 2810 July, with resistance at 3010, 3040, and 3070 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.

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