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 05/10/2023
General Comments: Cotton was lower again yesterday and the trends are mixed on the daily charts. Demand has been good, but the market is starting to shift attention to the new crop. Planting intentions showed only weak production ideas, but demand has been less until reviving lately. Forecasts for rain are still showing in forecasts for West Texas but the rains are expected to be lighter and more scattered than last week. The rains last week were spotty so more rain in new areas would be very beneficial. 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 held strong and as the Chinese economy gets better after all of the Covid lockdowns.
Overnight News: The Delta will get isolated to scattered showers and near to above normal temperatures. The Southeast will see isolated showers and near to above normal temperatures. Texas will have isolated to scattered showers and near to above normal temperatures. The USDA average price is now 77.74 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.
Chart Trends: Trends in Cotton are mixed. Support is at 79.80, 78.60, and 78.10 July, with resistance of 83.10, 84.10 and 84.90 July.
General Comments: FCOJ closed sharply lower again yesterday and broke through support areas on the charrs. Trends are now down in this market despite very tight supplies as there has not been any news to keep bulls in the market lately. 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 down with objectives of 240.00 and 220.00 July. Support is at 242.00, 237.00, and 229.00 July, with resistance at 260.00, 266.00, and 172.00 July.
General Comments: New York was a little higher, and London was a little lower on reports of increased offers of Robusta from Brazil, good weather for Arabica production there, and high production expectations for Brazil. The Arabica harvest is now just a few weeks away and offers of Arabica from Brazil are expected to increase at that time. Funds and other speculators appeared to be the best sellers. Charts trends are sideways on the daily charts. There are still tight Robusta supplies for the market amid strong demand for Robusta, but the Brazil harvest is in the market now. The Brazil harvest of Robusta is in full swing and promising to help relieve tight supplies in that market. The Arabica harvest should be active in the next few weeks. 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 market really needs big offers from Brazil to sustain any down side movement.
Overnight News: ICE certified stocks are lower today at 0.650 million bags. The ICO daily average price is now 176.98 ct/lb. Brazil will get mostly dry conditions with near to above normal temperatures. Central America will get mostly dry conditions. Vietnam will see scattered showers. ICE NY said that 0 notices were posted for delivery against May futures and that total deliveries for the month are now 380 contracts.
Chart Trends: Trends in New York are mixed. Support is at 181.00, 180.00, and 177.00 July, and resistance is at 190.00, 196.00 and 198.00 July. Trends in London are mixed. Support is at 2380, 2330, and 2270 July, and resistance is at 2450, 2490, and 2520 July.
General Comments: New York closed higher yesterday, and London was a little lower. The market was hurt by good growing conditions in Brazil for New York but supported by tight current supplies. Concern was noted about Chinese demand and the Brazil harvest is now just a few weeks away. Chinese demand has been a mystery as no one knows how much they will eventually buy. 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. It should start becoming available soon. 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. 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 below normal temperatures.
Chart Trends: Trends in New York are mixed. Support is at 2560, 2490, and 2460 July and resistance is at 2650, 2680, and 2720 July. Trends in London are mixed. Support is at 700.00, 675.00, and 672.00 August and resistance is at 730.00, 733.00, and 736.00 August.
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General Comments: New York and London closed higher as ideas of tight supplies based on more reports of reduced arrivals in Ivory Coast continue. 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 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 5.578 million bags. ICE NY said that 119 notices were posted for delivery against May futures and that total deliveries for the month are now 1,072 contracts.
Chart Trends: Trends in New York are mixed to up with objectives of 3030 and 3080 July. Support is at 2920, 2900, and 2860 July, with resistance at 3010, 3040, and 3070 July. Trends in London are mixed to up with objectives of 2310 and 2380 July. Support is at 2220, 2200, and 2170 July, with resistance at 2250, 2290, and 2320 July.