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 05/18/2023
General Comments: Cotton was higher yesterday and made new highs for the move. Speculators appeared to be the best buyers and bought for chart based reasons and despite news from Tuesday of weaker than expected Chinese economic data The data from China hurt demand ideas from that buyer on Tuesday but appeared to be done with yesterday.. The US Dollar rallied again yesterday and appears ready to make new highs for the move. Forecasts for showers are still showing in forecasts for West Texas but are expected to be lighter and more scattered than last week. 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 scattered showers and near to below normal temperatures. The USDA average price is now 83.37 ct/lb. ICE daily certified stocks are now 63 bales, from 63 bales yesterday. USDA said that weekly net Upland Cotton export sales were 132,400 bales this year and 2 8,100 bales next year. Net Pima sales were 9,500 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are up with no objectives. Support is at 85.20, 84.90, and 83.00 July, with resistance of 86.70, 87.40 and 88.60 July.
General Comments: FCOJ closed lower yesterday and futures are holding to a trading range again. 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 work 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 isolated showers. Temperatures will average near normal. Brazil should get mostly dry conditions and near to above normal temperatures. ICE said that 0 notices were posted for delivery against May contracts and that total deliveries for the month are now 30 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 249.00, 239.00, and 237.00 July, with resistance at 260.00, 266.00, and 272.00 July.
General Comments: New York closed lower and London closed much higher yesterday in speculative trading. New York felt roasters leave the market on the rally, but London extended its supply based rally for another day. There are reports of good weather for Arabica production in Brazil with high production expectations. The Arabica harvest is now just a few weeks away and offers of Arabica from Brazil are expected to increase at that time. 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 Robusta market is especially tight and has been pushing on the Arabica price, but Arabica supplies are growing tight in the market as well. Producers in Vietnam and Indonesia 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 0.634 million bags. The ICO daily average price is now 172.43 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 12 notices were posted for delivery against May futures and that total deliveries for the month are now 664 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 to up with objectives of 2610 and 2720 July. Support is at 2500, 2470, and 2450 July, and resistance is at 2590, 2620, and 2650 July.
DJ Brazil Trims Total 2023 Coffee Crop Forecast to 54.7M Bags
By Jeffrey T. Lewis
SÃO PAULO–Brazilian government crop agency Conab on Thursday trimmed its forecast for coffee production this year to a total of 54.7 million bags as expectations for a smaller robusta crop outweighed a bigger forecast for the arabica variety of beans.
Brazil, the world’s biggest producer and exporter of coffee, grew 50.9 million 132-pound bags of coffee in 2022, and in January Conab forecast a total coffee crop of 54.9 million bags for this year.
Brazilian farmers will produce 37.9 million bags of the more popular arabica beans, up from the 37.4 million bags Conab forecast in January. Brazil produced 32.7 million bags in 2022. Better weather conditions in Brazil’s main arabica-producing state, Minas Gerais, is boosting productivity, Conab said.
Conversely, bad weather in the state of Espirito Santo, which grows most of Brazil’s robusta crop, reduced the forecast for that variety to 16.8 million bags from the 17.5 million bags forecast in January. Last year, Brazil produced 18.2 million bags of robusta.
General Comments: Both New York and London closed lower again yesterday, and trends remain sideways in both markets. The market is still hurt by good growing conditions in Brazil 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 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 above normal. India will get mostly dry conditions and below normal temperatures.
Chart Trends: Trends in New York are mixed. Support is at 2590, 2560, and 2490 July and resistance is at 2680, 2720, and 2750 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.
COCOAQuestions? Ask Jack Scoville today at 312-264-4322
General Comments: New York closed higher and London closed mostly a little higher on ideas of tight supplies that remain 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, but certified stocks have increased a lot this week in New York and deliveries have picked up as well. 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
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 a little lower today at 5.683 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2970, 2950, and 2920 July, with resistance at 3010, 3050, and 3070 July. Trends in London are mixed to up with objectives of 2310 and 2380 July. Support is at 2270, 2220, and 2200 July, with resistance at 2320, 2350, and 2380 July.