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 05/26/2023
General Comments: Cotton was lower for another day as traders continued to worry about a fallout from the failure of Congress to reach a new debt limit ceiling. Failure to agree on a new debt ceiling increase could push the US and world economies into recession and hurt Cotton demand. Speculators appeared to be the best sellers and also noted good and improving growing conditions and average planting progress for the US crop. Forecasts for showers are still showing in forecasts for West Texas to Oklahoma and Kansas and are expected to be beneficial. 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 mostly dry conditions 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 normal temperatures. The USDA average price is now 76.19 ct/lb. ICE daily certified stocks are now 63 bales, from 63 bales yesterday.
Chart Trends: Trends in Cotton are down with no objectives. Support is at 79.50, 78.6, and 78.10 July, with resistance of 81.80, 82.40 and 84.00 July.
DJ On-Call Cotton – May 25
As of May 19. 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.
*-denotes changes from the previous week are based on revised data from
Call Previous Change Call Previous Change
Jul 23 25,800 26,802 -1,002 10,513 15,190 -4,677
Oct 23 0 0 0 0 0 0
Dec 23 26,775 23,464 3,311 27,533 26,462 1,071
Mar 24 4,147 3,449 698 2,645 2,878 -233
May 24 2,569 2,305 264 200 200 0
Jul 24 1,597 1,578 19 391 374 17
Dec 24 3,206 3,184 22 18,792 17,022 1,770
Mar 25 43 43 0 0 0 0
May 25 26 26 0 0 0 0
Jul 25 26 26 0 0 0 0
Dec 25 110 110 0 0 0 0
Total 64,299 60,987 3,312 60,074 62,126 -2,052
Open Open Change
Jul 23 82,669 85,796 -3,127
Oct 23 18 22 -4
Dec 23 78,794 71,041 7,753
Mar 24 12,182 10,471 1,711
May 24 4,877 4,444 433
Jul 24 2,843 2,654 189
Dec 24 7,789 6,700 1,089
Mar 25 3 3 0
May 25 0 0 0
Jul 25 0 0 0
Dec 25 0 0 0
Total 189,175 181,131 8,044
General Comments: FCOJ closed moderately lower yesterday in correction trading. Trends are up on the daily charts. Futures remain supported by very short Oranges production estimates for Florida. 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.
Chart Trends: Trends in FCOJ are up with objectives of 301.00 July. Support is at 280.00, 270.00, and 260.00 July, with resistance at 299.00, 305.00, and 311.00 July.
General Comments: New York and London closed lower yesterday as the US Dollar rallied in the face of the US debt ceiling increase negotiations. Short term trends are turning down in New York. There are reports of good weather for Arabica production in Brazil with high production expectations. The Arabica harvest has started and offers of Arabica from Brazil are expected to increase over time. There are still tight Robusta supplies for the market amid strong demand for Robusta, but the Brazil harvest is in the market now and is expected to take some of the demand. 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 unchanged today at 0.620 million bags. The ICO daily average price is now 173.46 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.
Chart Trends: Trends in New York are mixed to down with objectives of 180.00, 176.00, and 165.00 July. Support is at 18100, 180.00, and 177.00 July, and resistance is at 187.00, 190.00 and 194.00 July. Trends in London are mixed to up with objectives of 2720 July. Support is at 2530, 2500, and 2460 July, and resistance is at 2670, 2710, and 2740 July.
General Comments: Both New York and London closed lower again yesterday, and trends are down for the short term. Unica estimated that Sugar production increased greatly in the first half of May to help the market think that supply shortages might come to an end for at least the time be4ing soon. The market is still hurt by good growing and harvesting conditions in Brazil but supported by tight current supplies. 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 being available now. 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. The ISO said that a sharp reduction for its projection for a global sugar supply surplus in 2022/23 is 850,000 tons from the 4.15 million tons seen in its previous quarterly report in February.
The cut was partly driven by downward revisions to production in India (32.8 million tons from 34.3 million) and Thailand (11.0 million tons from 12.3 million), though the ISO said the focus has now shifted to top exporter Brazil.
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 down with objectives of 2470 and 2420 July. Support is at 2460, 2360, and 2300 July and resistance is at 2550, 2580, and 2t620 July. Trends in London are mixed to down with objectives of 685.00 and 664.00 August. Support is at 675.00, 673.00, and 648.00 August and resistance is at 703.00, 708.00, and 7`3.00 August.
DJ Brazil Center-South Sugar Crush Up 28% at 44M Tons in 1H May, Unica Says
By Jeffrey T. Lewis
SAO PAULO–Brazilian sugar mills in the country’s center-south region crushed more cane in the first half of May compared with a year earlier, as dry weather aided the cane harvest, according to industry group Unica.
Center-south mills crushed 44 million metric tons of cane in the period, an increase of 28% from the same period a year earlier, Unica said Thursday. They produced 2.5 million tons of sugar, up 50%, and made 1.9 billion liters of ethanol, an increase of 15%.
The production mix for the first half of May was 48% sugar to 52% ethanol, compared with 41% sugar and 59% ethanol in the same period a year ago.
The dry weather in the period made work in the fields easier, while good weather earlier in the season has boosted crop yields, Unica said. Another 28 mills also started operations for the new season during the first half of the month, bringing the total number of mills that were up and running to 237, according to the organization.
In the period from April 1 through May 15, mills in the region crushed 79 million tons of cane, up 24% from the same period a year earlier. Sugar production rose 48% to 4.1 million tons, and ethanol output climbed 17% to 3.7 billion liters.
The production mix for the season through May 15 was 46% sugar to 54% ethanol, compared with 38.5% sugar and 61.5% ethanol in the same period a year earlier.
COCOAQuestions? Ask Jack Scoville today at 312-264-4322
General Comments: New York and London closed a little higher on what appeared to be follow through speculative trading. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast continue, but certified stocks are increasing in New York. 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. Cocoa arrivals at ports in Ivory Coast had reached 2.030 million tons by May 21 since the start of the season on Oct. 1, down 5.7% from the same period last season.
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 5.724 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2990, 2970, and 2950 July, with resistance at 3080, 3100, and 3130 July. Trends in London are mixed to up with no objectives. Support is at 2350, 2300, and 2270 July, with resistance at 2410, 2440, and 2470 July.