Softs Report 06/06/2023

COTTON
General Comments: Cotton closed a little lower yesterday in what was called consolidation trading as he market looked for news to trade on. News from China that Covid has returned and that the economic data from there was sluggish for the month also hurt. Good and improving growing conditions and average planting progress for the US crop was seen in USDA and NOAA data yesterday. 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 80.54 ct/lb. ICE daily certified stocks are now 13,000 bales, from 7,000 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 84.50, 82.60, and 81.90 July, with resistance of 87.10, 88.00 and 88.60 July.

Crop Progress
Date 04-June 28-May 2022 Avg
Cotton Planted 71 60 82 75
Cotton Squaring 6 3 10 10
Crop Condition
Very Poor Poor Fair Good Excellent
Cotton This Week 1 11 37 43 6
Cotton Last Week 1 12 39 41 7
Cotton Last Year 2 13 37 43 5

FCOJ
General Comments: FCOJ closed lower yesterday, with July futures weakest due increasingly to the roll out of July positions by speculators and commercials. 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 mixed to down with objectives of 220.00 July. Support is at 270.00, 260.00, and 255.00 July, with resistance at 280.00, 290.00, and 299.00 July.

COFFEE
General Comments: New York and London closed higher yesterday as traders were more concerned about a lack of fresh coffee available to the market right now. There are reports of good rains and dry weather mixed in for Arabica production in Brazil with high production expectations. The Arabica harvest has started and offers of Arabica from Brazil are increasing. 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 are also reported to be short Coffee to sell. The market really needs big offers from Brazil to sustain any down side movement. Southeast and south Asian producers could see another tough production year this year due to the effects of El Nino.
Overnight News: ICE certified stocks are lower today at 0.565 million bags. The ICO daily average price is now 173.15 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. Support is at 179.00, 174.00, and 171.00 July, and resistance is at 185.00, 187.00 and 190.00 July. Trends in London are mixed. Support is at 2530, 2500, and 2460 July, and resistance is at 2610, 2670, and 2710 July.

SUGAR
General Comments: Both New York and London closed lower and trends are turning down in both markets. Weakness in Crude oil and other petroleum futures helped selling interest in Sugar. Crude Oil had been higher in early trading on news that Saudi Arabia would be cutting production again, but the rally was not sustained. 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. Indian production is less this year and Pakistan also has reduced production. Thailand also has a smaller crop. 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 to down with no objectives. Support is at 2300, 2220, and 2200 July and resistance is at 2510, 2540, and 2580 July. Trends in London are down with objectives of 639.00 and 594.00 August. Support is at 676.00, 670.00, and 665.00 August and resistance is at 696.00, 703.00, and 718.00 August.

COCOA
General Comments: New York and London closed higher. 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.
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 lower today at 5.690 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 3080, 3090, and 3120 July. Support is at 3030, 2990, and 2970 July, with resistance at 3080, 3100, and 3130 July. Trends in London are mixed. Support is at 2320, 2300, and 2270 July, with resistance at 2370, 2410, and 2440 July.

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