Softs Report 08/18/2023

COTTON
General Comments: Cotton closed lower again yesterday despite deteriorating crop conditions reported by USDA on Monday as ideas are around that Chinese economic data implies less cotton demand. There is more talk of a contraction that could develop in China and Cotton demand could be hurt if people have less money to spend on clothes. The heat is still extreme and has yet to moderate. Ideas of weaker demand due to economic problems in Asia and improved production prospects here at home continue and Chinese economic data continues to show weakness. There are still many concerns about demand from China and the rest of Asia due to the slow economic return of China in the world market and as China is trying not to buy from the US. There are also worries developing that the US could be moving into a mild recession after many months of superlative growth.
Overnight News: The Delta will get isolated showers and above normal temperatures. The Southeast will see isolated showers and near to above normal temperatures. Texas will have scattered showers and near to above normal temperatures. The USDA average price is now 79.04 ct/lb. ICE daily certified stocks are now 347 bales, from 347 bales yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 83.30, 82.50, and 82.00 December, with resistance of 85.00, 85.90 and 86.40 December.

DJ On-Call Cotton – Aug 17
As of Aug 11. 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
Jul 23 0 0 0 0 0 0
Oct 23 0 0 0 0 0 0
Dec 23 50,845 51,283 -438 38,626 38,049 577
Mar 24 9,254 8,384 870 2,448 2,279 169
May 24 5,439 5,123 316 200 201 -1
Jul 24 5,294 4,815 479 83 48 35
Dec 24 4,023 3,755 268 24,537 24,361 176
Mar 25 109 109 0 0 0 0
May 25 26 26 0 0 0 0
Jul 25 105 26 79 0 0 0
Dec 25 110 110 0 22 22 0
Total 75,205 73,631 1,574 65,916 64,960 956
Open Open Change
Int Int
Jul 23 0 0 0
Oct 23 103 108 -5
Dec 23 137,407 135,329 2,078
Mar 24 41,987 36,134 5,853
May 24 10,488 10,439 49
Jul 24 7,422 7,033 389
Dec 24 15,426 15,281 145
Mar 25 2 2 0
May 25 0 0 0
Jul 25 0 0 0
Dec 25 0 0 0
Total 212,835 204,326 8,509

FCOJ
General Comments: FCOJ closed sharply lower yesterday, but the trends are still up on the daily charts. Futures remain supported by very short Oranges production estimates for Florida. Futures are also being supported in forecasts for an above average hurricane season that could bring a storm to damage the trees once again. 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 products 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 up with no objectives. Support is at 313.00, 302.00, and 295.00 September, with resistance at 331.00, 334.00, and 337.00 September.

COFFEE
General Comments: New York closed a little lower and London closed a little higher yesterday as offers from Brazil and other countries in Latin America could be increasing. It looks like speculative selling hit the London market earlier in the week but was not seen as much yesterday. The Brazil harvest moving quickly along and offers should be increasing. Vietnam is not offering at all into the world market as domestic cash prices are very high. Ideas are that roaster demand is relaxing with more Coffee seen in the market now. There are reports of dry weather for the harvest in Arabica production in Brazil with high production expectations. There are still tight Robusta supplies for the market amid strong demand for Robusta with no offers from Vietnam in the world market due to very high domestic prices. Producers in Indonesia are said to have almost nothing left to sell. Central America is featuring Coffee offered with very high differentials. The market really needs big offers from Brazil to sustain any downside movement.
Overnight News: ICE certified stocks are unchanged today at 0.514 million bags. The ICO daily average price is now 149.24 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 down with objectives of 147.00 September. Support is at 145.00, 142.00, and 139.00 September, and resistance is at 151.00, 155.00 and 158.00 September. Trends in London are down with no objectives. Support is at 2520, 2500, and 2480 September, with resistance at 2600, 2640, and 2670 September.

SUGAR
General Comments: New York and London closed lower yesterday after a failed breakout higher. Reports of increased offers from Brazil are still around but the market remains in a trading range and could try to rally again as other origins are still not offering and demand is still strong. Brazil production increasing and as the weather in Southeast Asia is currently good for the next crop production prospects so relief could be coming soon. More Sugar is now available to the world market. India still has problems with current and future production potential. The current year export quota is already gone and the government has no plans to allow for additional exports at this time. Indian production is less this year and Pakistan also has reduced production and the monsoon has been uneven so far in both countries. Some areas have remained dry while others have seen too much rain. India announced a higher base price for Sugar paid to farmers to help promote additional planted area. Thailand production is also down a lot this year and many Asian countries are worried about El Nino impacting future production. Conab in Brazil estimated Sugarcane production at 652.9 million tons, from 647.1 million tons in April and 610.1 million tons last year. Sugar production is estimated at 40.9 million tons, from 38.8 million in April and 37 million last year. Ethanol production is estimated at 33.8 billion liters, from 33.2 billion in April.
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 2370, 2340, and 2300 October and resistance is at 2440, 2460, and 2490 October. Trends in London are mixed. Support is at 687.00, 683,00, and 675.00 October, with resistance at 704.00, 705.00, and 716.00 October.

COCOA
General Comments: New York and London closed higher again yesterday on ideas of tight supplies. Trends are turning up again on the daily charts in both markets. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue, 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 lower now with diseases reported in the trees due to too much rain that could also affect the main crop production.
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 5.249 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 3470 and 3600 September. Support is at 3370, 3300, and 3270 September, with resistance at 3440, 3520, and 3600 September. Trends in London are mixed to up with objectives of 2770 September. Support is at 2620, 2580, and 2540 September, with resistance at 2740, 2760, and 2790 September.

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