Softs Report 01/16/2024

COTTON
General Comments: Cotton closed lower on Friday but higher for the week. USDA released its annual production report and the latest batch of WASDE report on Friday. The production report from USDA was bullish to prices as a cut in harvested area led to decreased production of 121.41 billion bales despite increased yields. Ending stocks were trimmed to 2.90 million bales from 310 million in December even with a cut in demand. Export and residual demand were cut. World ending stocks levels showed increased stocks and this hurt the price action in Cotton on Friday. The US economic data has been positive, but the Chinese economic data has not been real positive and demand has been down. 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.
Overnight News: The Delta will get mostly dry conditions and much below normal temperatures. The Southeast will see mostly dry conditions and much below normal temperatures. Texas will have mostly dry conditions and much below normal temperatures. The USDA average price is now 77.49 ct/lb. ICE daily certified stocks are now 1,949 bales, from 2,213 bales yesterday.
Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 81.10, 80.60, and 80.10 March, with resistance of 83.10, 83.40 and 85.80 March.

U.S. Cotton Supply and Use 1/
================================================================================
2021/22 2022/23 Est. 2023/24 Proj. 2023/24 Proj.
Item Dec Jan
================================================================================
Million Acres
Planted 11.21 13.75 10.23 10.23
Harvested 10.26 7.29 8.02 7.06

Pounds
Yield per Harvested
Acre 820 953 765 845

Million 480 Pound Bales
Beginning Stocks 3.15 4.05 4.25 4.25
Production 17.52 14.47 12.78 12.43
Imports 0.01 0.00 0.01 0.01
Supply, Total 20.68 18.52 17.03 16.69
Domestic Use 2.55 2.05 1.90 1.90
Exports, Total 14.48 12.77 12.20 12.10
Use, Total 17.03 14.82 14.10 14.00
Unaccounted 2/ -0.40 -0.55 -0.17 -0.21
Ending Stocks 4.05 4.25 3.10 2.90
Avg. Farm Price 3/ 91.4 84.8 77.0 76.0
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WASDE – 644 – 18 January 2024

World Cotton Supply and Use 1/
(Million 480-Pound Bales)
================================================================================
Supply Use
Region Beginning Produc- Loss Ending
Stocks tion Imports Domestic Exports 2/ Stocks
================================================================================

2023/24 Proj.
World
Dec 82.83 112.92 43.15 113.73 43.15 -0.37 82.40
Jan 83.22 113.18 43.05 112.43 43.05 -0.41 84.38
World Less China
Dec 45.43 85.92 32.15 77.23 43.06 -0.37 43.58
Jan 45.81 85.68 31.55 75.93 42.96 -0.41 44.57
United States
Dec 4.25 12.78 0.01 1.90 12.20 -0.17 3.10
Jan 4.25 12.43 0.01 1.90 12.10 -0.21 2.90
Total Foreign
Dec 78.58 100.14 43.15 111.83 30.95 -0.20 79.30
Jan 78.97 100.75 43.05 110.53 30.95 -0.20 81.48
Major Exporters 4/
Dec 29.76 57.54 2.07 33.32 26.64 -0.20 29.61
Jan 30.14 57.73 2.04 32.82 26.52 -0.20 30.78
Major Importers 8/
Dec 45.87 39.04 38.59 74.52 2.50 0.00 46.49
Jan 45.87 39.54 38.47 73.80 2.62 0.00 47.45
================================================================================
WASDE – 644 – 28 January 2024

COT — Supplemental Report – Option and Futures Combined Positions as of January 09, 2024
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COTTON NO. 2 – ICE FUTURES U.S.
CFTC Code #033661 Open Interest is 234,519
: Positions :
: 35,039 41,556 56,241 55,229 100,986 74,281 22,158 220,791 220,942: 13,728 13,578
: Changes from: January 2, 2024 (Change in open interest: 6,480) :
: 1,943 956 2,484 2,229 2,217 -887 575 5,769 6,231: 711 249
: Percent of Open Interest Represented by Each Category of Trader :
: 14.9 17.7 24.0 23.6 43.1 31.7 9.4 94.1 94.2: 5.9 5.8
: Total Traders: 267 Number of Traders in Each Category :
: 70 78 89 50 60 47 25 212 209:
——————————————————————————————————————-

FCOJ
General Comments: FCOJ closed lower last week on what appeared to be long liquidation and new selling from speculators as the downside price action continued. The moves imply that supply is finally getting bigger than demand and imply that consumer demand has dropped significantly in recent weeks. USDA showed increased US production of Oranges at 2,80 million tons, up 2% from last month and 12% from last year. Florida production was unchanged from last month and up 30% higher than last year at 20.5 million boxes. Orange production in California and Texas is also showing year on year increase in production. Nielsen reported increased sales of Orange Juice for the second month in a row at 29.97 million gallons. Sales were 26.48 million gallons last month. The demand is the highest since last January. Prices have been moving lower on the increased production potential for Florida and the IUS and also in Brazil. There are no weather concerns to speak of for Florida or for Brazil right now. The weather has improved in Brazil with some moderation in temperatures and increased rainfall in the forecast for this week. Brazil got more than expected rains over the weekend. Reports of short supplies in Florida and Brazil are around. Historically low estimates of production in Florida 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.
Overnight News: Florida should get scattered showers. Temperatures will average near normal. Brazil should get scattered showers and above normal temperatures. ICE said that 0 notices were posted for delivery against January futures and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 298.00, 292.00, and 280.00 March, with resistance at 310.00, 320.00, and 327.00 March.

Orange Production Up 2 Percent from December Forecast
The United States all orange forecast for the 2023-2024 season is
2.80 million tons, up 2 percent from the previous forecast and up 12 percent
from the 2022-2023 final utilization. The Florida all orange forecast, at
20.5 million boxes (923,000 tons), is unchanged from the previous forecast
but up 30 percent from last season’s final utilization. In Florida, early,
midseason, and Navel varieties are forecast at 7.50 million boxes
(338,000 tons), unchanged from the previous forecast but up 22 percent from
last season’s final utilization. The Florida Valencia orange forecast, at
13.0 million boxes (585,000 tons), is unchanged from the previous forecast
but up 35 percent from last season’s final utilization.
The California all orange forecast is 45.8 million boxes (1.83 million tons),
is up 3 percent from previous forecast and up 6 percent from last season’s
final utilization. The California Navel orange forecast is 38.0 million boxes
(1.52 million tons), up 3 percent from the previous forecast and up 4 percent
from last season’s final utilization. The California Valencia orange forecast
is 7.80 million boxes (312,000 tons), up 4 percent from the previous forecast
and up 16 percent from last season’s final utilization. The Texas all orange
forecast, at 950,000 boxes (41,000 tons) up 19 percent from the previous
forecast but down 16 percent from last season’s final utilization.
This report was approved on January 12, 2024.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of January 9, 2024
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
—————————————————————————————————————-
FRZN CONCENTRATED ORANGE JUICE – ICE FUTURES U.S. (CONTRACTS OF 15,000 POUNDS) :
CFTC Code #040701 Open Interest is 12,882 :
: Positions :
: 3,327 4,420 844 152 106 1,752 1,216 706 1,076 759 3,286 :
: Changes from: January 2, 2024 :
: 66 -251 -56 -21 52 -291 45 223 324 63 734 :
: Percent of Open Interest Represented by Each Category of Trader :
: 25.8 34.3 6.6 1.2 0.8 13.6 9.4 5.5 8.4 5.9 25.5 :
: Number of Traders in Each Category Total Traders: 62 :
: 11 7 . . . 13 7 5 9 16 9 :
—————————————————————————————————————-

COFFEE
General Comments: New York closed lower and London closed higher last week on index fund buying in New York and as Robusta offers remain difficult to find. London was the leader last week on the rally. The chart trends for both markets imply that more rallies can be expected in the next few weeks. Rains continued to fall in parts of Brazil Coffee areas and Vietnamese and Brazilian producers remain reluctant sellers. Brazil production areas are seeing some very beneficial rainfall this current week. Arabica and Robusta areas were affected by drought, but the current forecasts call for a lot of help in affected areas. Brazil weather remains uneven but is improving for the best crop production.
Overnight News: ICE certified stocks are unchanged today at 0.261 million bags. The ICO daily average price is now 171.54 ct/lb. Brazil will get mostly scattered showers with near 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, 168.00, and 165.00 March, and resistance is at 185.00, 188.00 and 192.00 March. Trends in London are mixed. Support is at 2920, 2820, and 2780 March, with resistance at 2990, 3020, and 3050 March.

DJ Supply-Chain Issues Keep Brazil From Exporting More Coffee — Market Talk
Supply-chain bottlenecks kept Brazil from exporting at least 2 million 60-kilogram bags of coffee, the president of the Cecafé trade group Márcio Ferreira says in a press release. Brazil exported 39.2 million bags last year, slightly less than in 2022, while export revenue dropped 13% to $8 billion. In December, exports rose 27% in volume and 12% in revenue from a year earlier. Brazil exported 30.8 million bags of arabica coffee and 4.7 million of robusta, Cecafé said. Instant coffee exports totalled 3.7 million bags and ground coffee 50,377 bags. The organization reported shipment delays happening every month of last year. In futures markets, coffee continuous contract rises 2.7%.

COT — Supplemental Report – Option and Futures Combined Positions as of January 09, 2024
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COFFEE C – ICE FUTURES U.S.
CFTC Code #083731 Open Interest is 269,546
: Positions :
: 48,350 23,171 87,806 54,779 140,982 68,241 9,019 259,176 260,978: 10,370 8,569
: Changes from: January 2, 2024 (Change in open interest: -4,241) :
: -418 -3,041 279 1,107 -546 -5,080 -271 -4,113 -3,579: -129 -662
: Percent of Open Interest Represented by Each Category of Trader :
: 17.9 8.6 32.6 20.3 52.3 25.3 3.3 96.2 96.8: 3.8 3.2
: Total Traders: 388 Number of Traders in Each Category :
: 112 82 125 101 119 53 23 334 294:
——————————————————————————————————————-

SUGAR
General Comments: New York and London closed higher last week and are testing the upside of the trading range on the weekly charts. So far, the markets have failed to confirm a new up trend. Brazil weather forecasts call for dryness in the south and continued scattered showers in central and northern areas this week. The market continues to see stressful conditions in Asian production areas but has noted that India has changed its Ethanol policy to make more Sugar available to the market. There are worries about the Thai and Indian production potential due to El Nino and talk that India could turn into an importer next year. Offers from Brazil are still active but other origins. are still not offering or at least not offering in large amounts except for Ukraine, and demand is still strong. Brazil ports are very congested, so shipment of Sugar has been slower. UNICA said that the Brazil Sugarcane crush was 4.87 million tons in the second half of December, up 80% from last year. Sugar production was 235,800 tons, up 36% from last year. Ethanol production was 526.1 million liters, up 63% from last year.
Overnight News: Brazil will get rains in the south and scattered showers in the north. Temperatures should average above normal. India will get mostly dry conditions and below normal temperatures.
Chart Trends: Trends in New York are mixed. Support is at 2120, 2060, and 2040 March and resistance is at 2200, 2250, and 2310 March. Trends in London are mixed. Support is at 610.00, 597.00, and 595.00 March, with resistance at 633.00, 639.00, and 645.00 March.

U.S. Sugar Supply and Use 1/
================================================================================
2021/22 2022/23 Est. 2023/24 Proj. 2023/24 Proj.
Item Dec Jan
================================================================================
1000 Short Tons, Raw Value
Beginning Stocks 1705 1820 1855 1843
Production 2/ 9157 9250 9243 9391
Beet Sugar 5155 5187 5363 5407
Cane Sugar 4002 4063 3880 3985
Florida 1934 1985 2037 2037
Louisiana 1944 2001 1799 1904
Texas 124 76 44 44
Imports 3646 3614 3256 3310
TRQ 3/ 1579 1862 1620 1613
Other Program 4/ 298 141 200 200
Non-program 1769 1611 1436 1497
Mexico 1379 1156 971 922
High-tier tariff/other 390 455 465 575
Total Supply 14508 14685 14354 14544
Exports 29 82 100 160
Deliveries 12578 12589 12630 12630
Food 12470 12473 12525 12525
Other 5/ 107 116 105 105
Miscellaneous 81 171 0 0
Total Use 12688 12843 12730 12790
Ending Stocks 1820 1843 1624 1754
Stocks to Use Ratio 14.3 14.3 12.8 13.7
================================================================================
Mexico Sugar Supply and Use and High Fructose Corn Syrup Consumption 1/
================================================================================
Supply Use
Fiscal Beginning Produc- Imports Domestic Exports Ending
Year Stocks tion 2/ Stocks
================================================================================
1000 Metric Tons, Actual Weight
Sugar
2022/23 Est.
Dec 964 5224 285 4627 1011 835
Jan 964 5224 285 4627 1011 835
2023/24 Proj.
Dec 835 5283 286 4648 856 900
Jan 835 5016 511 4648 814 900
================================================================================
WASDE – 644 – 17 January 2024

COT — Supplemental Report – Option and Futures Combined Positions as of January 09, 2024
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
SUGAR NO. 11 – ICE FUTURES U.S.
CFTC Code #080732 Open Interest is 1,106,520
: Positions :
: 69,562 78,301 300,670 434,894 576,530 221,597 85,389 1,026,722 1,040,890: 79,798 65,630
: Changes from: January 2, 2024 (Change in open interest: -10,382) :
: -6,144 1,130 6,992 -13,349 -23,317 2,665 718 -9,836 -14,476: -546 4,095
: Percent of Open Interest Represented by Each Category of Trader :
: 6.3 7.1 27.2 39.3 52.1 20.0 7.7 92.8 94.1: 7.2 5.9
: Total Traders: 217 Number of Traders in Each Category :
: 54 45 72 70 70 38 21 196 174:
——————————————————————————————————————-

COCOA
General Comments: Both markets closed higher last week after trading lower early in the week. The weekly chart patterns display the potential for hook reversals to higher prices in coming weeks. The availability of Cocoa from West Africa remains restricted and projections for another production deficit against demand for the coming year are increasing.. The harvest seems to be coming and demand could be a problem with the current very high prices. Traders are worried about another short production year and these feelings have been enhanced by El Nino that could threaten West Africa crops with hot and dry weather later this year. The main crop harvest is starting in parts of West Africa so the losses will become minor for now. Scattered to isolated showers are reported in the region now and the harvest is coming. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue,
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 above normal temperatures. ICE certified stocks are lower today at 4.100 million bags.
Chart Trends: Trends in New York are up with objectives of 4570 and 4770 March. Support is at 4230, 4190, and 4100 March, with resistance at 4370, 4400, and 4430 March. Trends in London are up with no objectives. Support is at 3570, 3500, and 3470 March, with resistance at 3620, 3660, and 3690 March.

COT — Supplemental Report – Option and Futures Combined Positions as of January 09, 2024
: Reportable Positions : Nonreportable
:—————————————————————————————- : Positions
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short :Spreading: Long : Short : Long : Short : Long : Short : Long : Short
——————————————————————————————————————-
COCOA – ICE FUTURES U.S.
CFTC Code #073732 Open Interest is 455,103
: Positions :
: 85,060 43,675 190,168 119,535 185,603 44,245 17,698 439,009 437,144: 16,095 17,960
: Changes from: January 2, 2024 (Change in open interest: -196) :
: -2,107 -472 -5,285 6,531 1,384 224 1,780 -636 -2,593: 440 2,398
: Percent of Open Interest Represented by Each Category of Trader :
: 18.7 9.6 41.8 26.3 40.8 9.7 3.9 96.5 96.1: 3.5 3.9
: Total Traders: 267 Number of Traders in Each Category :
: 97 74 92 35 44 33 19 211 193:
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Questions? Ask Jack Scoville today at 312-264-4322