Softs Report 03/08/2024

DJ Food Prices Fell Further in February, UN Says
By Joe Hoppe
Food prices fell further in February, when lower prices for cereals more than offset increases in sugar and meat, the Food and Agriculture Organization of the United Nations said on Friday.
The FAO’s food price index, which tracks global prices for a basket of staple foods, averaged 117.3 points in February, down 0.7% from January’s level and around 10.5% lower from a year earlier. In January, food prices fell 1% from the previous month.
Cereal prices fell 5% in February, driven by lower prices for maize and wheat. Sharp price declines for maize reflected expectations of large harvests in South America and competitive prices offered by Ukraine, the FAO said. Wheat prices decreased mostly due to a strong export pace from the Russian Federation.
Meat prices rose by 1.8% in February, breaking a seven-month streak of declines, with poultry prices rising the most and followed by bovine meat rises. This reflects heavy rains disrupting cattle transportation in Australia. Meanwhile, pig meat prices also slightly rose, on higher China demand and tight supply in Western Europe.
Sugar prices were up 3.2% from January’s levels, due to persistent concerns over Brazil’s output after a prolonged period of dryer-than-normal weather conditions, as well as unfavorable production outlooks in leading exporters Thailand and India.
Vegetable oil prices fell 1.3% in February, to stand 11% down on-year. This reflects a marked drop in soyoil prices, reflecting expectations of a strong harvest of soybeans in South America, along with ample global export availabilities of sunflower and rapeseed oils, according to the latest FAO report.
Dairy prices rose 1.1% from January levels, pushed up by higher import demand from Asia for butter, while milk powders and cheese prices also marginally rose.

COTTON
General Comments: Cotton closed sharply higher to limit up yesterday on ideas of stronger demand against less supply and in anticipation of the WASDE reports released later today. It is too early to plant in Texas but the heat and dry weather raises concerns about production potential later in the growing season and blackened soils might not permit much planting, anyway. The demand news has been solid in this market for the last several weeks. The US economic data has been positive, but the Chinese economic data has not been real positive and demand concerns are still around. 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 weather and near normal temperatures. The Southeast will see mostly dry conditions and below normal temperatures. Texas will have mostly dry conditions and near to above normal temperatures. The USDA average price is now 93.89 ct/lb. ICE daily certified stocks are now 20,886 bales, from 13,531 bales yesterday. ICE said that 0 contracts were posted for delivery against March futures and that total deliveries for the month are now 7 contacts.
Chart Trends: Trends in Cotton are mixed. Support is at 95.30, 92.90, and 92.50 May, with resistance of 97.20, 98.40 and 100.50 May.

DJ On-Call Cotton – Mar 7
As of Mar 1. 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
Mar 24 11 170 -159 0 666 -666
May 24 25,179 26,678 -1,499 4,523 4,007 516
Jul 24 23,255 23,083 172 3,240 3,640 -400
Oct 24 0 0 0 0 0 0
Dec 24 17,033 15,181 1,852 33,380 33,050 330
Mar 25 2,645 2,094 551 2,193 1,975 218
May 25 838 794 44 923 870 53
Jul 25 634 590 44 16 16 0
Dec 25 612 744 -132 10,619 7,025 3,594
Mar 26 340 353 -13 0 0 0
May 26 110 110 0 0 0 0
Jul 26 44 44 0 0 0 0
Dec 26 0 0 0 132 0 132
Total 70,701 69,841 860 55,026 51,249 3,777
Open Open Change
Int Int
Mar 24 9 46 -37
May 24 129,700 131,760 -2,060
Jul 24 70,777 72,609 -1,832
Oct 24 73 63 10
Dec 24 60,100 55,248 4,852
Mar 25 5,288 4,757 531
May 25 1,063 839 224
Jul 25 896 727 169
Dec 25 468 352 116
Mar 26 14 1 13
May 26 0 0 0
Jul 26 0 0 0
Dec 26 1 1 0
Total 268,389 266,403 1,986

FCOJ
General Comments: FCOJ closed a little lower yesterday in consolidation trading. The daily and weekly chart trends are mixed. Prices had been moving lower on the increased production potential for Florida and the US and also in Brazil but held late last week as current supplies remain very tight amid only incremental relief for supplies is forecast for the coming new crop season. 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 amid reports of short supplies in Florida and Brazil are around but will start to disappear as the weather improves and the new crop gets harvested.
Overnight News: Florida should get scattered showers or dry conditions. Temperatures will average near normal. Brazil should get scattered showers and above normal temperatures. ICE said that 0 notices were posted for delivery against March futures and that total deliveries for the month are now 300 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 360.00, 350.00, and 343.00 May, with resistance at 378.00, 389.00, and 391.00 May.

COFFEE
General Comments: New York and London closed higher yesterday and trends are up in both markets. Robusta offers remain difficult to find and the lack of offer of Robusta is a bullish force behind the market action, and reports indicate that Brazil producers are reluctant sellers as well as they apparently have already sold a lot. Brazil weather continues to improve for Coffee production but is still not perfect. Rains continued to fall in parts of Brazil Coffee areas. Brazil weather is good for the best crop production.
Overnight News: ICE certified stocks are higher today at 0.410 million bags. The ICO daily average price is now 190.75 ct/lb. Brazil will get mostly scattered showers with near normal temperatures. Central America will get mostly dry conditions. Vietnam will see scattered showers. ICE NY said that 0 delivery notices ere posted against March contracts and that total deliveries for the month are now 952 contracts.
Chart Trends: Trends in New York are up with objectives of 201.00 May. Support is at 187.00, 182.00, and 180.00 May, and resistance is at 194.00, 196.00 and 201.00 May. Trends in London are up with no objectives. Support is at 3290, 3220, and 3190 May, with resistance at 3480, 3510, and 3340 May.

SUGAR
General Comments: New York and London closed lower yesterday and trends are mixed on the daily charts. Ideas of weaker demand are around the market and are causing the selling. The market continues to see stressful conditions in Asian production areas. There are worries about the Thai and Indian production. Offers from Brazil are still active but other origins. are still not offering in large amounts except for Ukraine.
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 2090, 2050, and 1930 May and resistance is at 2170, 2200, and 2260 May. Trends in London are mixed. Support is at 597.00, 590.00, and 586.00 May, with resistance at 615.00, 624.00, and 638.00 May.

COCOA
General Comments: New York and London were lower and trends remain mostly up as both markets reflecting the lack of supply in the world market against demand from non traditional sources along with traditional buyers. Production in West Africa could be reduced by 500,000 tons this year due to the extreme weather which included Harmattan conditions. The availability of Cocoa from West Africa remains restricted and projections for another production deficit against demand for the coming year are increasing. Traders are worried about another short production year and these feelings have been enhanced by El Nino that is threatening West Africa crops with hot and dry weather. Ideas of tight supplies remain based on more reports of reduced arrivals in Ivory Coast and Ghana continue. Demand continues strong, especially from non traditional buyers of Cocoa.
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 4.133 million bags. ICE NY said that 9 notices were posted for delivery against March futures and that total deliveries for the month are now 1,007 contacts.
Chart Trends: Trends in New York are mixed to up with objectives of 6850 May. Support is at 6310, 6200, and 5910 May, with resistance at 6680, 6740, and 6800 May. Trends in London are mixed to up with no objectives. Support is at 5280, 5040, and 4900 May, with resistance at 5620, 5720, and 5840 May.

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