Softs Report 01/23/2025

COTTON
General Comments: Cotton was lower yesterday on reports of increased farm and speculative selling. The US Dollar was higher, and Crude Oil futures have been weaker. Selling has come from news that Trump will impose some big tariffs on China, but the tariffs have not been posted as of yet. China has big problems with its domestic economy with consumer buying interest not strong and many people not working. The government has said it will take stimulus measures for the economy there next year, but its Cotton demand is expected to stay soft. There are still reports of weaker demand potential against an outlook for good US production in the coming year.
Overnight News:
Chart Trends: Trends in Cotton are mixed to up. Support is at 66.20, 65.60, and 65.00 March, with resistance of 68.70, 69.10 and 69.40 March.

FCOJ
General Comments: FCOJ closed a little higher yesterday as another cold front moved through the eastern US this week but did not damage crops. Chart trends are mixed to up on the daily charts. The short term supply scenario remains very tight as USDA maintained its Florida production estimate at 12 million boxes and estimated US production at 60.3 million boxes from 60.6 million in its previous estimate. The lack of lower production goes against ideas of declining demand and even if demand is holding well. The market remains well supported in the longer term based on forecasts for tight supplies in Florida. The reduced production appears to be mostly at the expense of the greening disease and some extreme weather seen in the last couple of years. There are no weather concerns to speak of for Brazil or Florida right now, but cold weather for Florida this week should be monitored in case damage becomes possible.
Overnight News:
Chart Trends: Trends in FCOJ are mixed to up. Support is at 474.00, 467.00, and 461.00 March, with resistance at 499.00, 507.00, and 512.00 March.

COFFEE
General Comments: New York and London were much higher yesterday on doubts about the production in Brazil and reduced offers by Vietnam producers with the Tet holiday here. The rains in Brazil are falling in the dry southern area as central areas have had good rains in recent weeks and are already in good condition. However, reports indicate that the production of Conillon coffee is less than expected. Conab reduced its projection for the country’s 2024 coffee crop by 0.57 million bags to 54.21 million, mostly due to smaller-than-expected production of robusta beans. Tight Arabica availability went against tight Robusta availability as the harvest has stalled in Vietnam due to too much rain. The rains are also hurting the quality of the harvest as it is more difficult to dry and store the beans correctly. Reports of reduced offers from Brazil on weather induced short crops continue and there are also reports of too much rain in parts of Central America damaging crops there. The flow of coffee from Brazil should slow this year, an off-year in the country’s biennial crop cycle, while dry weather last year could also reduce the size of the 2025/26 harvest.
Overnight News: The ICO average price is 318.17 ct/lb.
Chart Trends: Trends in New York are up. Support is at 329.00, 321.00, and 315.00 March, and resistance is at 353.00, 360.00 and 366.00 March. Trends in London are up. Support is at 5260, 5100, and 4910 March, with resistance at 5510, 5550, and 5690 March.

SUGAR
General Comments: New York and London were higher yesterday as the funds and other speculators decided to cover some short positions. Ideas of increasing Brazil and Asian production are keeping prices low overall. India has announced a new one million ton export program. Center-south Brazil, India, and Thailand all have improved production potential. However, Brazilian agricultural yields on sugarcane farms fell by 10.8% in 2024 to an average of 78 metric tons per hectare. The Brazilian Real has been very weak lately to encourage sales and help keep pressure on prices. Trends are mixed in both markets on the daily charts and on the weekly charts. Indian and Thai mills are expecting strong crops of cane. Supplies available to the market could be less in the next six months due to adverse growing conditions seen in Brazil during the production period. Total Brazil production has been affected by drought seen earlier in the year and the fires that destroyed crops in some areas.
Overnight News:
Chart Trends: Trends in New York are down. Support is at 1760, 1730, and 1700 March and resistance is at 1900, 1940, and 2000 March. Trends in London are mixed to down. Support is at 460.00, 454.00, and 448.00 March, with resistance at 495.00, 501.00, and 510.00 March.

COCOA
General Comments: New York and London closed higher again yesterday as Ivory Coast port arrivals and Ghana arrivals are expected to fade. There is talk that production will be short of demand for the fourth year in a row, but demand has been weakening. Chart trends are tuning up in both markets on the daily charts. Producers in Ghana and in Ivory Coast have been fighting against too much rain that has made it hard to harvest and deliver crops. It has been very dry in West Africa lately. Overall cocoa supply is set to remain sharply constrained for several seasons due to structural problems in Ivory Coast and Ghana.
Overnight News:
Chart Trends: Trends in New York are mixed. Support is at 10250, 9830, and 9450 March, with resistance at 11880, 12000, and 12910 March. Trends in London are mixed. Support is at 8500, 8160, and 7810 March, with resistance at 9380, 10200, and 10500 March.

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