Softs Report 05/12/2025

US and China reach deal to temporarily slash tariffs, easing slump fears – Reuters News
12 May 2025 06:51:02 AM
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• Geneva talks mark first high-level US-China meeting since Trump’s return
• Trade war halted $600 billion in bilateral trade, sparking stagflation fears
• New economic dialogue forum agreed by US and China post-talks
GENEVA, May 12 (Reuters) – The United States and China have agreed to temporarily slash reciprocal tariffs in a deal that surpassed expectations as the world’s two biggest economies seek to end a damaging trade war that has stoked fears of recession and roiled financial markets.
The U.S. will cut extra tariffs it imposed on Chinese imports in April this year to 30% from 145% and Chinese duties on U.S. imports will fall to 10% from 125%, the two sides said on Monday. The new measures are effective for 90 days.
The dollar rose and stock markets lifted following the news, which helped allay concerns about a downturn triggered last month by U.S. President Donald Trump’s escalation of tariff measures aimed at narrowing the U.S. trade deficit.
“Both countries represented their national interest very well,” U.S. Treasury Secretary Scott Bessent said after talks with Chinese officials in Geneva. “We both have an interest in balanced trade, the U.S. will continue moving towards that.”
Striking a conciliatory tone towards China, Bessent was speaking alongside U.S. Trade Representative Jamieson Greer after the weekend talks in Switzerland in which both sides hailed progress on narrowing differences.
“The consensus from both delegations this weekend is neither side wants a decoupling,” Bessent said. “And what had occurred with these very high tariffs … was the equivalent of an embargo, and neither side wants that. We do want trade.”
The tariff dispute had brought nearly $600 billion in two-way trade to a standstill, disrupting supply chains, sparking fears of stagflation and triggering some layoffs.
The Geneva meetings were the first face-to-face interactions between senior U.S. and Chinese economic officials since Trump returned to power and launched a global tariff blitz, imposing particularly hefty duties on China.
Bessent said the deal did not include sector-specific tariffs and that the U.S. would continue strategic rebalancing in areas including medicines, semiconductors and steel where it had identified supply chain vulnerabilities.
The accord went further than many analysts had expected following weeks of confrontational rhetoric on trade.
“This is better than I expected. I thought tariffs would be cut to somewhere around 50%,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management in Hong Kong.
“Obviously, this is very positive news for economies in both countries and for the global economy, and makes investors much less concerned about the damage to global supply chains in the short term,” Zhang added.
REPRIEVE
Since taking office in January, Trump had hiked the tariffs paid by U.S. importers for goods from China to 145%, in addition to those he imposed on many Chinese goods during his first term and the duties levied by the Biden administration.
China hit back by putting export curbs on some rare earth elements, vital for U.S. manufacturers of weapons and electronic consumer goods, and raising tariffs on U.S. goods to 125%.
Shares in European firms hit by the trade war rallied after the deal. Shipping company Maersk MAERSKb.CO was the biggest gainer in Europe, up more than 12%. It warned last week that container volumes between the U.S. and China had plunged due to the dispute.
Meanwhile, shares in luxury firms LVMH LVMH.PA and Gucci-owner Kering PRTP.PA were up 7.4% and 6.7% respectively.
U.S. planemaker Boeing did not respond to requests for comment on how the deal would affect deliveries of aircraft to Chinese customers. In April, it said it was looking to resell potentially dozens of planes locked out of China by tariffs.
Wall Street stock futures climbed as the talks boosted hopes a global recession might be averted.
Trump gave a positive reading of the talks before they had concluded, saying the two sides had negotiated “a total reset… in a friendly, but constructive, manner.”
The president levied the tariffs in part after declaring a national emergency over fentanyl entering the United States, and Greer said conversations over curbing the deadly opioid were “very constructive” though on a separate track.
U.S. and Chinese officials met over two days at the Swiss U.N. ambassador’s gated villa overlooking Lake Geneva. Greer said many of the most challenging issues were settled outside, sitting on patio furniture beneath the shade of a tall tree.
“Having this setting, as opposed to … a sterile hotel conference situation or conference rooms, I think, let us develop personal relationships with our counterparts and lead to the successful conclusion,” he said.

COTTON
General Comments: Cotton was lower last week on better weather for planting in the southern US and on demand concerns caused by the tariff wars and after USDA reported poor weekly export sales. Planting conditions remain good. Some rain was reported in west Texas last week, and farmers are in the fields. More showers are in the forecast for the Great Plains. Planting progress is about the same as the five year average and conditions of the crops should be good. Demand is a concern after w week of poor export sales. The potential for war between India and Pakistan as well as the tariffs imposed on and by China are hurting the demand potential. China and the US started to talk over the weekend in Switzerland and it was hoped that the meetings would be cordial even with no deals announced.
Overnight News: The USDA average price is now 67.74 ct/lb. ICE said that 0 notices were posted for May delivery and that total deliveries for the month are now 10 contracts.
Chart Trends: Trends in Cotton are mixed. Support is at 66.20, 65.70, and 65.10 July, with resistance of 67.80, 69.10 and 70.00 July.

COT — Supplemental Report – Option and Futures Combined Positions as of May 06, 2025
: 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 267,054
: Positions :
: 31,235 70,119 67,446 80,557 99,903 75,567 15,547 254,805 253,014: 12,250 14,040
: Changes from: April 29, 2025 (Change in open interest: 12,426) :
: 1,716 -632 6,719 -179 4,669 4,451 1,759 12,707 12,515: -281 -89
: Percent of Open Interest Represented by Each Category of Trader :
: 11.7 26.3 25.3 30.2 37.4 28.3 5.8 95.4 94.7: 4.6 5.3
: Total Traders: 313 Number of Traders in Each Category :
: 69 110 97 75 69 46 23 254 235:
——————————————————————————————————————-

FCOJ
General Comments: The charts show a big fall in prices came three months ago, when prices fell from a high above 5.50/gallon to just above 2.00 per gallon. Futures gave back in one month the vast majority of the rally seen in all of 2024. Selling seen last month took futures to the lows and tested some long term support areas on the monthly charts. Additional support is seen about every 25 cents lower on the charts, but we think prices could hold the 2.00 level if that area is tested again. Resistance is seen at 3.25.00/gallon tested last month, then 3.50 and above 4.00/gallon. Futures got very oversold on the test of 2.00/gallon but could test that level again before attempting much of a rally. The weekly charts show that the market is trying to establish a low, but the daily charts show a weak close on May 9 that could lead to that test of the lows in the market.
Overnight News: ICE said that 0 contracts were tendered for delivery against May futures and that total deliveries for the month are now 411 contracts.
Chart Trends: Trends in FCOJ are down. Support is at 212.00, 200.00, and 188.00 July, with resistance at 255.00, 265.00, and 275.00 July.

Disaggregated Commitments of Traders- Options and Futures Combined Positions as of May 6, 2025
: Reportable Positions :
:————————————————————————————————————- :
: Producer/Merchant : : : :
: Processor/User : Swap Dealers : Managed Money : Other Reportables :
: Long : Short : Long : Short :Spreading: Long : Short :Spreading: Long : Short :Spreading :
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FRZN CONCENTRATED ORANGE JUICE – ICE FUTURES U.S. (CONTRACTS OF 15,000 POUNDS) :
CFTC Code #040701 Open Interest is 12,497 :
: Positions :
: 3,699 6,463 463 6 147 1,944 1,199 9 1,912 65 2,645 :
: Changes from: April 29, 2025 :
: -287 -362 -13 -28 41 38 113 -1 9 4 93 :
: Percent of Open Interest Represented by Each Category of Trader :
: 29.6 51.7 3.7 0.1 1.2 15.6 9.6 0.1 15.3 0.5 21.2 :
: Number of Traders in Each Category Total Traders: 46 :
: 9 7 . . . 6 8 . 14 . 5 :
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COFFEE
General Comments: New York was higher, and London was lower last week in range trading as both search for directions in prices. Prices are still very high overall and reflect the report of tight supplies and the production concerns in Latin America for Arabica production. There are still ideas of good demand against ideas of less supplies available to the market. The lack of offers from Brazil continues even with the Robusta harvest started. Vietnam is done with its harvest. Hot and dry weather is in the forecast for Brazil longer term. CONAB has estimated that Coffee production is 55.7 million bags, a new record production. Arabica production is estimated down at 37 million bags, but Robusta production is estimated to be much higher at 18.7 million bags. It said exports in the last year were 11.7 million bags. Colombia produced 703,000 tons of Coffee in April, down 5% from the previous year.
Overnight News: The ICO average price is 347.22 ct/lb. ICE NY said that 13 contracts were tendered for delivery against May futures and that total deliveries for the month are now 406 contracts.
Chart Trends: Trends in New York are mixed. Support is at 380.00, 375.00, and 363.00 July, and resistance is at 397.00, 407.00 and 419.00 July. Trends in London are mixed. Support is at 4880, 4760, and 4640 July, with resistance at 5370, 5520, and 5550 July.

COT — Supplemental Report – Option and Futures Combined Positions as of May 06, 2025
: 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 193,741
: Positions :
: 38,295 8,502 56,471 47,984 114,337 42,042 7,835 184,792 187,145: 8,949 6,596
: Changes from: April 29, 2025 (Change in open interest: -3,195) :
: 8 -169 -1,243 442 -1,789 -1,792 228 -2,585 -2,972: -610 -223
: Percent of Open Interest Represented by Each Category of Trader :
: 19.8 4.4 29.1 24.8 59.0 21.7 4.0 95.4 96.6: 4.6 3.4
: Total Traders: 346 Number of Traders in Each Category :
: 102 64 106 86 109 46 18 283 264:
——————————————————————————————————————-

SUGAR
General Comments: Both markets were last week yesterday on speculative short covering, but ideas of good supplies and less demand continue. China has been a buyer with cheaper prices to help provide some support. Thai Sugar has moved to China lately and in volume. There were reports of some scattered showers in center south Brazil and reports that India will have comfortable beginning stocks to help cushion the blow from reduced production for the coming year. CONAB said that Brazil’s sugar output in the center-south region is expected to hit 41.8 million metric tons in the current 2025/26 season, up 3.7% from last year
Overnight News:
Chart Trends: Trends in New York are mixed to up. Support is at 1740, 720, and 1690 July and resistance is at 1820, 1850, and 1880 July. Trends in London are mixed to up. Support is at 493.00, 488.00, and 484.00 August, with resistance at 508.00, 513.00, and 521.00 August.

COT — Supplemental Report – Option and Futures Combined Positions as of May 06, 2025
: 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 928,094
: Positions :
: 102,807 154,616 191,750 342,977 461,936 227,230 52,810 864,764 861,112: 63,330 66,982
: Changes from: April 29, 2025 (Change in open interest: -8,254) :
: 1,916 10,457 5,164 -17,881 -34,373 -1,483 6,044 -12,283 -12,707: 4,029 4,452
: Percent of Open Interest Represented by Each Category of Trader :
: 11.1 16.7 20.7 37.0 49.8 24.5 5.7 93.2 92.8: 6.8 7.2
: Total Traders: 238 Number of Traders in Each Category :
: 54 57 77 74 71 37 19 208 184:
——————————————————————————————————————-

COCOA
General Comments: New York and London were higher last week despite reports of increased flows of Cocoa from Nigeria and reports of increased production potential in other countries outside of West Africa, including Asia and Central America. The market anticipates good demand and perhaps less production from Ivory Coast and Ghana. Trends are mixed in London and in New York but are trying to turn up even as demand ideas got hurt as the tariffs will increase costs to US buyers of chocolates. Demand ideas have been under pressure on the high prices currently seen for Cocoa due to bad production in West Africa. Cocoa imports are now subject to a 10% tariff at minimum.
Overnight News: ICE said that 3 contracts were posted for delivery against May futures and that total deliveries for the month are now 1,088 contracts.
Chart Trends: Trends in New York are mixed. Support is at 8900, 8400, and 8080 July, with resistance at 10080, 10450, and 10870 July. Trends in London are mixed. Support is at 6480, 6150, and 6050 July, with resistance at 7090, 6890, and 7090 July.

COT — Supplemental Report – Option and Futures Combined Positions as of May 06, 2025
: 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 117,735
: Positions :
: 14,661 9,019 35,773 39,934 58,291 17,775 9,281 108,142 112,364: 9,593 5,371
: Changes from: April 29, 2025 (Change in open interest: 101) :
: -835 -102 -230 662 453 647 10 243 130: -142 -29
: Percent of Open Interest Represented by Each Category of Trader :
: 12.5 7.7 30.4 33.9 49.5 15.1 7.9 91.9 95.4: 8.1 4.6
: Total Traders: 156 Number of Traders in Each Category :
: 54 31 60 33 32 29 13 141 114:
——————————————————————————————————————-

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