Softs Report 03/04/2025

COTTON
General Comments: Cotton was higher yesterday despite the threat of tariffs on China and others threats that could kill demand. The US Dollar was lower, and Crude Oil futures have been weaker. Selling has come from news that Trump will impose some big tariffs on China, as soon as today 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 down. Support is at 65.20, 64.60, and 64.00 May, with resistance of 66.60, 67.00 and 68.00 May.

FCOJ
General Comments: FCOJ closed higher yesterday on reports of dry weather in Florida and in Mexico. 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 Support is at 302.00, 295.00, and 280.00 May, with resistance at 328.00, 341.00, and 358.00 May.

COFFEE
General Comments: New York and London were higher yesterday on doubts about the production in Brazil and and the lack of offers from Brazil. 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. 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 351.76 ct/lb.
Chart Trends: Trends in New York are mixed. Support is at 377.00, 367.00, and 359.00 May, and resistance is at 394.00, 402.00 and 410.00 May. Trends in London are mixed to up. Support is at 5280, 5230, and 5000 May, with resistance at 5540, 5620, and 5740 May.

SUGAR
General Comments: New York and London were lower yesterday as the short covering rally continued. 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 1810, 1780, and 1740 May and resistance is at 1880, 1900, and 1940 May. Trends in London are down. Support is at 519.00, 510.00, and 501.00 May, with resistance at 540.00, 550.00, and 553.00 March.

COCOA
General Comments: New York and London closed lower yesterday on speculative long liquidation. 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 down. Support is at 7680, 6670, and 6570 May, with resistance at 8770, 9180, and 9140 May. Trends in London are down. Support is at 6090, 5600, and 5290 May, with resistance at 7050, 7400, and 7620 May.

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