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Cotton

General Comments: Cotton was lower yesterday on weaker export sales. There was talk about less demand for the market in part from Fed moves to control the inflation now seen in the US and around the world. Traders are getting worried about a potential recession caused by Fed tightening. China has been buying even with the port closures and domestic difficulties caused by renewed Covid lockdowns. Traders are worried about Chinese demand moving forward. China has closed two ports for imports due to Covid and is also closing down a number of cities as the Covid spreads through the nation. Shanghai has asked office workers to follow a hybrid model used here in the US and is closing financial markets.

Overnight News: The Delta and Southeast will get mostly dry conditions and below normal temperatures. Texas will have mostly dry conditions and below normal temperatures. The USDA average price is now 129.63 ct/lb. ICE said that certified stocks are now 144 bales, from 144 bales yesterday.

Chart Trends: Trends in Cotton are mixed to down with objectives of 127.40 and 119.10 May. Support is at 13290, 13040, and 12710 May, with resistance of 13690, 14070 and 14200 May.

FCOJ

General Comments: FCOJ was higher yesterday on what was called speculative buying. The weather remains generally good for production around the world. Brazil has some rain and conditions are rated very good. Weather conditions in Florida are rated mostly good for the crops with some showers and warm temperatures. Florida Mutual said that FCOJ inventories are now 32% less than last year.

Overnight News: Florida should get mostly dry conditions. Temperatures will average near to below normal.   Brazil should get isolated showers and near normal temperatures.

Chart Trends: Trends in FCOJ are up with objectives of 165.00 May. Support is at 161.00, 157.00, and 154.00 May, with resistance at 164.00, 166.00, and 169.00 May.

Coffee

General Comments: Both markets closed lower on ideas of less demand from Ukraine, Russia, and China as deliveries from Vietnam and Brazil are noted to be increasing. Selling has come from news that the Brazilian logistical problems are working themselves out and that deliveries are able to expand. The funds have been the best sellers. The war is causing ideas of less Russian and Uranian demand and the return of Covid has the potential to really hurt Chinese demand as cities and ports have shut down there. Less deliveries are reported from Vietnam now as producers have sold most of the crop and are holding the rest and waiting for higher prices. Good growing conditions for the next crop in Brazil are still around but flowering is reported to be uneven this year in at least some areas. Vietnam exported 581,693 tons of coffee in the first quarter, up 28.3% from the same period a year earlier. IBGE said that Brazil’s coffee production this year is seen at 56.1 million 60-kg bags, up 0.9% from a previous projection. 

Overnight News: ICE certified stocks are lower today at 1.080 million bags. The ICO daily average price is now 198.44 ct/lb. Brazil will get isolated showers with near to above normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers

Chart Trends: Trends in New York are mixed. Support is at 225.00, 221.00, and 217.00 May, and resistance is at 232.00, 236.00 and 239.00 May. Trends in London are down with objectives of 2040 and 1970 May.   Support is at 2060, 2010, and 2000 May, and resistance is at 2120, 2150, and 2180 May.

Sugar

General Comments: Both markets were higher yesterday and continue to follow world petroleum prices as much as anything. The US government has proposed to open the reserve in an effort to lower petroleum prices here and this affected Sugar due to the potential for reduced ethanol demand from the lower prices. Russia has left a trail of atrocities in its withdrawal from Kiev and other cities in Ukraine. News reports indicate that little export activity is taking place from Ukraine with the ports basically closed. India has signed contracts to export 7.2 million tons of White Sugar so far this year. The government there is contemplating a cap of 8.0 million tons this year. India and Thailand expect improved crops this year. Thailand expects to produce about10 million tons of sugar this year, up 33% from last year. Brazil could also have better Sugarcane production this year but the strengthening Real implies that most of the refining will be for Ethanol and not Sugar.

Overnight News: Brazil will get isolated showers. Temperatures should average near to above normal. India will get isolated showers and near to above normal temperatures.

Chart Trends: Trends in New York are up with objectives of 2030 and 2100 July. Support is at 1960, 1930, and 1910 July and resistance is at 1980, 2010, and 2040 July. Trends in London are mixed to up with objectives of 545.00 and 555.00 August. Support is at 532.00, 526.00, and 524.00 August and resistance is at 544.00, 548.00, and 554.00 August.

Cocoa  

General Comments: New York and London were higher again yesterday. The weather is good for harvest activities in West Africa but some are concerned about dry weather that could affect the yields for the midcrop harvest. Some showers are in the forecast for West Africa and have been for several weeks, but the precipitation was less than normal last week. Farmers there say that soil moisture conditions are good for the midcrop, but there are concerns that conditions are too dry overall for the best yields. Chart trends are sideways now despite improved crop conditions and in part despite demand fears as Europe is the leading per capita consumer of Chocolate and demand could drop if the war in Ukraine expands or even if it doesn’t. Demand fears have eased as the rest of Europe is not harmed yet. The weather is good in Southeast Asia. Ghana arrivals have been below year ago levels but Ivory Coast arrivals are ahead of last year. Ghana cocoa arrivals since October 1 are 524,000 tons by March 31, down 34% from 791,000 tons in the same period in the previous season.

Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near to above normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal. Brazil will get scattered showers and near to above normal temperatures. ICE certified stocks are higher today at 4.742 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2580, 2490, and 2450 May, with resistance at 2610, 2650, and 2680 May. Trends in London are mixed. Support is at 1740, 1710, and 1700 May, with resistance at 1770, 1790, and 1810 May.