COTTON        

General Comments: Cotton futures closed higher despite ideas of Chinese import problems and despite the Russian invasion of Ukraine continued and as shipments of Crude Oil and products from Russia were interrupted.  That means higher Crude Oil prices and higher polyester prices for the world.  The ongoing peace talks between the two sides are making slow progress much to the cheer of the rest of the world.    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.  However, Shanghai said it would stay open and asked office workers to follow a hybrid model used here in the US.  The US Dollar has been moving higher in the past week due to the war and the stock market has worked lower.  Short term trends are still sideways.

Overnight News:  The Delta and Southeast will get mostly dry conditions and near to above normal temperatures.  Texas will have mostly dry conditions and near to below normal temperatures.  The USDA average price is now 117.66 ct/lb.  ICE said that certified stocks are now 572 bales, from 572 bales yesterday.   ICE NY said that 0 notices were posted against March contracts and that total deliveries for the month are now 0 contracts.  USDA said that weekly net Upland Cotton export sales were 371,400 bales this year and 49,000 bales net year.  Net Pima sales were 12,300 bales this year and 1,300 bales next year.

Chart Trends:  Trends in Cotton are mixed.  Support is at 11710, 11670, and 11540 May, with resistance of 12170, 12310, and 12450 May.

Photo by Trisha Downing on Unsplash

FCOJ 

General Comments: FCOJ was higher again yesterday on lower US production estimates and less FCOJ in storage.  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 a couple of showers and warm temperatures.  Mexican crop conditions in central and southern areas are called good with rains. Northern and western Mexico is rated in good condition.  Florida Mutual said that FCOJ inventories are now 30% less than last year in its latest Movement and Pack report.

Overnight News:  Florida should get scattered showers.  Temperatures will average above normal.   Brazil should get scattered showers and near normal temperatures.   ICE said that 0 notices were posted for delivery against March contracts and that total deliveries for the month are now 0 contracts.

Chart Trends:  Trends in FCOJ are mixed.  Support is at 140.00, 138.00, and 134.00 May, with resistance at 144.00, 146.00, and 151.00 May.

COFFEE   

General Comments: Both markets were higher yesterday as the US Dollar moved lower.  The Russian invasion of Ukraine continued and caused a lot of concern about demand for Coffee in the world in the future.  However, the two sides are talking and are apparently inching to an agreement and the market has relaxed its selling pressure in Coffee.  Good growing conditions for the next crop in Brazil were also noted as a reason to sell.  Coffee prices have been negatively affected, but most other agricultural futures are higher to sharply higher due to the war.  The logistical and production problems in Brazil are still around.  The dry weather and then the freeze in Brazil have created a lot of problems for the trees to form cherries this year.  Containers are not available in Brazil to ship the Coffee.

Overnight News: ICE-certified stocks are higher today at 1.060 million bags.  GCA stocks are now 5.765 million bags, rom 5.795 million last month.  The ICO daily average price is now 191.41 ct/lb.  Brazil will get isolated showers with near to above normal temperatures.  Central America will get scattered showers.  Vietnam will see scattered showers.  ICE NY said that 419 contracts were tendered against delivery of March contracts and that total deliveries for the month are now 721 contracts.

Chart Trends:  Trends in New York are mixed to down with objectives of 206.00 and 191.00 May.  Support is at 210.00, 207.00, and 203.00 May, and resistance is at 221.00, 228.00 and 231.00 May.  Trends in London are mixed.   Support is at 2110, 2060, and 2040 May, and resistance is at 2160, 2200, and 2220 May[JS1].

DJ Brazil 2022 Coffee Crop Could Reach 61.1M Bags — Market Talk 

 0849 ET – Brazil’s coffee crop in 2022 should reach 61.1 million 132-pound bags, which would be a decline of 12% from the record 2020 crop, according to agricultural consultancy Safras & Mercado. Brazil has a two-year coffee-growing cycle, with bigger crops in even-numbered years and smaller crops in odd-numbered years, so a comparison to the crop from two years earlier makes more sense to judge the progress of production. The decline in production from 2020 is due to a drought and some frosts that hit coffee-growing areas last year, Safras said. The arabica variety of coffee is more susceptible to bad weather, and production in 2022 will decline 23% from 2020 to 38.8 million bags, Safras said. Brazil’s crop of the robusta variety will be 22.3 million bags, compared to 19.4 million bags in 2020, the consultancy said. (jeffrey.lewis@wsj.com)

SUGAR                 

General Comments:  New York and London were lower yesterday despite news from Brazil of reduced processing of cane and mills producing only ethanol and no Sugar and in reaction to the Russian invasion of Ukraine and the potential for the west to cut off Crude Oil exports from Russia.  Current peace talks between Russia and Ukraine are yielding at least slow progress and that kept Crude Oil under pressure and increased the selling interest in Sugar at least a little bit.  Plenty of White Sugar is available from India and Thailand, and India said its export pace is above that of a year ago.  Exports are expected to be 7.5 million tons this year, from 7.3 million last year.  President Biden indicated last week that Russian energy imports would be curtailed due to the war.  The daily charts show that price trends are down for both markets.  News reports indicate that little export activity is taking place from Ukraine or Russia with the Black Sea and Azov Sea ports basically closed.  Some of the oil giants have pulled operations out of Russia in response to the war, but others are still working there.

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

Chart Trends: Trends in New York are down with objectives of 1800 and 1700 May.  Support is at 1850, 1840, and 1810 May and resistance is at 1900, 1920, and 1950 May.  Trends in London are mixed to down with objectives of 500.00 and 472.00 May.  Support is at 518.00, 510.00, and 507.00 May and resistance is at 532.00, 538.00, and 548.00 May.

COCOA                                                                                   

General Comments: New York closed higher and London closed lower in currency-related spreading.  Chart trends remain down as showers have returned to West Africa to improve crop conditions and in part because of 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 a bit as both sides in the conflict report slow progress at peace talks, but progress has been made.  The weather is generally too dry for West Africa and good in Southeast Asia.  The dry conditions in West Africa are now disappearing due to scattered showers in the region.  Ideas are that demand will only improve slightly if at all and production in West Africa appears to be good this year.  Cocoa arrivals in Ivory Coast are now 1.618 million tons, up 1.4% from last year.

Overnight News:  Isolated showers are forecast for West Africa.  Temperatures will be near to above normal.  Malaysia and Indonesia should see showers.  Temperatures should average above normal.  Brazil will get mostly dry conditions and near to above normal temperatures. ICE-certified stocks are a little higher today at 4.665 million bags.  ICE NY said that 0 contracts were delivered against March delivery and that total deliveries for the month are now 751 contracts.

Chart Trends:  Trends in New York are down with objectives of 2500 and 2390 May.  Support is at 2500, 2470, and 2430 May, with resistance at 2610, 2650, and 2670 May.  Trends in London are down with objectives of 1160 May.  Support is at 1710, 1680, and 1670 May, with resistance at 1740, 1760, and 1780 May.