COTTON   

General Comments:  Cotton was higher yesterday on dry weather forecasts for the Great Plains.  Much of the western parts of the Great Plains have missed out on recent precipitation events and are likely to miss out again this week.  The US sold less than 130 million bales of Cotton for this and the next crop year combined in the weekly export sales report last week, so demand has dropped off.  USDA made no changes to the US ending stocks estimates or to the supply or demand side of the ledger.  It did increase world production and ending stocks levels so the report had a bearish component.  Production of the next US crop is at risk now.  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.

Overnight News:  The Delta and Southeast will get isolated to scattered showers and above normal temperatures.  Texas will have mostly dry conditions and above normal temperatures.  The USDA average price is now 131.72 ct/lb.  ICE said that certified stocks are now ,101 bales, from 144 bales yesterday.  USDA said that Cotton is now 8% planted, from 4% last week, 7% last year, and 7% average.

Chart Trends:  Trends in Cotton are mixed to down with objectives of 127.40 and 119.10 May.  Support is at 13160, 13040, and 12710 May, with resistance of 13690, 14070 and 14200 May.

Photo by Jason Leung on Unsplash

FCOJ

General Comments: FCOJ was higher yesterday as the rally to new contract highs continues. Trends are up on the daily charts.  The weather remains generally good for production around the world.  Brazil has some rain and conditions are rated very good but it is drier now and some tree stress could develop soon.  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.  Nielsen said that Orange Juice prices moved higher last month although lower volumes were sold.  USDA noted higher oranges production than last month, but still less than last year for the US at 3.79 million tons, but Florida production is down from last month and last year at 1.72 million tons.

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

Chart Trends:  Trends in FCOJ are up with no objectives.  Support is at 164.00, 161.00, and 157.00 May, with resistance at 175.00, 178.00, and 184.00 May.

COFFEE 

General Comments:  New York and London were both higher yesterday as deliveries from Brazil remain less than needed by the market and despite on ideas of less demand from Ukraine, Russia, and China.  Deliveries from Vietnam and Brazil Robusta are noted to be increasing but Robusta was following New York higher.  Selling has come from news that the Brazilian logistical problems are working themselves out and that deliveries are able to expand, but the strength in the Brazilian Real is keeping producers from offering right now.  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, but the market is still flush from Vietnamese selling seen earlier in the year.  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 a little lower today at 1.076 million bags.  The ICO daily average price is now 205.96 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 up with objectives of 237.00, 238.00, and 246.00 May.  Support is at 230.00, 225.00, and 221.00 May, and resistance is at 239.00, 242.00 and 245.00 May.  Trends in London are mixed to 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 lower 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.  Russia said it is still exporting from Black Sea ports.  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 but industry has said production could be up to 9.0 million.  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 2040, 2070, and 2100 July.  Trends in London are up with objectives of 555.00 August.  Support is at 541.00, 535.00, and 532.00 August and resistance is at 554.00, 560.00, and 566.00 August.

COCOA   

General Comments:  New York and London were higher again yesterday.  Daily chart trends are still mixed in New York but are up in London.  The moves are coming before the grind data for the first quarter is released.  The EU will release its data on Thursday while Asia and North America are expected to release grind data early next week,  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.  Demand fears remain 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 4.807 million bags.

Chart Trends:  Trends in New York are mixed.  Support is at 2580, 2490, and 2450 May, with resistance at 2650, 2680, and 2710 May.  Trends in London are up with objectives of 1840 May.  Support is at 1780, 1770, and 1740 May, with resistance at 1820, 1840, and 1850 May.