COTTON
General Comments: Futures were lower in range trading again yesterday. Speculators were the best sellers as worries about the European debt crisis resurfaced and as traders worried about a contraction in the Chinese economy. Mills and other commercials provided the best buying support. Old crop Cotton has seen a lot of export sales cancellations in the past couple of months, and traders are worried that demand for the new crop will not be that strong, either. However, there is a lot of interest in owning Cotton on the commercial side below 100.00 basis futures. No one seems all that worried about production here or around the world. Chart trends are mixed for the short term, but charts present a weak appearance. Demand remains soft with a lot of export competition around. India has had a lot of Cotton to offer, but recent floods make it hard for Pakistan to talk of exports and easy for mills there to talk of new imports from India down the road. However, Chinese demand could start to increase soon and some of that demand would come to the US.
Overnight News: The Delta and Southeast will get mostly dry conditions. Temperatures will average above normal. Texas will be mostly dry, but showers are possible in western areas this weekend. Temperatures will average near to above normal. The USDA average spot price is now 94.65 ct/lb. ICE said that certified Cotton stocks are now 0.032 million bales, from 0.031 million yesterday. ICE said that 3 contracts were delivered today and that total deliveries are now 203 contracts for the month.
Chart Trends: Trends in Cotton are mixed to down with objectives of 95.00 December. Support is at 99.00, 95.00, and 94.00 December, with resistance of 103.00, 105.00, and 107.00 December.
10/03 15:00 CDT U.S. weekly crop progress highlights – USDA
WASHINGTON, Oct. 03 (Reuters) – Highlights of the U.S. Agriculture
Department’s weekly crop progress report (all numbers expressed in percent):
Week ended 10/02/11 09/25/11 10/02/10 5-year
COTTON CONDITION
– Excellent 4 4 13 N/A
– Good 25 25 43 N/A
– Fair 29 27 30 N/A
– Poor 19 19 10 N/A
– Very Poor 23 25 4 N/A
COTTON BOLLS OPEN 84 76 86 75
COTTON HARVESTED 16 13 23 18
DJ ICE Cotton Speculation And Hedging Report – Oct 3
For Sep 30 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 60,177 1,035 39.8 54,906 1,185 36.3
HEDGING
Total 90,897 268 60.2 96,168 255 63.7
GRAND TOTAL: 151,074 1,303 100.0 151,074 1,440 100.0
FCOJ
General Comments: Futures closed mixed to lower yesterday in response to negative Chinese and European economic ideas. Nearby months closed slightly higher on tight nearby supplies. Fears that both economies are contracting created selling in most commodities futures markets. Florida weather remains a negative for prices. The weather is good and there is no other news around. Florida has had good weather so far this year with showers most days and warm temperatures. This week should be mostly dry, and there are no tropical systems in sight. Prices appear to be in a range. Brazil is seeing warm temperatures. Rain should develop this week in Brazil.
Overnight News: Florida weather forecasts call for mostly dry conditions this week and showers this weekend. Temperatures will average near to above normal.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 147.50 November. Support is at 149.00, 145.00, and 143.00 November, with resistance at 155.00, 160.00, and 164.00 November.
COFFEE
General Comments: Futures were lower again yesterday on what appeared to be follow through fund selling tied mostly to ideas of weak world economic factors. In particular, Greece might fall into a morass and that has investors running for the hills. Futures still have to deal with a tight supply situation for the short term, and the possibility of less than expected Arabica Coffee produced over the next year. The lack of offer in physical markets is still important, with no one really selling that much. Differentials in all of Latin America remain strong. There is some fear there that the Brazil production will not be as big as some of the huge production estimates floating around. Some say Brazil could produce 60 million bags this year, but flowering has not started yet so it is hard to say exactly. Some rains are forecast for this week. Central America and Colombia are offering to sell new crop, although some end of the season old crop lots are showing up now. Good weather is reported in Mexico and Central America. Chart trends are mixed to down for the short term in all markets, and prices act as if they could work lower.
Overnight News: Certified stocks are unchanged today and are about 1.430 million bags. The ICO composite price is now 190.25 ct/lb. Brazil should see showers through this week and drier weather this weekend. Temperatures will average near normal.
Chart Trends: Trends in New York are down with objectives of 218.00 and 203.00 December. Support is at 220.00, 217.00, and 214.00 December, and resistance is at 229.00, 231.00, and 237.00 December. Trends in London are down with objectives of 1925 and 1790 November. Support is at 1910, 1860, and 1840 November, and resistance is at 1960, 2020, and 2030 November. Trends in Sao Paulo are mixed to down with objectives of 291.00 and 276.00 December. Support is at 295.00, 287.00, and 282.00 December, and resistance is at 304.00, 306.00, and 309.00 December.
SUGAR
General Comments: Futures closed lower again yesterday on what appeared to be fund selling tied to ideas of weakness in world economies, and especially Greece and the rest of Europe. Some chart analysts think that moves lower will be coming soon and the current move higher will only be a corrective rally. There are some reasons to think Sugar can hold in this area for at least the short term. India could produce less than expectations and that the export program will not be strong. Thailand has a lot for export as well, and Brazil is expected to be a strong producer next year after a disappointing year this year. Bears keep pointing to increased supplies around the world and no demand this year from India as reasons to see futures move lower over time. Northern hemisphere crops are coming soon and will help offset the smaller production in Brazil. Chart trends are mixed after the price action yesterday.
Overnight News: Showers are expected in Brazil through this week but it will de drier this weekend. Temperatures should be near normal. Australia now expects to produce 3.85 million tons of Sugar in 2011-12. Thiland could export 8.7 million tons of Sugar in 2011-12.
Chart Trends: Trends in New York are mixed. Support is at 2440, 2400, and 2350 March, and resistance is at 2540, 2640, and 2720 March. Trends in London are mixed to up with objectives of 681.00 December. Support is at 639.00, 625.00, and 620.00 December, and resistance is at 654.00, 675.00, and 677.00 December.
COCOA
General Comments: Futures were lower in New York and in London again yesterday on weakness seen in almost all commodities markets due to weakness in world economies, and especially those of Greece and the rest of Europe. Talk of over supply in the market for Cocoa still are keeping prices down overall, but futures have made new contract lows and might have already priced in the increased supplies for now. Trends are down on the charts. There is still no real reason to buy for now, but next year could be different as many analysts say that crop production potential in western Africa has been hurt by some poor weather seen in the last month. However, current supplies are ample and should help cover any short production potential for next year. Weather is called good for production in West Africa now.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near normal. ICE stocks are higher today and are now about 3.948 million bags. Ivory Coast has exported 1.065 million tons of Cocoa so far this year, from 872,620 tons last year. Products exports are 264,841 tons this year, from 314,465 tons last year.
Chart Trends: Trends in New York are down with objectives of 2500 and 2380 December. Support is at 2560, 2530, and 2500 December, with resistance at 2610, 2620, and 2710 December. Trends in London are down with objectives of 1620 and 1480 December. Support is at 1660, 1630, and 1600 December, with resistance at 1720, 1750, and 1760 December.
Questions? Ask Jack Scoville today at 312-264-4322
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