COTTON
General Comments: Futures were sharply higher in range trading again yesterday. Speculators and commercials were the best buyers. Commercial buying seems to show on any drop in futures prices these days. 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, so demand is out there. No one seems all that worried about production here or around the world. Chart trends are mixed for the short term, but price action yesterday could be a sign that the market has bottomed or could bottom soon. 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 97.34 ct/lb. ICE said that certified Cotton stocks are now 0.032 million bales, from 0.032 million yesterday. ICE said that 0 contracts were delivered today and that total deliveries are now 203 contracts for the month.
Chart Trends: Trends in Cotton are mixed. Support is at 99.00, 95.00, and 94.00 December, with resistance of 103.00, 105.00, and 107.00 December.
FCOJ
General Comments: Futures closed higher yesterday. Nearby months closed higher on tight nearby supplies. Fears that world economies are contracting created selling in most commodities futures markets, but commodities rallied after the Bernacke speech to Congress. 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.
DJ Florida FCOJ Movement And Pack – Oct 4
In gallons. Source: Florida Department of Citrus (FDOC).
2010-2011
Sep 24 Sep 17 Year Ago
MOVEMENT
Retail 142,487 134,042 318,928
Institutional 346,006 290,948 322,309
Bulk 1,381,058 1,533,725 2,016,430
Total 1,869,551 1,958,714 2,657,667
Cumulative 146,709,320 144,839,770 127,824,401
IMPORTS
Foreign 0 0 398,426
Cumulative 18,320,310 18,320,310 21,929,687
RECEIPTS
Domestic 0 0 4,520
PACK
Retail 145,483 152,657 241,427
Institutional 296,138 287,762 250,084
Bulk 561,118 524,668 565,584
Less Reprocessed 1,002,739 965,087 1,057,096
Net 0 0 0
Cumulative 82,091,651 82,091,651 82,252,237
Inventory 53,137,876 55,169,228 97,336,813
COFFEE
General Comments: Futures were higher yesterday on speculative short covering that found almost nothing from other speculators or from origin on offer. 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, which range as high as 60 million bags. Some rains are forecast for this week in Brazil. 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 for the short term in all markets.
Overnight News: Certified stocks are a little lower today and are about 1.430 million bags. The ICO composite price is now 190.77 ct/lb. Brazil should see showers through this week and drier weather this weekend. Temperatures will average near normal. Honduras exported 3.87 million bags of Coffee in 2010-11, up 225 from the previous year.
Chart Trends: Trends in New York are mixed to 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 231.00, 237.00, and 240.50 December. Trends in London are mixed. Support is at 1960, 1945, and 1930 November, and resistance is at 2020, 2030, and 2050 November. Trends in Sao Paulo are mixed. Support is at 297.00, 295.00, and 287.00 December, and resistance is at 309.00, 320.00, and 327.00 December.
SUGAR
General Comments: Futures closed lower again yesterday on what appeared to be speculator selling tied to ideas of weakness in world economies, and especially Greece and the rest of Europe. There are some reasons to think Sugar can hold in this area for at least the short term. Demand has increased from Middle East and Asia. 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. Europe is said to have very good crops this year, and Russia could export for the first time in 12 years Chart trends are mixed.
Overnight News: Showers are expected in Brazil through this week but it will de drier this weekend. Temperatures should be near normal. Russia has produced 1.416 million tons of Sugar from beets so far this year.
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 higher in New York and in London yesterday in recovery trading. Sources report that a lot of bullish options trading was seen and could have sparked the rally. This type of trading led to ideas of fund or trade buying, and this could have been the case as both sectors like to adjust options positions before moving to futures at major points. 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 3.967 million bags.
Chart Trends: Trends in New York are down with objectives of 2500 and 2380 December. Support is at 2560, 2540, and 2530 December, with resistance at 2620, 2640, and 2720 December. Trends in London are down with objectives of 1620 and 1480 December. Support is at 1690, 1660, and 1630 December, with resistance at 1720, 1750, and 1760 December.
Questions? Ask Jack Scoville today at 312-264-4322
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