Morning Softs 11/14/11

COTTON
General Comments: Futures were a little lower Friday in consolidation trading. The most important feature of the trade was in the spreads, where December traded at a premium to March despite the index fund roll. Speculators were seen as the best buyers, but mills were active buyers as well and are thought to be preparing to take delivery of receipts when deliveries start in the next couple of weeks. The situation in Europe still has traders nervous, and any loss of demand will hurt futures and kept traders from doing much overall. The USDA reports issued last week have been supportive to futures as well. The harvest is still moving forward in Texas and weather there remains mostly dry. Chart trends are mixed.
Overnight News: The Delta and Southeast will get showers tomorrow and Wednesday, then dry conditions. Temperatures will average near to below normal. Texas will be mostly dry. Temperatures will average near to below normal, then above normal on Friday. The USDA average spot price is now 96.89 ct/lb. ICE said that certified Cotton stocks are now 0.045 million bales, from 0.037 million yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 98.00, 95.00, and 94.00 December, with resistance of 100.00, 103.00, and 105.00 December.

FCOJ
General Comments: Futures closed a little lower Friday after a quiet session. Charts show that the market may have failed at resistance areas last week, so speculators are liquidating longs and some producers are selling. The tropics are mostly quiet now, and the threat to Florida is passing as the hurricane season comes to a close. But, there is still potential for a storm to develop based on climatology. Florida weather remains a negative for prices for now. Florida has had good weather so far this year with showers most days and warm temperatures. This week and this weekend should see mostly dry weather. Early harvest is continuing. Trends are mixed on the charts. Brazil is seeing warm temperatures. Dry weather is seen through this weekend for Brazil.
Overnight News: Florida weather forecasts call for mostly dry weather, although showers are possible on Thursday. Temperatures will average near to above normal. ICE said that 0 contracts were delivered today and that total deliveries for the month are 3 contracts.
Chart Trends: Trends in FCOJ are mixed. Support is at 167.00, 166.00, and 163.00 January, with resistance at 173.00, 175.00, and 176.00 January.

COFFEE
General Comments: Futures were higher Friday as traders reacted to a lower US Dollar. There was little interest seen from origin or from industry. There was no real news for Coffee or about MF Global during the session, but traders continued to worry about the European situation, and now about Italy more than anywhere else. Loss reports from Central America are coming in from the rains in recent weeks, and lower production is expected from Colombia as well. The potential for big crops in Vietnam and Brazil later on keep many traders bearish about prices next year. Scattered showers are forecast for Brazil this week, but it remains drier than normal and dryness now would hurt flowering and cherry formation. Drier weather is also reported in Vietnam, which is good for harvest. 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. Differentials in all of Latin America remain strong. Central America and Colombia are offering to sell new crop with high differentials.
Overnight News: Certified stocks are higher today and are about 1.345 million bags. The ICO composite price is now 196.19 ct/lb. Brazil should see scattered showers today and tomorrow, then mostly dry conditions. Temperatures will average near to below normal. Colombia produced 656,000 bags of Coffee in October, down 19% from last year. Exports were 582,000 bags, down 6% from last year.
Chart Trends: Trends in New York are mixed. Support is at 231.00, 228.00, and 225.00 December, and resistance is at 237.00, 241.00, and 243.00 December. Trends in London are mixed. Support is at 1840, 1800, and 1790 January, and resistance is at 1900, 1915, and 1950 January. Trends in Sao Paulo are mixed. Support is at 318.00, 316.00, and 313.00 December, and resistance is at 326.00, 333.00, and 335.00 December.

SUGAR
General Comments: Futures closed lower Friday on ideas that good weather in Russia was helping yields and harvest and on some ideas that India could allow another 1.0 million tons of exports in government meetings this week. The European crisis and the problems at MF Global continued to reduce trading interest overall. Speculators appeared to be on both sides of the market, and commercials were said to be quiet. Supply side fundamentals for Sugar remain weak, and end users do not seem interested in buying right now. India is still offering and expects to sell more as the country tries to work off surplus production and stocks. There were some flooding rains in Thailand in recent weeks. Reports are that losses are minor and most of the problems will be due to delayed crushing and deliveries rather than to crop losses. Bears keep pointing to increased supplies around the world as reasons to keep the selling pressure on. Northern hemisphere crops are coming now, and Europe and Russia are said to have very good crops this year.
Overnight News: Mostly dry conditions or light showers are expected in Brazil after beneficial precipitation today and tomorrow. Temperatures should be near to below normal. Russia now says it will produce 5.5 million tons of Sugar from beets on production of 48 million tons of Beets. It expects to import no more Sugar this year and expects a surplus of up to 150,000 tons of White Sugar for export.
Chart Trends: Trends in New York are down with objectives of 2450 and 2370 March. Support is at 2480, 2440, and 2400 March, and resistance is at 2540, 2610, and 2630 March. Trends in London are down with objectives of 635.00 and 619.00 March. Support is at 636.00, 625.00, and 623.00 March, and resistance is at 643.00, 646.00, and 649.00 March.

COCOA
General Comments: Futures were lower again in New York and in London Friday on what appeared to be speculative long liquidation tied to the strong rally in the US Dollar and the meltdown fears about Europe. Talk of oversupply in the market for Cocoa still are keeping prices down overall, but seems to have run out as a market force as arrivals from farmers have been slow. However, there were reports of increasing arrivals last week 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: Widely scattered showers are expected in West Africa. Temperatures will average near normal. ICE said that Cocoa stocks were lower today and now 3.612 million bags.
Chart Trends: Trends in New York are down with objectives of 2450 and 2370 December. Support is at 2480, 2440, and 2400 December, with resistance at 2540, 2610, and 2620 December. Trends in London are down with objectives of 1480 December. Support is at 1570, 1540, and 1510 December, with resistance at 1630, 1650, and 1660 December.

Questions Ask Jack Scoville today at 312-264-4322

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