COTTON
General Comments: Futures closed a little higher yesterday on Hurricane Irene that may have hurt some crops and ideas that demand might improve soon after some better US and world economic data. The system hit North Carolina very hard with rains and wind and could have hurt Cotton grown in the state. Crop losses there are said to be significant for all crops in the path of the storm. Weather overall remains a supportive factor, as Texas remains hot and dry and as there has been adverse weather in parts of Asia this year. Chart trends are turning mixed for the short term. Demand remains soft. Countries like India are still offering Cotton at prices below those seen in the US, and the government is now allowing unrestricted exports for the next couple of months. Bad weather in the US is still around, with little rain in the forecast for major Texas growing areas for the next week.

Overnight News: The Delta and Southeast will get mostly dry conditions, but a few showers are possible. Temperatures will average above normal. Texas will be mostly dry, but some showers are possible in the Panhandle. Temperatures will average above to much above normal. The USDA average spot price is now 102.34 ct/lb. ICE said that certified Cotton stocks are now 0.015 million bales, from 0.015 million yesterday. The Indian Cotton Advisory Board now estimates 2011-12 production at 35.3 million bales and said exports could reach 7.0 million bales.

Chart Trends: Trends in Cotton are mixed to down with objectives of 100.00 and 95.00 October. Support is at 101.00, 100.00, and 99.00 October, with resistance of 105.00, 108.00, and 110.00 October.

U.S. Weekly Crop Progress Highlights — USDA
WASHINGTON, Aug. 29 (Reuters) — Highlights of the U.S. Agriculture
Department’s weekly crop progress report (all numbers expressed in percent):

Week ended 08/28/11 08/21/11 08/28/10 5-year

COTTON CONDITION
– Excellent 5 6 15 N/A
– Good 25 25 45 N/A
– Fair 29 28 28 N/A
– Poor 18 19 9 N/A
– Very Poor 23 22 3 N/A
COTTON SETTING BOLLS 96 94 96 94
COTTON BOLLS OPEN 27 16 28 23

DJ ICE Cotton Speculation And Hedging Report – Aug 29
For Aug 26 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 66,206 1,216 45.0 45,924 1,074 31.2
HEDGING
Total 80,781 284 55.0 101,063 255 68.8
GRAND TOTAL: 146,987 1,500 100.0 146,987 1,329 100.0

FCOJ
General Comments: Futures closed lower as the weekend hurricane did not hurt crops and as there are no storms coming for this week. Better economic data from the US and world economies did little to support FCOJ. Irene caused minimal damage to Oranges if any, and brought some welcome precipitation to many areas. Charts show that trends are down. There is not another tropical storm on tap for Florida for at least a week, but there is a system in the eastern Atlantic that could affect crops in about 10 days. Florida is once again mostly warm and is getting scattered showers. Brazil is seeing warm temperatures and mostly dry conditions.

Overnight News: Florida weather forecasts call for scattered showers and storms. Temperatures will average near to above normal.

Chart Trends: Trends in FCOJ are mixed. Support is at 165.00, 164.00, and 159.00 September, with resistance at 170.00, 174.00, and 177.00 September.

DJ ICE FCOJ Speculation And Hedging Report — Aug 29
For Aug 26 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 12,210 331 50.0 3,623 211 14.8
HEDGING
Total 12,200 113 50.0 20,787 50 85.2
GRAND TOTAL: 24,410 444 100.0 24,410 261 100.0

COFFEE
General Comments: Futures were higher on follow through speculative buying tied to ideas of short supplies and little offer from origin. In particular, Brazil producers are not selling and might be sold out. There is some fear there that the freezes seen a few weeks ago could have hurt flowering and will cut production potential. Speculators were the best players on both sides of the market. Industry and origin appeared to be quiet. Central America and Colombia can only sell new crop as the old crop appears sold out. Weather in Brazil is good at this time. It was too dry in Central America at flowering time, although there is plenty of rain now, and there are reports of too much rain in Colombia. Warm temperatures and dry conditions are likely into next week in Brazil. Better weather is reported in Mexico and Central America as rains are more like normal. Chart trends turned mixed for the short term in London, but remain generally up in New York and Sao Paulo.
Overnight News: Certified stocks are lower today and are about 1.468 million bags. ICE said that deliveries were 0 contracts today and now total 131 contracts for the month. The ICO composite price is now 230.50 ct/lb. Brazil should see mostly dry weather. Temperatures will average above normal.

Chart Trends: Trends in New York are up with no objectives. Support is at 281.00, 277.00, and 273.00 December, and resistance is at 284.00, 290.00, and 293.00 December. Trends in London are mixed. Support is at 2320, 2280, and 2230 November, and resistance is at 2420, 2430, and 2440 November. Trends in Sao Paulo are up with objectives of 372.00 and 408.00 December. Support is at 358.00, 356.00, and 347.00 December, and resistance is at 367.00, 373.00, and 377.00 December.

SUGAR
General Comments: Futures closed lower in New York and were closed in London yesterday. It was a quiet market, with many traders away from desks in New York in the aftermath of Hurricane Irene and with London closed for a bank holiday. Reports that the crop in Brazil might get smaller provided more support, but seems played out as the market driver for now. Brazil lost Sugar production potential this year due to poor weather, but production in other parts of the world seems strong. Traders are watching to see how much more Sugar India is willing to export, and how much China might need to buy to keep prices there from spinning out of control.. Prices there are very high and supplies are thin in the domestic market. 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. Chart trends turned down with the price action last week.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal. India said that the September open market sales quota will be 1.7 million tons. Russia has now produced 251,600 tons of Sugar from beets this year. Brazil expects to produce 37 million tons of Sugar in 2011-12. Tanzania will import 50,000 tons of Sugar to offset supply shortages in domestic markets.

Chart Trends: Trends in New York are mixed to down with objectives of 2820 October. Support is at 2950, 2930, and 2910 October, and resistance is at 3025, 3060, and 3140 October. Trends in London are mixed to down with objectives of 742.00 and 703.00 October. Support is at 761.00, 758.00, and 748.00 October, and resistance is at 787.00, 797.00, and 801.00 October.

COCOA
General Comments: Futures were higher in New York and closed in London on what appeared to be some speculative buying tied as much to ideas that the market is bottoming than anything else. Ideas of good supplies from Western Africa keep the selling pressure around, but the region is now between harvests so offers are less. Trends are trying to turn up on the charts. For now there is still no real reason to buy except for a temporary shortage as farmers in many countries wait for prices to rally. 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..
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near normal. ICE stocks are lower today and are now about 3.924 million bags. ICE said that Cocoa deliveries are 0 contracts today and now total 2 contracts for the month.

Chart Trends: Trends in New York are mixed. Support is at 3090, 3050, and 3010 December, with resistance at 3150, 3180, and 3240 December. Trends in London are mixed. Support is at 1920, 1890, and 1855 December, with resistance at 1975, 1990, and 2005 December.

Questions? Ask Jack Scoville today at 312-264-4322

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