COTTON
General Comments: Futures traded lower initially in reaction to the USDA reports, but then recovered to close with small gains. It was not much of a reaction to the USDA reports, and the lack of movement implied that prices might be at a point where a range trade can develop. USDA raised yields, but lowered harvested acreage for an increase in overall production. Weather was a factor once again, with big rains in the Southeast threatening to damage Cotton there and reports of floods in Pakistan that could hurt Cotton there. However, USDA left its condition ratings unchanged in response to Hurricane Katia and Tropical Storm Lee, both of which could have easily damaged Cotton with open bolls if not more and possibly caused some yield losses. Texas remains hot and dry and as there has been adverse weather in parts of Asia this year. Chart trends are 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. Little rain is in the forecast for major Texas growing areas for the next week. Delta and Southeast areas should dry out after the storm over the weekend.
Overnight News: The Delta and Southeast will get mostly dry conditions, but showers are possible on Friday and Saturday. Temperatures will average near to below normal. Texas will be mostly dry, but showers are expected in northern areas Thursday and Friday. Temperatures will average near to below normal. The USDA average spot price is now 107.66 ct/lb. ICE said that certified Cotton stocks are now 0.019 million bales, from 0.019 million yesterday. India expects to produce 36.10 million bales of Cotton in 2011-12.
Chart Trends: Trends in Cotton are mixed to up with objectives of 120.00 and 134.00 October. Support is at 110.00, 107.00, and 105.00 October, with resistance of 114.00, 116.00, and 120.00 October.

09/12 15:00 CDT U.S. weekly crop progress highlights – USDA
WASHINGTON, Sept. 12 (Reuters) – Highlights of the U.S. Agriculture
Department’s weekly crop progress report (all numbers expressed in percent):

Week ended 09/11/11 09/04/11 09/11/10 5-year

COTTON CONDITION
– Excellent 4 4 14 N/A
– Good 24 24 45 N/A
– Fair 28 28 29 N/A
– Poor 19 19 9 N/A
– Very Poor 25 25 3 N/A
COTTON BOLLS OPEN 57 42 54 44
COTTON HARVESTED 9 7 8 7

DJ ICE Cotton Speculation And Hedging Report – Sep 12
For Sep 9 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 70,285 1,502 45.8 50,572 879 32.9
HEDGING
Total 83,235 286 54.2 102,948 244 67.1
GRAND TOTAL: 153,520 1,788 100.0 153,520 1,123 100.0

FCOJ
General Comments: Futures closed mostly a little higher in consolidation trading. The USDA reports were neutral to futures as no changes were made to the production last year. Most of the action was in spreads, with more traders moving out of September contracts and also selling November. Florida has had good weather so far this year with showers most days and warm temperatures, and there are no tropical systems in sight that look ready to move into the state. Charts show that trends are up again. 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 widely scattered showers and storms. Temperatures will average near normal. ICE said deliveries were 2 contracts today and now total 599 contracts for the month.
Chart Trends: Trends in FCOJ are up with objectives of 176.00 and 191.00 November. Support is at 165.00, 163.50, and 162.50 November, with resistance at 170.00, 173.00, and 175.00 November.

DJ ICE FCOJ Speculation And Hedging Report – Sep 12
For Sep 9 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 12,096 398 50.4 3,412 141 14.2
HEDGING
Total 11,914 101 49.6 20,598 55 85.8
GRAND TOTAL: 24,010 499 100.0 24,010 196 100.0

COFFEE
General Comments: Futures were a little higher in all markets in what appeared to be consolidation trading. It was a day of rest after the big crops on Friday. The lack of offer in physical markets is still important. In particular, Brazil producers are not selling. Differentials in all of Latin America remain strong. There is some fear there that the freezes seen a few weeks ago could have hurt flowering and will cut production potential, but we have heard that there was little or no damage done to flowers. Central America and Colombia can only sell new crop as the old crop appears sold out. Weather in Brazil is good at this time. 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 are turning mixed for the short term in all markets.
Overnight News: Certified stocks are higher today and are about 1.445 million bags. ICE said that deliveries were 0 contracts today and now total 140 contracts for the month. The ICO composite price is now 220.96 ct/lb. Brazil should see mostly dry weather. Temperatures will average above normal. CONAB said Brazil produced 43.15 million bags of Coffee in 2011.
Chart Trends: Trends in New York are down with no objectives. Support is at 265.00, 263.00, and 257.00 December, and resistance is at 273.00, 277.00, and 279.00 December. Trends in London are mixed. Support is at 2140, 2090, and 2055 November, and resistance is at 2210, 2235, and 2250 November. Trends in Sao Paulo are mixed to down with objectives of 347.00 and 330.00 December. Support is at 347.00, 338.00, and 330.00 December, and resistance is at 365.00, 367.00, and 377.00 December.

SUGAR
General Comments: Futures closed higher yesterday, with funds and end users said to be the best buyers. End users are said to be short supplies and were said to be lifting hedges. 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. Thailand has a lot for export as well. 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.
Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal. China produced 28,000 tons of Refined Sugar in August, up 115% from last year. Brazil Center-South Sugar production was 2.96 million tons for the second half of August.
Chart Trends: Trends in New York are mixed. Support is at 2730, 2720, and 2640 March, and resistance is at 2830, 2860, and 2930 March. Trends in London are mixed. Support is at 713.00, 700.00, and 699.00 December, and resistance is at 733.00, 750.00, and 751.00 December.

COCOA
General Comments: Futures were lower in New York and in London again yesterday on what was termed follow through speculative selling. Ideas of good supplies from Western Africa keep the selling pressure around. Trends are down 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. 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 4.048 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 down with objectives of 2790 December. Support is at 2850, 2830, and 2810 December, with resistance at 2900, 2920, and 2930 December. Trends in London are down with no objectives. Support is at 1840, 1830, and 1815 December, with resistance at 1890, 1920, and 1935 December.

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

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