COTTON

General Comments: Futures traded lower initially in reaction to the USDA reports, but then recovered to close with small gains. The lack of movement implies that prices might be at a point where a range trade can develop. Weather was a factor once again, with big rains in the Southeast last week threatened to damage Cotton there and reports of floods in Pakistan that could hurt Cotton there. 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 with a lot of export competition around. Dry weather in Texas is less of a factor now that the harvest is moving forward, and Delta and Southeastern areas will welcome drier conditions although showers are in the forecast for later this week.

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 108.40 ct/lb. ICE said that certified Cotton stocks are now 0.021 million bales, from 0.019 million yesterday.

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.

FCOJ

General Comments: Futures closed a little lower in consolidation trading. The USDA reports were neutral to futures as no changes were made to the production last year. Traders are looking for news, but right now 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, 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 mixed. Support is at 165.00, 163.50, and 162.50 November, with resistance at 170.00, 173.00, and 175.00 November.

DJ Florida FCOJ Movement And Pack – Sep 13
In gallons. Source: Florida Department of Citrus (FDOC).
2010-2011
Sep 03 Aug 27 Year Ago
MOVEMENT
Retail 137,625 132,582 180,042
Institutional 342,536 391,085 380,532
Bulk 1,789,990 1,502,199 1,984,538
Total 2,270,152 2,025,866 2,545,112
Cumulative 140,975,015 138,704,863 120,220,468
IMPORTS
Foreign 470,917 8,025 398,483
Cumulative 16,673,261 16,202,344 21,322,893
RECEIPTS
Domestic 7,218 0 0
PACK
Retail 98,487 138,543 213,192
Institutional 327,662 516,657 405,229
Bulk 557,908 637,699 657,693
Less Reprocessed 984,057 1,292,900 1,276,113
Net 0 0 0
Cumulative 82,091,651 82,091,651 82,252,237
Inventory 57,417,048 59,097,642 104,364,781

COFFEE

General Comments: Futures were a little lower in all markets as traders talked about the European economic situation and demand fears. 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, but farmers there are worried about production potential for the coming year after a cold and dry Winter. 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 lower today and are about 1.442 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.

Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 268.00, 265.00, and 263.00 December, and resistance is at 274.00, 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 lower yesterday along with most other commodities markets. Traders were talking about the European crisis and less demand potential, but supplies and offers are likely to increase soon. 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.

Chart Trends: Trends in New York are mixed. Support is at 2730, 2720, and 2640 March, and resistance is at 2840, 2860, and 2930 March. Trends in London are mixed. Support is at 713.00, 700.00, and 699.00 December, and resistance is at 724.00, 733.00, and 750.00 December.

COCOA

General Comments: Futures were little changed in New York and in London yesterday in consolidation trading. 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 lower today and are now about 4.037 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 to 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 mixed to 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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