COTTON

General Comments: Futures closed sharply lower to limit down on follow through speculative selling. Traders were worried once again about the Greek and European debt crisis and what it could do to demand. China continues to cancel purchases, and this loss of demand is coming at a time of less production in the US The lost demand will hurt any rally attempts now even with less production here. Weather was a factor once again, but this influence is fading as the harvest expands in the US. Howevedr, wire reports this morning suggest that Pakistan has lost 2.0 million bales of Cotton this year due to floods and ould be an importer again this year. Chart trends are turning down for the short term with the price action yesterday. Demand remains soft with a lot of export competition around. However, Chinese demand could start to increase soon as the government there is releasing new low tariff import quotas. 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 this week.

Overnight News: The Delta and Southeast will get mostly dry conditions, but showers are possible today and Thursday. Temperatures will trend to near to above normal this week, but near to below normal on Friday. Texas will be mostly dry, but some rain is possible on Thursday. Temperatures will average near to below normal, then near to above normal this weekend. The USDA average spot price is now 100.59 ct/lb. ICE said that certified Cotton stocks are now 0.029 million bales, from 0.029 million yesterday.

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 110.00, 114.00, and 116.00 October.

U.S. Weekly Crop Progress Highlights – USDA
WASHINGTON, Sept. 19 (Reuters) – Highlights of the U.S. Agriculture
Department’s weekly crop progress report (all numbers expressed in percent):

Week ended 09/18/11 09/11/11 09/18/10 5-year

COTTON CONDITION
– Excellent 4 4 14 N/A
– Good 23 24 44 N/A
– Fair 28 28 29 N/A
– Poor 20 19 9 N/A
– Very Poor 25 25 4 N/A
COTTON BOLLS OPEN 69 57 66 54
COTTON HARVESTED 11 9 12 10

FCOJ

General Comments: Futures closed little changed in very quiet trading again yesterday. 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 prices appear to be in a range. Florida has seen scattered showers and storms and warm temperatures, and there are no tropical systems in sight that look ready to move into the state. 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 0 contracts today and now total 599 contracts for the month.

Chart Trends: Trends in FCOJ are mixed. Support is at 160.00, 159.00, and 155.00 November, with resistance at 165.00, 167.00, and 168.50 November.

DJ ICE FCOJ Speculation And Hedging Report – Sep 19
For Sep 16 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 12,172 361 51.1 3,259 188 13.7
HEDGING
Total 11,644 88 48.9 20,557 57 86.3
GRAND TOTAL: 23,816 449 100.0 23,816 245 100.0

COFFEE

General Comments: Futures were mostly higher in all markets yesterday in what appeared to be recovery trading. London rallied on follow through buying on news that Vietnam would stockpile 43,000 tons of Coffee in the country to support world prices. 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 Brazil production will not be as big as some of the huge production estimates floating around. Some say Brazil could produce 60 million bags this year. Producers there remain concerned due to a cold and dry Winter until now. 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 little changed today and are about 1.446 million bags. ICE said that deliveries were 28 contracts today and now total 408 contracts for the month. The ICO composite price is now 214.71 ct/lb. Brazil should see mostly dry weather this week and some rain this weekend. Temperatures will average above normal.

Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 256.00, 252.00, and 249.50 December, and resistance is at 265.00, 268.00, and 274.00 December. Trends in London are mixed. Support is at 2090, 2055, and 2030 November, and resistance is at 2140, 2210, and 2220 November. Trends in Sao Paulo are mixed to down with objectives of 330.00 December. Support is at 338.00, 330.00, and 323.00 December, and resistance is at 347.00, 356.00, and 358.00 December.

SUGAR

General Comments: Futures closed higher yesterday in recovery trading. Traders were talking about the European crisis and less demand potential, and supplies and offers are likely to increase soon. China is said to need to import 1.0 million tons this year, but it looks like there will be more than enough Sugar to fill the order. On the other hand, some say that India will 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. Some talk was seen on the wires that a lack of investment in production in Brazil could keep production there down for the next few seasons. Chart trends are still down after the price action on Friday.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal. India said it will keep limits for storage of Sugar at 500 tons for another two months in an effort to control inflation.

Chart Trends: Trends in New York are down with objectives of 2550 March. Support is at 2610, 2560, and 2540 March, and resistance is at 2720, 2730, and 2840 March. Trends in London are down with objectives of 655.00 December. Support is at 680.00, 677.00, and 675.00 December, and resistance is at 699.00, 700.00, and 713.00 December.

COCOA

General Comments: Futures were lower in New York and in London again yesterday as Cocoa keeps flowing and as end users seem to be covered. Origin was said to be the best seller. 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 4.002 million bags. ICE said that Cocoa deliveries are 0 contracts today and now total 13 contracts for the month. Ivory Coast purchases are now 1.416 million tons this year.

Chart Trends: Trends in New York are down with no objectives. Support is at 2685, 2650, and 2620 December, with resistance at 2740, 2790, and 2830 December. Trends in London are down with no objectives. Support is at 1750, 1720, and 1700 December, with resistance at 1800, 1815, and 1830 December.

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

Free – Subscribe to receive Weekly Newsletters via Email