COTTON

General Comments: Futures were a little lower in consolidation trading yesterday. Speculators were the best sellers and commercials were the best buyers. Speculators were worried once again about the Greek and European debt crisis and what it could do to demand, and commercials took advantage to get some buying done for the short crop. No one seems all that worried about production here or around the world as it seems that world economies remain in trouble. Chart trends are turning down for the short term with the price action last week. Demand remains soft with a lot of export competition around. However, Chinese demand could start to increase soon. 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.

Overnight News: The Delta and Southeast will get mostly dry conditions, but showers are possible in eastern and southern areas today. Temperatures will average near to above normal. Texas will be mostly dry. Temperatures will average above normal. The USDA average spot price is now 94.81 ct/lb. ICE said that certified Cotton stocks are now 0.029 million bales, from 0.029 million yesterday. ICE said that 141 contracts were delivered today and that total deliveries are now 171 contracts for the month.

Chart Trends: Trends in Cotton are mixed to down with objectives of 95.00 December. Support is at 99.00, 95.00, and 94.00 December, with resistance of 105.00, 107.00, and 110.00 December.

09/26 15:00 CDT U.S. weekly crop progress highlights – USDA
WASHINGTON, Sept. 26 (Reuters) – Highlights of the U.S. Agriculture
Department’s weekly crop progress report (all numbers expressed in percent):

Week ended 09/25/11 09/18/11 09/25/10 5-year

COTTON CONDITION
– Excellent 4 4 14 N/A
– Good 25 23 41 N/A
– Fair 27 28 31 N/A
– Poor 19 20 10 N/A
– Very Poor 25 25 4 N/A
COTTON BOLLS OPEN 76 69 77 65
COTTON HARVESTED 13 11 17 14

DJ ICE Cotton Speculation And Hedging Report – Sep 26
For Sep 23 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 60,490 1,070 41.2 50,301 1,144 34.2
HEDGING
Total 86,495 268 58.8 96,684 256 65.8
GRAND TOTAL: 146,985 1,338 100.0 146,985 1,400 100.0

FCOJ

General Comments: Futures closed lower again yesterday in response to fears about world economic conditions and on Florida weather. Speculators were. 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 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 down with objectives of 147.50 November. Support is at 149.00, 145.00, and 143.00 November, with resistance at 153.00, 155.00, and 160.00 November.

DJ ICE FCOJ Speculation And Hedging Report – Sep 26
For Sep 23 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 12,022 306 51.1 3,469 197 14.8
HEDGING
Total 11,482 98 48.9 20,035 55 85.2
GRAND TOTAL: 23,504 404 100.0 23,504 252 100.0

COFFEE

General Comments: Futures were higher yesterday in recovery trading. The world made it through the weekend, so it seems that the panic selling has subsided for now. Futures were able to return to the tight supply situation for the short term, and the possibility of less than expected Arabica Coffee produced over the next year. The lack of offer in physical markets is still important, with no one really selling that much. 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. The cold is gone, but it is till dry in Coffee areas. Rain is needed for flowering there. 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 down for the short term in all markets.

Overnight News: Certified stocks are lower today and are about 1.434 million bags. The ICO composite price is now 195.69 ct/lb. Brazil should see mostly dry weather. Temperatures will average above normal.

Chart Trends: Trends in New York are down with no objectives. Support is at 231.00, 227.00, and 225.00 December, and resistance is at 241.50, 249.50, and 252.00 December. Trends in London are down with objectives of 1925 and 1790 November. Support is at 1930, 1860, and 1840 November, and resistance is at 1995, 2020, and 2030 November. Trends in Sao Paulo are down with no objectives. Support is at 304.00, 297.00, and 295.00 December, and resistance is at 320.00, 323.00, and 330.00 December.

SUGAR
General Comments: Futures closed higher yesterday in recovery trading. News that Egypt bought from Brazil over the weekend supported demand ideas after the big break in prices seen over the last few weeks. Prices are holding an area that some think will prove to be a short term low, but some chart analysts think that moves lower will be coming soon. There are some reasons to think Sugar can hold in this area for at least the short term. India could 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 down.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal. Ukraine has produced 300,000 tons of Sugar from beets so far this year.

Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 2400, 2350, and 2330 March, and resistance is at 2530, 2640, and 2720 March. Trends in London are mixed. Support is at 625.00, 620.00, and 618.00 December, and resistance is at 646.00, 657.00, and 667.00 December.

COCOA

General Comments: Futures were higher in New York and in London yesterday in recovery trading. Ideas of over supply in the market for Cocoa still are keeping prices down overall. Cocoa keeps flowing and as end users seem to be covered. Origin and speculators were said to be the best seller, but commercial buying was noted as well. 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 4.000 million bags. ICE said that Cocoa deliveries are 0 contracts today and now total 13 contracts for the month.

Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 2610, 2590, and 2560 December, with resistance at 2715, 2740, and 2790 December. Trends in London are down with objectives of 1620 and 1480 December. Support is at 1720, 1690, and 1660 December, with resistance at 1760, 1800, and 1815 December.

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

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