COTTON
General Comments: Futures were a little higher in range trading yesterday. Speculators were the best buyers as worries eased about the European debt crisis. However, the commercial buying seen in the previous few sessions were hard to find yesterday. Commercials seem unwilling to chase futures higher as doubts about demand persist. Old crop Cotton has seen a lot of export sales cancellations in the past couple of months, and traders are worried that demand for the new crop will not be that strong, either. No one seems all that worried about production here or around the world. Chart trends are mixed for the short term. Demand remains soft with a lot of export competition around. India has had a lot of Cotton to offer, but recent floods make it hard for Pakistan to talk of exports and easy for mills there to talk of new imports from India down the road. However, Chinese demand could start to increase soon and some of that demand would come to the US. 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 that are now 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 95.32 ct/lb. ICE said that certified Cotton stocks are now 0.030 million bales, from 0.029 million yesterday. ICE said that 1 contract was delivered today and that total deliveries are now 175 contracts for the month.
Chart Trends: Trends in Cotton are mixed. Support is at 99.00, 95.00, and 94.00 December, with resistance of 102.00, 105.00, and 107.00 December.
FCOJ
General Comments: Futures closed a little higher yesterday in response to strength seen in most commodities markets. Florida weather remains a negative for prices. 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. 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 155.00, 160.00, and 164.00 November.
COFFEE
General Comments: Futures were higher again yesterday in recovery trading. Everyone seems a little more relaxed about world economics now that European ministers are moving to avert a credit crisis there that might be caused by the Greek situation. 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. There was some talk of increased Vietnamese offers in London, but so far this has not been seen in the pits there. Vietnam continues to say it will build internal stocks to help support Robusta prices and for internal consumption. Chart trends are mixed for the short term in all markets.
Overnight News: Certified stocks are lower today and are about 1.428 million bags. The ICO composite price is now 198.20 ct/lb. Brazil should see mostly dry weather through this weekend, but showers next week. Temperatures will average above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 250.00 and 260.00 December. Support is at 240.50, 231.00, and 227.00 December, and resistance is at 249.50, 252.00, and 256.00 December. Trends in London are mixed. Support is at 1980, 1930, and 1860 November, and resistance is at 2020, 2030, and 2050 November. Trends in Sao Paulo are mixed. Support is at 320.00, 309.00, and 304.00 December, and resistance is at 323.00, 330.00, and 338.00 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. UNICA said that Brazil Sugar production from the Center-South region is now 23.1 million tons, down 8% from last year. The Sugarcane crush is now 375.1 million tons, down 10.2% from last year. Ethanol production is now 15.4 billion liters, down 18.3% from last year. First half September Sugar production was 2.75 million tons, up 3.7% from last year. India has approved 1.75 million tons of Sugar for sale in the domestic open market for October. Russia has produced 1.121 million tons of White Sugar from imported Raws so far this year. Germany has produced 454,846 tons of Sugar from beets so far this year.
Chart Trends: Trends in New York are mixed. Support is at 2400, 2350, and 2330 March, and resistance is at 2530, 2640, and 2720 March. Trends in London are mixed to up with objectives of 660.00 and 681.00 December. Support is at 639.00, 625.00, and 620.00 December, and resistance is at 658.00, 660.00, and 667.00 December.
COCOA
General Comments: Futures were higher in New York and in London yesterday along with most other commodities markets. Some of the buying came from chart patterns that showed that a potential low had been made. Ideas are that the move higher will only be a short term correction. Talk 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 lower today and are now about 3.992 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 up with objectives of 2790, 2890, and 3370 December. Support is at 2690, 2660, and 2650 December, with resistance at 2740, 2790, and 2830 December. Trends in London are mixed. Support is at 1760, 1720, and 1690 December, with resistance at 1800, 1815, and 1830 December.
Questions? Ask Jack Scoville today at 312-264-4322
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