COTTON

General Comments: Futures were a little lower in range trading yesterday. Speculators were the best sellers as worries about the European debt crisis returned. Some commercial buying was noted on the way down. 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. Temperatures will average near to below normal. Texas will be mostly dry. Temperatures will average above normal. The USDA average spot price is now 94.88 ct/lb. ICE said that certified Cotton stocks are now 0.030 million bales, from 0.030 million yesterday. ICE said that 2 contracts was delivered today and that total deliveries are now 177 contracts for the month. China expects to produce about 7.2 million tons of Cotton in 2011. USDA said that net Upland Cotton export sales were 222,600 bales this year and 0 bales next year. Net Pima sales were 100 bales this year and 0 bales next year.

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 lower yesterday in response to weakness 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. Rain could develop next week in Brazil.

Overnight News: Florida weather forecasts call for scattered showers and storms. Temperatures will average near normal, but will turn cooler next week. 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.

DJ Florida FCOJ Movement And Pack – Sep 28
In gallons. Source: Florida Department of Citrus (FDOC).
2010-2011
Sep 17 Sep 10 Year Ago
MOVEMENT
Retail 134,042 129,995 329,777
Institutional 290,948 260,066 324,035
Bulk 1,533,725 1,489,537 1,925,315
Total 1,958,714 1,879,598 2,579,127
Cumulative 144,839,770 142,854,613 125,166,733
IMPORTS
Foreign 0 1,647,049 208,368
Cumulative 18,320,310 18,320,310 21,531,261
RECEIPTS
Domestic 0 0 0
PACK
Retail 152,657 97,169 302,423
Institutional 287,762 283,620 331,713
Bulk 524,668 343,553 656,589
Less Reprocessed 965,087 724,341 1,290,725
Net 0 0 0
Cumulative 82,091,651 82,091,651 82,252,237
Inventory 55,169,228 57,150,406 99,615,769

COFFEE

General Comments: Futures were sharply lower yesterday on what appeared to be big fund selling. This same type of selling was seen in most commodities markets yesterday. 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, but ideas that the ministers will not fully implement any program helped create the selling. Futures still have to deal with a 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, but flowering has not started yet so it is hard to say exactly. Producers there remain concerned as it is still 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 through the weekend in Brazil, but showers are possible starting next week. 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 higher today and are about 1.430 million bags. The ICO composite price is now 193.70 ct/lb. Brazil should see mostly dry weather through this weekend, but showers next week. Temperatures will average above normal through this weekend, then will turn cooler.

Chart Trends: Trends in New York are mixed. Support is at 231.00, 227.00, and 225.00 December, and resistance is at 237.00, 240.50, and 252.00 December. Trends in London are mixed. Support is at 1960, 1930, and 1860 November, and resistance is at 2020, 2030, and 2050 November. Trends in Sao Paulo are mixed. Support is at 309.00, 304.00, and 297.00 December, and resistance is at 320.00, 323.00, and 330.00 December.

SUGAR

General Comments: Futures closed lower yesterday on what appeared to be fund selling that was seen in most commodities markets. Prices are still 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. Industry sources in Russia told wire services that the country is about to export Sugar for the first time in 12 years. Mexico announced that it would not have another import quota this year. Chart trends are down.

Overnight News: Mostly dry conditions are expected in Brazil through this weekend, but showers could start next week. Temperatures should be near to above normal, but will turn cooler next week.

Chart Trends: Trends in New York are mixed. Support is at 2400, 2350, and 2330 March, and resistance is at 2540, 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 lower in New York and in London yesterday along with most other commodities markets. Much of the selling seemed to come from the funds who were said to be selling in most commodities markets. 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 3.947 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. Support is at 2630, 2610, and 2590 December, with resistance at 2710, 2740, and 2790 December. Trends in London are mixed. 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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