COTTON

General Comments: Futures were higher in range trading again yesterday. Speculators and industry were the best buyers as worries about the European debt crisis eased once again and as positive US economic data was announced. The weekly export sales report was positive for Cotton as new sales were announced. 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, but could be turning up with the price action yesterday. 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.
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 97.66 ct/lb. ICE said that certified Cotton stocks are now 0.031 million bales, from 0.030 million yesterday. ICE said that 20 contracts were delivered today and that total deliveries are now 197 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 105.00, 107.00, and 110.00 December.

FCOJ
General Comments: Futures closed a little higher yesterday in response to positive US and European economic developments. 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.

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 lower again yesterday on what appeared to be follow through fund 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, but prices act as if they could work lower.

Overnight News: Certified stocks are higher today and are about 1.431 million bags. The ICO composite price is now 192.58 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 to down with no objectives. 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 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 sharply higher yesterday on what appeared to be fund and commercial buying. Reports of demand from African and Asian countries supported futures. Prices held an area that some thought would prove to be a short term low, and this created the fund buying interest. Some chart analysts think that moves lower will be coming soon and this will only be a corrective rally at the end. 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. Chart trends are up after the strong moves yesterday.

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 up with objectives of 2690 March. Support is at 2540, 2480, and 2400 March, and resistance is at 2640, 2720, and 2730 March. Trends in London are up with objectives of 681.00 December. Support is at 639.00, 625.00, and 620.00 December, and resistance is at 677.00, 685.00, and 693.00 December.

COCOA

General Comments: Futures were higher in New York and in London yesterday as these markets try to put a low together. Talk of over supply in the market for Cocoa still are keeping prices down overall, but futures have made new contract lows and might have already priced in the increased supplies for now. 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 3.938 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 2620, 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

Free-Subscribe to receive Weekly Newsletters via Email