COTTON
General Comments: Futures closed mixed to a little lower yesterday in range trading. December was slightly higher on spreads, but the other months were a little lower. It was a good performance for prices in the face of the selling seen in the other markets. Mills were said to be the best buyers. Weather overall remains a supportive factor, as Texas remains hot and dry and as there has been adverse weather in parts of Asia this year. There is a tropical storm that could have damaged quality if it moved through Louisiana and Mississippi and then farther east. The weekly USDA crop progress reports did show further loss in condition and this could be related to the storm. Chart trends are mixed for the short term. Demand remains soft. Countries like India are still offering Cotton at prices below those seen in the US, and the government is now allowing unrestricted exports for the next couple of months. Bad weather in the US is still around, with little rain in the forecast for major Texas growing areas for the next week. Delta and Southeast areas should dry out after the storm over the weekend.
Overnight News: The Delta and Southeast will get mostly dry conditions after the former tropical system pulls out of the Southeast today. Temperatures will average near to below normal through Sunday. Texas will be mostly dry. Temperatures will average near to below normal. The USDA average spot price is now 103.67 ct/lb. ICE said that certified Cotton stocks are now 0.016 million bales, from 0.016 million yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 105.00, 101.00, and 100.00 October, with resistance of 108.00, 110.00, and 112.00 October.

U.S. Weekly Crop Progress Highlights – USDA
WASHINGTON, Sept. 06 (Reuters) – Highlights of the U.S. Agriculture
Department’s weekly crop progress report (all numbers expressed in percent):

Week ended 09/04/11 08/28/11 09/04/10 5-year

COTTON CONDITION
– Excellent 4 5 15 N/A
– Good 24 25 45 N/A
– Fair 28 29 28 N/A
– Poor 19 18 9 N/A
– Very Poor 25 23 3 N/A
COTTON BOLLS OPEN 42 27 40 32
COTTON HARVESTED 7 NA 6 6

DJ ICE Cotton Speculation And Hedging Report – Sep 6
For Sep 2 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 66,475 1,277 44.8 45,933 985 31.0
HEDGING
Total 81,904 272 55.2 102,446 251 69.0
GRAND TOTAL: 148,379 1,549 100.0 148,379 1,236 100.0

FCOJ
General Comments: Futures closed higher on chart patterns and on a new system forming out in the Atlantic. The new system shows a northwest track and might not make it to Florida or anywhere near the US. Florida has had good weather so far this year with showers most days and warm temperatures. Charts show that trends are turning again and that futures held support again the lows made a couple of weeks ago. Florida is once again mostly warm and is getting scattered showers. 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 3 contracts today and now total 578 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 162.50, 163.50, and 165.00 November.

DJ ICE FCOJ Speculation And Hedging Report – Sep 6
For Sep 2 long and short positions in contracts.
SPECULATION LONG ACCTS PCT SHORT ACCTS PCT
Total 11,768 355 50.0 3,781 207 16.1
HEDGING
Total 11,785 108 50.0 19,772 46 83.9
GRAND TOTAL: 23,553 463 100.0 23,553 253 100.0

COFFEE
General Comments: Futures were lower in all markets again yesterday in reaction to worries about the economy here and the economies of Europe. It was a down day in about all commodities markets yesterday. 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 freezes seen a few weeks ago could have hurt flowering and will cut production potential. Speculators were the best buyers, and Industry and origin appeared to be quiet. 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 down for the short term in all markets.
Overnight News: Certified stocks are lower today and are about 1.462 million bags. ICE said that deliveries were 0 contracts today and now total 138 contracts for the month. The ICO composite price is now 226.76 ct/lb. Brazil should see mostly dry weather. Temperatures will average above normal. Brazil exported 2.82 million bags of Coffee in August, up 0.3% from last year. Year to date exports are now 4.62 million bags.
Chart Trends: Trends in New York are mixed. Support is at 277.00, 273.00, and 263.00 December, and resistance is at 283.00, 285.00, and 290.00 December. Trends in London are down with no objectives. Support is at 2140, 2090, and 2055 November, and resistance is at 2200, 2235, and 2250 November. Trends in Sao Paulo are mixed. Support is at 358.00, 356.00, and 347.00 December, and resistance is at 365.00, 367.00, and 372.00 December.

SUGAR
General Comments: Futures closed lower in New York and lower in London yesterday on what appeared to be speculative profit taking tied to the weak economic picture here and in Europe. Dreyfus and sources in Thailand were quoted by wire services in saying that the country could export over 3.3 million tons this coming year, from 2.2 million the previous year. Reports that Thailand could have much more Sugar for export hurt the bulls. Reports that the crop in Brazil might get smaller provided more support, but seems played out as the market driver for now. Government sources now suggest that production there is only about 37.07 million tons this year, from 40.9 million in the original forecast. Brazil lost Sugar production potential this year due to poor weather, but production in other parts of the world seems strong. Traders are watching to see how much more Sugar India is willing to export, and how much China might need to buy to keep prices there from spinning out of control.. Prices there are very high and supplies are thin in the domestic market. 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. Chart trends turned down with the price action last week. Thailand sold 44,000 tons of Raw Sugar overnight. Tanzania now expects to import 120,000 tons to cover domestic shortages.
Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to down with objectives of 2780 and 2670 October. Support is at 2810, 2750, and 2720 October, and resistance is at 2890, 2910, and 2930 October. Trends in London are down with objectives of 703.00 October. Support is at 747.00, 744.00, and 741.00 October, and resistance is at 758.00, 761.00, and 766.00 October.

COCOA
General Comments: Futures were lower in New York and in London yesterday on weakness seen in most markets. Ideas of good supplies from Western Africa keep the selling pressure around, but the region is now between harvests so offers are less. But, the export declarations remain strong and well ahead of last year. Trends are trying to turn up 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 3.870 million bags. ICE said that Cocoa deliveries are 0 contracts today and now total 2 contracts for the month. Ivory Coast arrivals are now estimated at 1.405 million tons, up 22.4% from last year. Indonesia exported 2,241 tons of Cocoa in August, from 4,160 tons in July.
Chart Trends: Trends in New York are down with objectives of 2950 and 2790 December. Support is at 2950, 2920, and 2900 December, with resistance at 3010, 3050, and 3100 December. Trends in London are mixed to down with objectives of 1880 December. Support is at 1890, 1855, and 1840 December, with resistance at 1935, 1960, and 1975 December.

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

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