COTTON
General Comments: Futures closed sharply higher to limit up yesterday as traders reacted to the crop in condition ratings and the weaker US Dollar. Funds were the best buyers. Weather was a factor, with big rains in the Southeast threatening to damage Cotton there and reports of floods in Pakistan that could hurt Cotton there. In addition, news that China wants to stockpile Cotton once prices drop helped spark the rally. Texas remains hot and dry and as there has been adverse weather in parts of Asia this year. Chart trends are mixed for the short term, but are trying to turn up. 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. Little rain is 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. 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 107.67 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 107.00, 105.00, and 101.00 October, with resistance of 110.00, 112.00, and 116.00 October.
FCOJ
General Comments: Futures closed higher on chart patterns and on new systems forming out in the Atlantic and in the Gulf of Mexico. The first new system shows a northwest track and probably will not make it to Florida or anywhere near the US. The other one is in the Bay of Campeche and probably will stay well west of the state of Florida. Florida has had good weather so far this year with showers most days and warm temperatures. Charts show that trends are turning up 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 6 contracts today and now total 584 contracts for the month.
Chart Trends: Trends in FCOJ are up with objectives of 176.00 and 191.00 November. Support is at 160.00, 159.00, and 155.00 November, with resistance at 162.50, 163.50, and 165.00 November.
DJ Florida FCOJ Movement And Pack – Sep 7
In gallons. Source: Florida Department of Citrus (FDOC).
2010-2011
Aug 27 Aug 20 Year Ago
MOVEMENT
Retail 132,582 144,900 458,437
Institutional 391,085 338,340 421,531
Bulk 1,502,199 1,489,377 1,801,048
Total 2,025,866 1,972,618 2,681,015
Cumulative 138,704,863 136,678,997 117,675,356
IMPORTS
Foreign 8,025 1,039,107 35,544
Cumulative 16,202,344 16,194,318 20,924,410
RECEIPTS
Domestic 0 0 0
PACK
Retail 138,543 142,428 424,215
Institutional 516,657 437,507 393,108
Bulk 637,699 725,431 691,144
Less Reprocessed 1,292,900 1,305,366 1,508,467
Net 0 0 0
Cumulative 82,091,651 82,091,651 82,252,237
Inventory 59,097,642 61,104,787 106,484,211
COFFEE
General Comments: Futures were higher in New York as certified stocks and the US Dollar moved lower. The lack of deliveries against September contracts also helped support futures in New York. However, London closed with little change and Sao Paulo moved lower. It seemed that all markets were affected in one way or another by the US Dollar weakness. 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 1.452 million bags. ICE said that deliveries were 0 contracts today and now total 138 contracts for the month. The ICO composite price is now 228.59 ct/lb. Brazil should see mostly dry weather. Temperatures will average above normal.
Chart Trends: Trends in New York are mixed. Support is at 279.00, 277.00, and 273.00 December, and resistance is at 285.00, 290.00, and 293.00 December. Trends in London are mixed to down with no objectives. Support is at 2140, 2090, and 2055 November, and resistance is at 2210, 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 mostly a little higher in New York and higher in London yesterday on what appeared to be speculative profit taking tied to the weak economic picture here and in Europe. 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. 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 are down.
Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal. The ISO expects Chinese Sugar imports to be 2.75 million tons in 2011-12, from about 2.00 million tons this year.
Chart Trends: Trends in New York are mixed to down with objectives of 2780 and 2670 October. Support is at 2840, 2810, and 2750 October, and resistance is at 2910, 2930, and 2950 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 761.00, 766.00, and 788.00 October.
COCOA
General Comments: Futures were lower in New York and in London yesterday on what was termed speculative long liquidation. 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 lower today and are now about 3.857 million bags. ICE said that Cocoa deliveries are 0 contracts today and now total 2 contracts for the month.
Chart Trends: Trends in New York are down with objectives of 2930 and 2790 December. Support is at 2930, 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 1920, 1935, and 1960 December.
Questions? Ask Jack Scoville today at 312-264-4322
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