Coffee, Cocoa and Sugar: July coffee closed at $2.9120 per pound, up 6.05c tied to tight near term supplies and increased coffee consumption. We prefer the sidelines. July cocoa closed at $3170 per tonne, up $43 even after the former Ivory Coast President was arrested and the new President, Quattara, has been installed in the office. The political conflict has impacted cocoa production from Ivory Coast and expectations are that the next main crop will be "very disappointing". Nigerian Cocoa exporters reportedly bought and hoarded Cocoa in expectation of higher prices due to the Ivory Coast situation. We could see some of that cocoa come out and that could add to last months declines. Stay out for now. July sugar closed at 22.9c per pound, down 16 points. Reports that India and Thailand have produced larger than expected Sugar crops in the 2010-2011 season prompted profittaking and new short positions. Stay out for now.
Cotton: July cotton closed at $1.7740 per pound, down 60 points on expectations of bumper crops from Argentina, Australia, and Brazil. Also planned increases in Cotton in the Northern Hemisphere could also add to supplies. We continue to favor the short side of cotton through the purchase of put options.
John L. Caiazzo
Information provided is from sources deemed to be reliable but not guaranteed. Futures and Options trading involve a high degree of risk and may not be suitable for everyone. John Caiazzo is a registered commodities broker with over 40 years experience in investments and opinions are his own and not of the Futures Commission Merchant to which he introduces his clients.