Coffee, Cocoa and Sugar: December coffee continues its upward trend gaining another 4.4c per pound on Friday to close at $2.7990 per pound. Old crop Colombian has been sold out and farmers are holding back on selling new crop for higher prices. Brazil is also not selling much and other Central American growers also withholding coffee from the market. We could see a price move basis the December contract to the $3.00 per pound resistance level. December cocoa closed at $3,090 per tonne, up $63 on short covering after recent selling. Current supplies are ample and Ivory Coast exports are 985,336 tons, up from last years 836,024 tons. We prefer the sidelines after having been bullish for cocoa. October sugar closed at 30.06c per pound, up 40 points tied to an expectation for a smaller Brazil crop. The Philippines have exported 121,817 tons so far this year and has supplies of 276,683 tons of Refined and 571,126 tons of Raw sugar. China has sold most of its sugar at auction and rumors that they will need to import more to maintain pricing could support sugar prices from here. We prefer the sidelines after having been bearish.
Cotton: December cotton closed at $1.0432 per pound up 1.33c on shortcovering after recent long liquidation tied to disappointing export sales. With China and Pakistan growing areas damaged by rains we could see additional price gains and after having been bearish from the $1.75 level, we would now look to buy using stop protection.
John L. Caiazzo