COFFEE
General Comments: Futures were higher as traders prepared for the index fund adjustments that start tomorrow. The funds most likely need to buy more Coffee contracts to match the indexes, and this idea created speculative buying yesterday. The close was positive and implied that futures can move higher this week. Charts still show that New York and Sao Paulo are in a trading range, with both possibly trying to complete a bottom. London futures are in a short term up trend, with traders there talking about tight supplies available to the market. Brazil still has most of its production to sell and is getting some competing offers in the short term from Central America and Colombia. Current crop development is good this year in Brazil as moderate temperatures have been reported, but production areas could use more rain for the developing crop. Central America crops are getting harvested, and conditions are called good there. There are widespread reports of rust on the trees and leaves, and Roya has become a big issue as well. It is possible that many Central America and Mexico producers will harvest much less Coffee next year if they are affected by this disease, and many seem to be affected. We are already hearing significant loss estimates for the next crop due to Roya. Colombia is reported to have good conditions.
Overnight News: Certified stocks are a little lower today and are about 2.585 million bags. The ICO composite price is now 133.18 ct/lb. Brazil should get scattered showers over the second half of the week. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get mostly dry conditions, but a few showers are possible in southern Mexico and northern Central America. Temperatures should average near to above normal. Peru hopes to produce 7.5 million quintals of Coffee in 2013, from 6.2 million in 2012.
Chart Trends: Trends in New York are mixed. Support is at 146.00, 143.00, and 141.00 March, and resistance is at 152.00, 155.00, and 157.00 March. Trends in London are up with objectives of 2100 and 2290 March. Support is at 1940, 1915, and 1900 March, and resistance is at 1975, 1985, and 2000 March. Trends in Sao Paulo are mixed. Support is at 182.00, 179.00, and 178.00 March, and resistance is at 188.00, 190.00, and 193.50 March.
COTTON
General Comments: Futures were a little higher as traders get ready for the USDA January reports that will be released on Friday morning, Chicago time. A weaker U.S. dollar helped demand ideas and prices as well. Some are wondering if planted area might be lower next year here in the U.S. due to weak prices against competing crops. The area lost would go mostly to Corn and Soybeans. Current weather features some precipitation in Delta and Southeast areas, but western Texas was mostly dry. Trends are not well defined on the charts, but ideas are that the market can continue to work higher overall.
Overnight News: The Delta and Southeast will be dry today and tomorrow, and then will see rain move from west to east the balance of the week. Temperatures will average above normal. Texas will get dry weather except for some rain on Wednesday. Temperatures will average above normal. The USDA spot price is now 71.40 ct/lb. ICE said that certified Cotton stocks are now 0.094 million bales, from 0.094 million yesterday.
Chart Trends: Trends in Cotton are mixed. Support is at 74.60, 74.40, and 73.70 March, with resistance of 76.40, 76.95, and 77.05 March.
Next page: Orange Juice, Sugar and Cocoa
General Comments: Futures closed lower as favorable weather was forecast for Florida. Temperatures remain mild in the state, and conditions are mostly dry. More rain would be beneficial, but current forecasts are on the dry side. Fruit is holding for now, and irrigation is being used by producers to hold crop condition. Winter is here, and with Winter comes the threat for a freeze to Oranges and other fruits grown in Florida, but there is no real cold weather in the forecast. Harvest in Florida of mid and early oranges is continuing. Demand for domestically produced Juice remains down from last year. Weather in Brazil is reported to be good. Brazil is seeing warm temperatures and light showers or dry conditions.
Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average near to above normal. ICE said that 0 delivery notices were posted today and that total deliveries for the month are now 0 contracts.
Chart Trends: Trends in FCOJ are down with no objectives. Support is at 108.00, 107.00, and 104.00 March, with resistance at 118.00, 122.00, and 126.00 March.
SUGAR
General Comments: Futures closed a little higher after trading both side of unchanged. It looked like speculators were trying to buy in anticipation of the index fund adjustments that could add more Sugar contracts to their portfolios. It was a two sided day, with other speculators doing some selling. Futures are in a trading range. There was no demand news to support values, but prices are cheaper these days and buyers can get good deals done. Big Brazil production remains negative to prices, and traders know that Indian and Thai production is in the market, too, although there are more reports of slow harvest progress in Thailand. Conditions still look good for many production areas. The Thai crushing season is underway with good production expected, but the crushing pace is called slow right now. Brazil production continues strong.
Overnight News: Scattered and light showers are expected in Brazil over the second half of the week. Temperatures should be near to above normal. Safras e Mercado said yesterday that it expects Center-South Brazil Sugarcane production to be near 600 million tons, 15% higher than 2012.
Chart Trends: Trends in New York are mixed to down with objectives of 1810 March. Support is at 1865, 1830, and 1800 March, and resistance is at 1925, 1945, and 1975 March. Trends in London are mixed. Support is at 505.00, 502.00, and 500.00 March, and resistance is at 516.00, 520.00, and 524.00 March.
COCOA
General Comments: Futures closed higher in reversal type trading yesterday. A support area held on the charts and this seemed to create a lot of speculative buying tied to short covering. Good arrivals in Africa are negative and are continuing. Ivory Coast arrivals are strong, and the trend for strong arrivals from there should continue. Ghana producers are reported to be selling as well. Malaysia has been seeing scattered showers and seems to be in better condition, and Indonesia is seeing beneficial rains. Overall weather patterns in West Africa production areas are good for harvest progress. Demand is reported weaker from the US and Europe, in part due to current economics and in part due to changes forced by the Wold Bank that encouraged forward marketing of the crops. The market needs some demand news or some other news to shake it out of the sideways to lower trade. This news could come son as the main West Africa harvest should be about over and there is a lot of talk that production next year will be less.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see episodes of scattered showers. Temperatures should average near normal. Brazil will get dry conditions and warm temperatures. ICE certified stocks are sharply higher today at 3.820 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2205, 2195, and 2155 March, with resistance at 2270, 2290, and 2325 March. Trends in London are mixed. Support is at 1420, 1410, and 1405 March, with resistance at 1445, 1455, and 1490 March.
