Coffee looking for rebound on possible bottom

FCOJ

General Comments: Futures closed lower as warm and dry weather continued in Florida. It has been cold in California where some of the citrus could be affected, but so far there have been no reports of losses. Much of the California crop goes to fresh consumption and not juice, but the total supply of Oranges could be affected, something that might help prices given the losses reported already in Florida due to the greening disease. Weather remains good in Florida, although more rain would be beneficial. Temperatures remain mild in the state, and conditions are mostly dry. Forecasts call for mostly dry conditions to continue. Fruit is holding for now, and irrigation is being used by producers to hold crop condition. 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 above normal.

Chart Trends: Trends in FCOJ are mixed. Support is at 111.00, 109.00, and 108.00 March, with resistance at 115.00, 118.00, and 122.00 March.

SUGAR

General Comments: Futures closed lower on reports of beneficial rains in Brazil and on no real demand news. The market found support despite news from Brazil of increased production. Production has been strong in Brazil so far this year, but the areas with the best weather have been in the Center-South region. The rains over the weekend were in the north where conditions had been too dry. Futures are in a trading range, but trends are turning down. News of any kind remains hard for the traders to find. There was no demand news to support values. Big Brazil production remains negative to prices, and traders know that Indian and Thai production is in the market, too. 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. Traders wonder if and when India will cut offers to the market due to the lower prices. Brazil production continues strong.

Overnight News: Scattered and light showers are expected in Brazil through the weekend. Temperatures should be near to above normal

Chart Trends: Trends in New York are mixed. Support is at 1880, 1850, and 1830 March, and resistance is at 1925, 1945, and 1960 March. Trends in London are mixed. Support is at 502.00, 500.00, and 495.00 March, and resistance is at 515.00, 520.00, and 524.00 March.

COCOA

General Comments: Futures closed higher again in consolidation trading. Traders in both London and New York were waiting for the EU grind data. The data was released after the close and was lower than had been expected by the trade and should result in lowr prices today. The US data will be released later this week. 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 and Indonesia crops appear to be in good condition and weather is called favorable. 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 World 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, but the EU and Ivory Coast data implies that a lower trade can continue.

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 higher today at 3.858 million bags. Ivory Coast arrivals are now 863,000 tons, from 775,000 tons last year. The EU Cocoa grind was 327,982 tons in the fourth quarter, down 6.2% from the year earlier. Totoal grindings for 2012 were 1.29 million tons, down more than 10% from 2011.

Chart Trends: Trends in New York are mixed. Support is at 2230, 2205, and 2195 March, with resistance at 2295, 2325, and 2355 March. Trends in London are mixed to up with objectives of 1490 and 1535 March. Support is at 1430, 1410, and 1405 March, with resistance at 1465, 1490, and 1510 March.

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About the Author
Jack Scoville

Jack Scoville is a veteran futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. His industry contacts in South America, Europe, Asia, and North America provide him with a unique and comprehensive view of these markets. Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles, starting with The PRICE Futures Group since it was established in 1988. Jack writes daily commentaries - Morning Grains and Softs, in both English and Spanish and is regularly quoted around the world by news & wire services including Dow Jones, AP, Bloomberg, and Reuters. You can contact Jack by phone at (312) 264-4322 or by email at jscoville@pricegroup.com. Learn even more on our website at www.pricegroup.com.

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

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