Cotton higher after buyers reject Chinese cotton

COTTON

General Comments:  Futures were a little higher on news that the Chinese government auction of its Cotton stocks went poorly.  Buyers there were not interested due to poor quality and relatively high prices.  The news implied that demand for world Cotton can stay strong as mills in China will still import despite big import fees and taxes.  The current low prices are bringing into question what farmers in Texas and the Delta and Southeast will plant this year.  Some are wondering if planted area might be lower this year here in the U.S. because of 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.  Delta areas will turn dry today.  Trends are not well defined on the charts, but ideas are that the market can continue to work higher overall.

Overnight News:  The Delta will be dry all week and Southeast will get showers or rains through Thursday, then will see dry conditions move from west to east the balance of the week.  Temperatures will average near to above normal.  Texas will get dry weather.  Temperatures will average near to above normal.  The USDA spot price is now 71.65 ct/lb.  ICE said that certified Cotton stocks are now 0.102 million bales, from 0.101 million yesterday. 

Chart Trends:  Trends in Cotton are mixed to up with objectives of 77.30 and 78.40 March.  Support is at 75.30, 74.40, and 73.70 March, with resistance of 76.40, 76.95, and 77.05 March.

FCOJ

General Comments:  Futures closed lower again 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.  California will see moderating temperatures through the weekend.  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 109.00, 108.00, and 107.00 March, with resistance at 115.00, 118.00, and 122.00 March.

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