COFFEE
General Comments: Futures were higher on follow through speculative buying on Friday, but London and Sao Paulo moved slightly lower yesterday with New York closed. Bulls were not able to force new highs for the week, but it is possible that the markets could rally more this week. Charts show that some lows have been formed in all three markets and still show that all three markets are in short term up trends. Vietnamese producers told wire services over the weekend that they expect sharply lower production for 2013 and that production could drop up to 30%. Current crop development is good this year in Brazil, and production areas are getting beneficial 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. Costa Rica says the country could lose up to 30% of the crop, and Mexico expects to see a significant impact. Crops in Guatemala, Honduras, and El Salvador have also been affected, but so far crops in Nicaragua seem to show less damage. Colombia is reported to have good conditions.
Overnight News: Certified stocks are higher today and are about 2.606 million bags. The ICO composite price is now 138.87 ct/lb. Brazil should get mostly dry conditions this week and scattered showers and storms this weekend. Temperatures will average near normal. Colombia should get mostly dry conditions, and Central America and Mexico should get mostly dry conditions. Temperatures should average near to above normal. Latin American Washed Coffee exports were 2.25 million bags in December, up 6% from 201. Marketing year to date exports are now 6.14 million bags, up 16% from last year.
Chart Trends: Trends in New York are up with objectives of 158.00, 160.00, and 170.00 March. Support is at 154.50, 151.00, and 149.00 March, and resistance is at 160.00, 162.00, and 164.00 March. Trends in London are up with objectives of 2100 and 2290 March. Support is at 1940, 1930, and 1910 March, and resistance is at 1990, 2000, and 2020 March. Trends in Sao Paulo are up with objectives of 199.00 March. Support is at 187.00, 184.50, and 183.50 March, and resistance is at 193.50, 195.00, and 196.00 March.
COTTON
General Comments: Futures were mixed, with nearby months a little higher. Bull spreads were featured as the market tries to find some Cotton. The rally started last week after the Chinese government auction failed to sell much out of government supplies. Buyers there were not interested because of 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. USDA showed strong export sales to help the rally, and good economic data for the U.S. helped the rally, too. 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 US 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. Delta areas will turn dry this week. Ideas are that the market can continue to work higher overall.
Overnight News: The Delta and Southeast will see mostly dry conditions, although a few showers are possible late in the week. Temperatures will average near to above normal this week and near to below normal this weekend. Texas will get dry weather. Temperatures will average near to above normal. The USDA spot price is now 73.71 ct/lb. ICE said that certified Cotton stocks are now 0.105 million bales, from 0.103 million yesterday. Informa estimates US Cotton planted area at 10.3 million acres for the coming year.
Chart Trends: Trends in Cotton are up with no objectives. Support is at 78.00, 77.00, and 76.90 March, with resistance of 79.60, 79.90, and 80.55 March.
Next page: Orange Juice, Sugar and Cocoa
FCOJ
General Comments: Futures closed higher on what appeared to be speculative short covering as warm and mostly dry weather continued in Florida. It was cold in California last week, but so far there have been no reports of losses. California will see moderating temperatures through the week. 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 near to above normal.
Chart Trends: Trends in FCOJ are up with objectives of 119.00 and 125.00 March. Support is at 113.50, 110.00, and 109.00 March, with resistance at 118.00, 122.00, and 126.00 March.
SUGAR
General Comments: Futures closed a little lower on follow through selling tied to reports of beneficial rains in Brazil and on no real demand news on Friday, and London saw follow through selling yesterday. Traders are looking for demand as supply does not seem to be a problem right now. 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 are also now in the north where conditions had been too dry. Exports from Brazil continue to be very strong after the delayed start to the program. Futures 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. The Thai crushing season is underway with good production expected, but the crushing pace remains slow. Traders wonder if and when India will cut offers to the market due to the lower prices and perhaps less than expected production due to some dry weather at the beginning of the growing season.
Overnight News: Scattered and light showers are expected in Brazil this weekend after a mostly dry week. Temperatures should be near normal. China imported 268,362 tons of Sugar in December, down 46% from December, 2011. Total 2012 exports were 3.75 million tons, up 28% from 2011.
Chart Trends: Trends in New York are down with objectives of 1820, 1810, and 1760 March. Support is at 1830, 1800, and 1770 March, and resistance is at 1885, 1900, and 1925 March. Trends in London are down with no objectives. Support is at 490.00, 485.00, and 480.00 March, and resistance is at 500.00, 505.00, and 510.00 March.
COCOA
General Comments: Futures closed lower in consolidation trading on Friday, and London stayed in a consolidation trade yesterday as it closed narrowly mixed. The North American grind data was released after the close on Thursday and did not help to support prices Friday. Good arrivals in Africa are negative and are continuing. Ivory Coast arrivals are strong, and the trend for strong arrivals from there should continue. 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 because of changes forced by the World Bank that encouraged forward marketing of the crops. Traders are starting to look ahead and past the midcrop harvest and note that the market could move to a production deficit next year.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average mostly above normal. Malaysia and Indonesia should see episodes of scattered showers, but Malaysia will be drier this weekend. Temperatures should average near normal. Brazil will get scattered showers and warm temperatures. ICE certified stocks are lower today at 3.823 million bags. Ghana Cocoa purchases are 485,000 tons so far this year, from 586,000 tons last year. The North American Cocoa grind was 120,053 tons, from 118,926 tons last year. The Asian Cocoa grind was 155,237 tons in the fourth quarter of last year, up 2.8% from 2011. Total processed in 2012 was 606,622 tons, from 585,585 tons in 2011.
Chart Trends: Trends in New York are up with objectives of 2360, 2450, and 2690 March. Support is at 2270, 2230, and 2205 March, with resistance at 2325, 2355, and 2370 March. Trends in London are up with objectives of 1490 and 1535 March. Support is at 1465, 1445, and 1430 March, with resistance at 1490, 1510, and 1525 March.
