COTTON
General Comments: Futures were higher as speculators contemplated less planted area next year. Bull spreads were featured as the market tries to find some Cotton. Export sales have been strong for the last month to six weeks, and strong sales are expected to continue after the failed Chinese government auction a week ago. Buyers there said that the government wanted high prices for inferior Cotton and that they would continue to import even with higher 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 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 this week and a shower this weekend. Temperatures will average near to above normal. The USDA spot price is now 74.77 ct/lb. ICE said that certified Cotton stocks are now 0.108 million bales, from 0.108 million yesterday.
Chart Trends: Trends in Cotton are up with objectives of 9100 March. Support is at 78.00, 77.00, and 76.90 March, with resistance of 80.55, 85.25, and 87.00 March.
FCOJ
General Comments: Futures closed a little higher again on what appeared to be speculative short covering as warm and mostly dry weather continued in Florida. 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. The USDA cold storage report showed increased supplies from the market, which mirrors the trend in the weekly data from the Florida Mutual Association. Harvest is continuing, so an increase in supplies should be expected at this time of year.
Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average near to above normal. USDA said that FCOJ in cold storage is now 695,489 pounds, from 598,005 pounds at the end of November
Chart Trends: Trends in FCOJ are mixed to 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.
Next Page: Coffee, Sugar and Cocoa
COFFEE
General Comments: Futures were lower on what appeared to be speculator selling. Analysts said there was a pickup in offers from Brazil, although there were no reports from origin to confirm that. It mostly seemed like fund selling that started the ball rolling, then some sell stops got hit on the way down and found very little buying interest. Trends turned down for the short term yesterday, but prices remain in the recent trading range longer term. 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 2.608 million bags. The ICO composite price is now 134.09 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.
Chart Trends: Trends in New York are mixed to down with objectives of 147.50 and 140.00 March. Support is at 145.50, 142.50, and 141.00 March, and resistance is at 154.50, 158.00, and 160.00 March. Trends in London are mixed. Support is at 1930, 1905, and 1900 March, and resistance is at 1965, 1980, and 1990 March. Trends in Sao Paulo are mixed. Support is at 183.00, 182.00, and 179.50 March, and resistance is at 187.00, 190.00, and 193.00 March.
SUGAR
General Comments: Futures closed lower on follow through selling tied to reports of beneficial rains in Brazil and on no real demand news yesterday. Traders are looking for demand as supply does not seem to be a problem right now. In fact, most statistical organizations continue to look for a big surplus production for the year. Production has been strong in Brazil so far this year, and reports say that the new crop production looks to be strong as well. Exports from Brazil continue to be very strong after the delayed start to the program. Futures trends are 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.
Chart Trends: Trends in New York are down with objectives of 1810 and 1760 March. Support is at 1800, 1770, and 1740 March, and resistance is at 1840, 1860, and 1885 March. Trends in London are down with objectives of 455.00 and 415.00 March. Support is at 480.00, 475.00, and 470.00 March, and resistance is at 495.00, 496.00, and 501.00 March.
COCOA
General Comments: Futures closed lower on what appeared to be speculative selling tied to bad demand ideas. 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 due to 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 déficit 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 3.798 million bags. Ivory Coast arrivals are now estimated at 896,000 tons, from 824,000 tons last year
Chart Trends: Trends in New York are mixed. Support is at 2205, 2195, and 2155 March, with resistance at 2250, 2275, and 2310 March. Trends in London are mixed to down with objectives of 1425 March. Support is at 1430, 1410, and 1405 March, with resistance at 1465, 1480, and 1500 March.
