COCOA
General Comments: Futures closed lower. Good arrivals in Africa are negative and are continuing. Ivory Coast arrivals are strong, and the trend for strong arrivals from there should continue. However, arrivals from other West African countries are starting to move lower. 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. Ivory Cost growing conditions are reported good right now as the Harmattan winds are subsiding without causing any real damage to crops. Some showers have been reported as well. The better weather is needed as it was too dry last year.
Overnight News: Mostly dry conditions are expected in West Africa, but some showers ar expecte. 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 3.754 million bags. LIFFE stocks are 2,642 standard lots, 146 large lots, and 3 bulk lots.
Chart Trends: Trends in New York are down with objectives of 2175 and 2100 March. Support is at 2155, 2145, and 2115 March, with resistance at 2230, 2250, and 2275 March. Trends in London are mixed to down with objectives of 1425 March. Support is at 1425, 1410, and 1405 March, with resistance at 1455, 1465, and 1480 March.
COTTON
General Comments: Futures were higher as speculators contemplated less planted area next year and also expected a strong export sales report this morning. Bull spreads were featured once again as the market tries to find some Cotton. Those looking for Cotton are having a tough time as supplies do not seem to be out there, or at least are not available to the market. 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 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 early next week. Temperatures will average near to above normal, then above to much above normal starting on Sunday. Texas will get dry weather this week and a shower this weekend. Temperatures will average near to above normal this weekend and above to much above normal next week. The USDA spot price is now 77.42 ct/lb. ICE said that certified Cotton stocks are now 0.110 million bales, from 0.108 million yesterday. USDA said that net Upland Cotton export sales were 213,700 bales this year and 29,700 bales next year. Net Pima sales were 20,700 bales this year and 0 bales next year.
Chart Trends: Trends in Cotton are up with objectives of 9100 March. Support is at 80.55, 79.90, and 78.00 March, with resistance of 84.00, 85.25, and 87.00 March.
Next page: Orange Juice, Sugar and Coffee
FCOJ
General Comments: Futures closed lower on what appeared to be speculative selling. 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 and mild temperatures 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 normal temperatures and light showers or dry conditions. Better showers are likely this weekend. 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.
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.
COFFEE
General Comments: Futures were lower as funds and other speculators returned to sell for new positions. Trends turned down for the short term Tuesday, but prices remain in the recent trading range longer term. However, futures could drop more this week if more speculative selling shows up. Current crop development is good this year in Brazil, and production areas are getting beneficial rain for the developing crop. Central America crops are mostly harvested. 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. Crops in Central America will see some significant losses due to Roya next year, and some yields have been impacted this year. Yield losses could be 30% or more. Colombia is reported to have good conditions.
Overnight News: Certified stocks are higher today and are about 2.615 million bags. The ICO composite price is now 132.98 ct/lb. Brazil should get mostly dry conditions this week and scattered showers and storms this weekend and into next week. 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. LIFFE stocks are now 10,553 lots.
Chart Trends: Trends in New York are mixed to down with objectives of 140.00 March. Support is at 145.50, 142.50, and 141.00 March, and resistance is at 151.50, 154.50, and 158.00 March. Trends in London are mixed to down with objectives of 1935 and 1910 March. Support is at 1930, 1905, and 1900 March, and resistance is at 1965, 1980, and 1985 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 mostly a little lower in consolidation trading. Most traders still note that big supplies appear to be available to the market. Demand is there, but not in big amounts as most buyers are not worried about prices. 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. 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. Temperatures should be near normal. China said it will sell 300,000 tons of Sugar from state reserves this weekend.
Chart Trends: Trends in New York are mixed. Support is at 1830, 1800, and 1770 March, and resistance is at 1860, 1885, and 1905 March. Trends in London are mixed. Support is at 480.00, 475.00, and 470.00 March, and resistance is at 495.00, 496.00, and 501.00 March.
