Cotton trends remain up as strong sales continue


COFFEE

General Comments: Futures were higher on some short covering before the weekend. Trends turned down for the short term last week, but prices remain in the recent trading range longer term. Futures are testing support areas now. 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 2.619 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.  Vietnam exported 200,000 tons of Coffee in January, up 22.7% from December. Year to date exports are now 587,000 tons, from 371,000 tons last year.

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. Support is at 1930, 1905, and 1900 March, and resistance is at 1965, 1980, and 1985 March. Trends in Sao Paulo are mixed to down with objectives of 179.00 March. Support is at 179.50, 179.00, and 176.00 March, and resistance is at 182.00, 183.00, and 185.00 March.

SUGAR

General Comments: Futures closed a little lower in front months and little higher in deferred months in consolidation trading. Most traders still note that big supplies appear to be available to the market, and that is the main reason for weaker nearby futures. 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 week. Temperatures should be near normal.  

Chart Trends: Trends in New York are mixed. Support is at 1800, 1770, and 1740 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 491.00, 495.00, and 496.00 March.

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 deficit 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 are expected. 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 3.738 million bags.

Chart Trends: Trends in New York are down with objectives of 2100 March. Support is at 2155, 2145, and 2115 March, with resistance at 2210, 2230, and 2250 March. Trends in London are mixed to down with no objectives. Support is at 1410, 1405, and 1380 March, with resistance at 1455, 1465, and 1480 March.

<< Page 2 of 2
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.

Comments
comments powered by Disqus