COFFEE
General Comments: Futures were higher after trading both sides of unchanged. Prices remain in the recent trading range. Current crop development is good this year in Brazil, and production areas are getting beneficial showers for the developing crop. Production ideas remain big there, and also remain big in Vietnam, where exports were big for January. However, Vietnam sources told wire services yesterday that the crop next year could drop 25% due to poor weather. Prices quoted for Brazil coffee are very close to those for Central American varieties. 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 was mentioned by the press in a big way yesterday. 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 2.621 million bags. The ICO composite price is now 133.68 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. Ukraine Sugara production from local beets is now 2.22 million tons, down 5% from last year.
Chart Trends: Trends in New York are mixed. 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 181.00, 179.50, and 179.00 March, and resistance is at 185.00, 188.00, and 190.00 March.
COTTON
General Comments: Futures were a little higher in recovery trading as an important support area on the charts held. Trends remain up as traders contemplate less planted area next year and strong export sales. Bull spreads will be 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 another failed Chinese government auction held over the weekend. 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 showers and storms are expected today and tomorrow. 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 75.68 ct/lb. ICE said that certified Cotton stocks are now 0.115 million bales, from 0.112 million yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 9100 March. Support is at 80.20, 79.90, and 78.00 March, with resistance of 84.00, 85.25, and 87.00 March.
Next page: Orange Juice, Sugar and Cocoa
FCOJ
General Comments: Futures closed mixed to higher in light volume trading. Weather remains good in Florida. Temperatures remain mild in the state, and conditions are mostly dry. Forecasts call for mostly dry conditions and mild temperatures to continue for now, but a cold front is expected to bring a chill to the state by next week. Forecasts do not call for any threatening temperatures, but the talk of colder weather created some buying in the nearby months. 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, and the Valencia harvest is underway. Demand for domestically produced Juice remains down from last year. Weather in Brazil is reported to be good. Brazil is seeing normal temperatures and scattered showers. 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, but showers are likely on Wednesday. Temperatures will average above normal.
Chart Trends: Trends in FCOJ are mixed. Support is at 113.00, 110.00, and 109.00 March, with resistance at 118.00, 122.00, and 126.00 March.
SUGAR
General Comments: Futures closed higher and charts assumed a more bullish look on what appeared to be speculative buying called short covering by traders. Some stops were hit when futures took out the highs from last week in early trading. The fundamental situation still appears negative. 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 week. Temperatures should be near normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1910, 1950, and 1965 March. Support is at 1855, 1825, and 1805 March, and resistance is at 1905, 1920, and 1960 March. Trends in London are mixed to up with objectives of 500.00 and 510.00 March. Support is at 490.00, 480.00, and 475.00 March, and resistance is at 501.00, 503.00, and 515.00 March.
COCOA
General Comments: Futures closed lower. Good arrivals in Africa are negative and are continuing. Ivory Coast arrivals are strong, and weak demand ideas are still around. 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 and for the mid-crop and next crop. 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 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 sharply higher today at 3.830 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 1440, 1455, and 1465 March.
