COTTON
General Comments: Futures were higher again yesterday on more talk of strong export demand. Talk indicates that the buying was active over the weekend and has remained active early this week. Ideas of less planted area also supported Cotton futures again, but most of the talk was of the new demand. The current low new crop 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. The plantings intentions report will be released at the end of the month. Texas areas should turn drier for the rest of the week. Delta and Southeast areas will see mostly dry weather.
Overnight News: The Delta and Southeast will see dry conditions. Temperatures will average mostly below normal this week and then near to above normal. Texas will get dry weather. Temperatures will average below normal today, but above normal starting Thursday until near normal temperatures come back on Sunday. The USDA spot price is now 81.46 ct/lb. ICE said that certified Cotton stocks are now 0.436 million bales, from 0.431 million yesterday. ICE said that 1 contract was delivered yesterday and that total deliveries for the month are 1,542 contracts. USDA said that net Upland Cotton export sales were 150,200 bales this year and 67,100 bales next year. Net Pima sales were 24,200 bales this year and 1,900 bales next year.
Chart Trends: Trends in Cotton are up with objectives of 89.00 May. Support is at 85.80, 85.20, and 84.00 May, with resistance of 87.50, 88.90, and 89.20 May.
FCOJ
General Comments: Futures closed a little lower as temperatures in Florida moved a little higher. It was a cold weekend in Florida, and frosts and freezes were possible over the weekend. Temperatures had been warm in the state until the weekend, and conditions are dry, and talk about the potential for more fruit drop and poor development of the crop for next year returned. Crop development is reported to be far enough along that some damage or loss is possible. Some buds could have been lost and that will mean less production potential for next year if the loss is confirmed. Traders also note that dry weather is stressing trees and could hurt overall production potential for next year. Harvest in Florida of mid and early oranges is almost over, and the Valencia harvest is underway. Bloom has been reported in groves in all production areas of the state. Brazil is seeing near to above normal temperatures and light showers and could use more rain. ICE said that 0 notices were posted against March contracts and that total deliveries for the month are 0 contracts.
Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average below normal.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 117.00 and 109.00 May. Support is at 120.00, 118.00, and 115.00 May, with resistance at 125.00, 129.00, and 132.00 May.
Next page: Coffee, Sugar and Cocoa
COFFEE
General Comments: Futures were a little higher yesterday after trading both sides of unchanged. Ideas of big supplies, mostly from Brazil, keep the selling alive. Some support came from news that Colombia Coffee farmers will not deliver as they seek higher prices for crops and some support came from even more reports of severe rust damage in Central America. Reports of rust in Central America and the production cuts that it are still in the press, and rust is now reported in Peru. Central America could lose at least 20% of the total crop this year. Losses next year could be 30% or more of the crop. Current crop development is still good this year in Brazil, and production areas are getting drier weather for the developing crop. There is some talk the drier weather could stress trees. Production ideas remain big there. Vietnam producers there talk about the potential for 25% crop losses due to prolonged drought in the Central Highlands. Central America crops are mostly harvested. Colombia is reported to have good conditions.
Overnight News: Certified stocks are higher today and are about 2.709 million bags. The ICO composite price is now 131.69 ct/lb. Brazil should get mostly dry weather. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get mostly dry conditions. Temperatures should average near to above normal. ICE said that 0 contracts were delivered today against March futures and that total deliveries for the month are 108 contracts.
Chart Trends: Trends in New York are mixed. Support is at 137.00, 134.00, and 131.00 May, and resistance is at 145.00, 147.00, and 149.00 May. Trends in London are mixed. Support is at 2080, 2070, and 2040 May, and resistance is at 2130, 2140, and 2170 May. Trends in Sao Paulo are mixed. Support is at 177.00, 174.00, and 171.00 September, and resistance is at 183.00, 185.00, and 187.00 September.
SUGAR
General Comments: Futures closed a little higher. Chart trends in London and New York are now mixed. Big supplies of Sugarcane and Raw Sugar keep price trends in check, and the market remains in a sideways trend even though trends are trying to turn up. Production has been strong in Brazil so far this year, and reports say that the new crop production looks to be strong as well, so the diversion into more domestic ethanol use will help offset increased sugarcane production. Exports from Brazil continue to be very strong. Exports from other countries are said to be less than expected, but the Brazil offer keeps futures from doing much these days.
Overnight News: Mostly dry weather expected in Brazil. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 1790, 1770, and 1740 May, and resistance is at 1860, 1875, and 1900 May. Trends in London are mixed. Support is at 513.00, 512.00, and 506.00 May, and resistance is at 520.00, 523.00, and 527.00 May.
COCOA
General Comments: Futures closed lower in consolidation trading. New York was the leader on the downside as the US Dollar moved higher. Market trends are still down overall, but futures are within about 100 dollars of a potential swing low based on the charts. Ideas are that current low prices should créate new demand and that the main crop harvest is over in Western Africa and much of Asia so that supplies on offer could also be less. The weather is forecast to be warm and dry in West Africa this week. For now, traders expect good mid crop production from West Africa. Malaysia and Indonesia crops appear to be in good condition and weather is called favorable. Traders are starting to look ahead and past the midcrop harvest and note that the market could move to a production déficit next year. More buying is being noted in deferred months at this time due to smaller production ideas for the coming crops.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average 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 said that 0 contracts were delivered today against March contracts and that total deliveries for the month are now 826 contracts. ICE certified stocks are lower today at 4.363 million bags.
Chart Trends: Trends in New York are down with objectives of 2050, 2020, and 1990 May. Support is at 2050, 2020, and 2000 May, with resistance at 2100, 2110, and 2130 May. Trends in London are down with objectives of 1390 and 1365 May. Support is at 1360, 1330, and 1300 May, with resistance at 1405, 1435, and 1450 May.
