COFFEE
General Comments: Futures were higher again Friday on statements from the ICO that Central America could lose 2.5 million bags of Coffee this year and 4.0 million next year due to rust. The crops in Vietnam need rain but have not been getting very much if any, and there is no relief in sight. Producers there say losses could be 25% of the production of last year, and offers from there have started to move lower in volume. Ideas of big supplies, mostly from Brazil, keep the selling alive. Reports of rust in Central America and the production cuts there 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 2.721 million bags. The ICO composite price is now 134.33 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. Brazil exported 1.94 million bags of Coffee in February, down 2% from last year. Marketing year to date exports are now 20.93 million bags, down 5.2% from last year. LIFFE stocks are now 12,582 lots.
Chart Trends: Trends in New York are mixed. Support is at 140.00, 137.00, and 134.00 May, and resistance is at 145.00, 147.00, and 149.00 May. Trends in London are up with objectives of 2230 May. Support is at 2140, 2130, and 2115 May, and resistance is at 2190, 2205, and 2220 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.
COTTON
General Comments: Futures were higher Friday, but closed well off the highs of the day as some profit taking was noted after a sharp rally in response to the USDA reports. USDA showed increased demand and less ending stocks for the US. Meanwhile, demand is still said to be strong even though USDA has made no announcements so far 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, although producers in the Delta are noting the recent price rally and might decide to plant more Cotton 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.
Overnight News: The Delta and Southeast will see dry conditions. Temperatures will average mostly below normal early this week and then near to above normal. Texas will get dry weather. Temperatures will average above normal. The USDA spot price is now 81.45 ct/lb. ICE said that certified Cotton stocks are now 0.415 million bales, from 0.413 million yesterday. ICE said that 0 contracts were delivered yesterday and that total deliveries for the month are 1,542 contracts.
Chart Trends: Trends in Cotton are mixed to up with objectives of 89.00 May. Support is at 86.10, 85.80, and 85.20 May, with resistance of 87.50, 88.70, and 88.90 May.
Next page: Orange Juice, Sugar and Cocoa
FCOJ
General Comments: Futures closed higher as USDA showed less production potential than had been expected by the trade. The report noted increasing losses due to Greening Disease. Warm and dry conditions are stressing crops as well. The frosts and freezes seen a week ago could also affect current production, but are more likely to affect production potential for next year as flowers could be lost. 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 continues. 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. More rain is possible there late in the week. 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 near to below normal.
Chart Trends: Trends in FCOJ are up with objectives of 137.00 May. Support is at 125.00, 122.00, and 120.00 May, with resistance at 135.00, 141.00, and 144.00 May.
SUGAR
General Comments: Futures closed a little lower in consolidation trading. Chart trends in London and New York are up. Futures seem to uncover new consumptive demand every time the market moves below 12800 in New York, and it seems that the bearish talk of big supplies for the coming year might be part of the price structure. Reports indicate that the Chinese have been using price weakness to buy more Sugar than the trade had anticipated. Brazil will start to offer a little less as mills there prepare for greater domestic Ethanol demand as blends for cars have been changed by the government. The blend will contain 25% ethanol, from 20% now. Middle East demand seems stronger as well as the festival season approaches. This was shown by the big purchases by Iraq in recent weeks. 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.
Overnight News: Mostly dry weather expected in Brazil. Temperatures should be near to above normal.
Chart Trends: Trends in New York are mixed to up with objectives of 1900 and 1990 May. Support is at 1835, 1815, and 1790 May, and resistance is at 1900, 1920, and 1940 May. Trends in London are up with objectives of 543.00 and 576.00 May. Support is at 531.00, 527.00, and 523.00 May, and resistance is at 540.00, 541.00, and 544.00 May.
COCOA
General Comments: Futures closed higher on what appeared to be a huge short covering rally. Futures have tested into target áreas for the move and could experience more short covering for the next few sessions. Ideas of new demand at the current lower prices helped créate the rally. Representatives of Barry Callebrut talked about this at a press conference last week. Market trends are still down overall. 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: Scattered showers 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 said that 11 contracts were delivered today against March contracts and that total deliveries for the month are now 837 contracts. ICE certified stocks are lower today at 4.352 million bags. LIFFE stocks are 5,307 standard units, 176 large units, and 6 bulk units.
Chart Trends: Trends in New York are mixed. Support is at 2070, 2025, and 2020 May, with resistance at 2130, 2145, and 2155 May. Trends in London are mixed. Support is at 1405, 1380, and 1360 May, with resistance at 1450, 1475, and 1505 May.
Futures were higher again Friday on statements from the ICO that Central America could lose 2.5 million bags of Coffee this year and 4.0 million next year due to rust.
