COCOA
General Comments: Futures closed a little lower. Ideas are that current low prices should create 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 somewhat wet 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 deficit 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 0 contracts were delivered today against March contracts and that total deliveries for the month are now 840 contracts. ICE certified stocks are lower today at 4.346 million bags.
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2110, 2085, and 2055 May, with resistance at 2155, 2175, and 2190 May. Trends in London are up with objectives of 1490 and 1565 May. Support is at 1435, 1405, and 1385 May, with resistance at 1455, 1475, and 1495 May.
COTTON
General Comments: Futures were higher again yesterday in response to the strong export paces seen in the USDA reports yesterday and on reports of tight domestic and world cash markets. Demand is still said to be strong, and sales for export have held up well given the price strength in recent weeks. The rally is coming at a time when certified stocks are building as well. The current low new crop prices are bringing into question what farmers in Texas and the Delta and Southeast will plant this year. Some 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, with warmest readings in the Delta. Texas will get dry weather. Temperatures will average above normal. The USDA spot price is now 85.58 ct/lb. ICE said that certified Cotton stocks are now 0.420 million bales, from 0.426 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 up with objectives of 93.90 May. Support is at 90.00, 89.20, and 88.80 May, with resistance of 91.50, 91.60, and 92.00 May.
Next page: Orange Juice, Sugar and Coffee
FCOJ
General Comments: Futures closed a little lower again as the market paused for one more day after the big rally. Traders continue to factor in less production potential due to the greening disease and drought. Temperatures are warm in the state, 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 missed to up with objectives of 137.00 May. Support is at 134.00, 132.00, and 124.00 May, with resistance at 140.00, 141.00, and 144.00 May.
COFFEE
General Comments: Futures were lower again yesterday. Talk of a big offseason crop coming this year kept ideas that there will be a lot of Coffee for buyers around. Brazil has Coffee to sell, but production in other countries is more problematical. Reports of rust in Central America and the production cuts that it are still in the press. 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, although there are a few showers around. There is some talk the drier weather could stress trees. Production ideas remain big there. Central America crops are mostly harvested. Colombia is reported to have good conditions, but some now talk of less than expected production.
Overnight News: Certified stocks are higher today and are about 2.737 million bags. The ICO composite price is now 131.97 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 113 contracts.
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 mixed to up with objectives of 2230 May. Support is at 2160, 2140, and 2130 May, and resistance is at 2190, 2220, and 2250 May. Trends in Sao Paulo are mixed. Support is at 174.00, 171.00, and 168.00 September, and resistance is at 183.00, 185.00, and 187.00 September.
SUGAR
General Comments: Futures closed a little lower in consolidation trading. The market is congesting for another move, and for now the congestion area looks as much like a bull flag as anything. Chart trends in London and New York are mostly up, but the bulls have not been able to push New York prices above 1900 May, at least not yet. Ample offers seem to appear above that level. Futures seem to uncover new consumptive demand every time the market moves below 1800 in New York. 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. Reports from Brazil say that the new crop production looks to be strong, 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 1850, 1835, and 1815 May, and resistance is at 1900, 1920, and 1940 May. Trends in London are mixed to up with objectives of 543.00 and 576.00 May. Support is at 531.00, 529.00, and 527.00 May, and resistance is at 540.00, 541.00, and 544.00 May.
