COFFEE
General Comments: Futures were lower again yesterday in all three markets, with ideas that big selling will need to come from Brazil sooner or later, keeping all buying interest away. An increase in offers from Central America due to sharply higher differentials and from Vietnam due to better weather helped push prices lower. Talk of a big offseason crop coming this year in Brazil 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. Brazil offers are not very strong right now. Reports of rust in Central America and the production cuts that it are still in the press. Central American 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.
Overnight News: Certified stocks are lower today and are about 2.743 million bags. The ICO composite price is now 128.52 ct/lb. Brazil should get scattered showers. 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 119 contracts.
Chart Trends: Trends in New York are down with objectives of 125.00 and 108.00 May. Support is at 131.00, 128.00, and 125.00 May, and resistance is at 138.00, 140.00, and 141.00 May. Trends in London are mixed. Support is at 2140, 2130, and 2115 May, and resistance is at 2200, 2220, and 2250 May. Trends in Sao Paulo are down with objectives of 161.00 May. Support is at 165.00, 162.00, and 159.00 September, and resistance is at 173.00, 177.00, and 180.00 September.
COTTON
General Comments: Futures were mostly a little higher yesterday after trading both sides of unchanged. The market has already rallied a lot and now seems to be forming a congestion area. A sideways to lower trade could develop until the end of the month. Demand ideas remain strong overall based on the strong export paces seen in the USDA reports in recent weeks 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, although the overall certified stocks remain low. The current rally in new crop prices are bringing into question what farmers will plant this year. Some producers in the Delta are noting the recent price rally and might decide to plant more Cotton this year. The plantings intentions report will be released at the end of the month. Indian corporate executives told wire services yesterday that the country might need to import much more Cotton than normal as the government keeps buying from producers but then holds on to the stocks.
Overnight News: The Delta and Southeast will see dry conditions until precipitation develops Friday and this weekend. Temperatures will average near to below normal, then turn warmer this weekend. Texas will get dry weather. Temperatures will average near to above normal this week and near to below normal this weekend. The USDA spot price is now 85.84 ct/lb. ICE said that certified Cotton stocks are now 0.421 million bales, from 0.420 million yesterday.
Chart Trends: Trends in Cotton are mixed to up with objectives of 93.90 May. Support is at 89.80, 88.80, and 87.60 May, with resistance of 91.60, 92.60, and 93.90 May.
Next page: Oragne Juice, Sugar and Cocoa
FCOJ
General Comments: Futures closed higher again on ideas of continuing crop losses from Greening Disease. Forecasts calling for colder temperatures through the end of the month provided some buying interest as well. 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. The temperatures should turn cooler this weekend and should stay cooler all of next week. 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 scattered showers. 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 or light showers. Temperatures will average near to below normal.
Chart Trends: Trends in FCOJ are mixed to up with no objectives. Support is at 134.00, 132.00, and 124.00 May, with resistance at 140.00, 141.00, and 144.00 May.
SUGAR
General Comments: Futures closed a little higher on reports that the port congestion in Brazil was starting to affect Sugar shipments. The market seems caught in a range between 1800 and 1900 basis New York May. Futures seem to uncover new consumptive demand every time the market moves below 1800 in New York and plenty of offers when a rally is made. Reports indicate that Brazil will start harvesting next month and that a big offer is expected. 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 overall despite the port problems.
Overnight News: Scattered showers are expected in Brazil. Iraq has tendered to buy 50,000 tons of Sugar.
Chart Trends: Trends in New York are down with objectives of 1810, 1750, and 1700 May. Support is at 1815, 1790, and 1780 May, and resistance is at 1850, 1865, and 1875 May. Trends in London are mixed to down with objectives of 522.00 and 507.00 May. Support is at 523.00, 518.00, and 513.00 May, and resistance is at 531.00, 536.00, and 540.00 May.
COCOA
General Comments: Futures closed higher in recovery trading. The market is trying to mount a seasonal rally now that the main harvest is over in Western Africa. 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 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 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 isolated showers. Temperatures should average near normal. Brazil will get mostly dry conditions and warm temperatures. ICE certified stocks are lower today at 4.445 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2075, 2055, and 2035 May, with resistance at 2135, 2155, and 2175 May. Trends in London are mixed to down with objectives of 1400 May. Support is at 1405, 1385, and 1370 May, with resistance at 1435, 1455, and 1475 May.
