Sugar trades higher on reports of Brazil port congestion

FCOJ

General Comments: Futures closed lower on forecasts for some rains to move into the state of Florida this weekend, but held support on ideas of continuing crop losses from Greening Disease. Forecasts calling for colder temperatures through the end of the month provided some buying interest. 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, but some rain could come with the cooler temperatures. 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. 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. 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 in London and Sao Paulo, with ideas that big selling will need to come from Brazil sooner or later keeping all buying interest away. Better weather in Vietnam hurt prices in London. New York was higher on some hopes for new demand after Bloomberg News noted that some roasters may start to put more Arabica in blends instead of Robusta as prices of Arabica are now cheap enough. 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. 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 higher today and are about 2.746 million bags. The ICO composite price is now 128.55 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 2170, 2200, and 2220 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.

COCOA

General Comments: Futures closed higher in recovery trading. Ideas that production in the coming year will be short helped the bulls as did a weaker US Dollar 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 4.433 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2110, 2075, and 2055 May, with resistance at 2155, 2175, and 2190 May. Trends in London are mixed. Support is at 1420, 1405, and 1385 May, with resistance at 1455, 1475, and 1495 May.

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About the Author
Jack Scoville

Jack Scoville is a veteran futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. His industry contacts in South America, Europe, Asia, and North America provide him with a unique and comprehensive view of these markets. Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles, starting with The PRICE Futures Group since it was established in 1988. Jack writes daily commentaries - Morning Grains and Softs, in both English and Spanish and is regularly quoted around the world by news & wire services including Dow Jones, AP, Bloomberg, and Reuters. You can contact Jack by phone at (312) 264-4322 or by email at jscoville@pricegroup.com. Learn even more on our website at www.pricegroup.com.

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.

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