COCOA
General Comments: Futures closed higher. Ideas that production in the coming year will be short helped the bulls as did a weaker U.S. 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 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 isolated showers. Temperatures should average near normal. Brazil will get mostly dry conditions and warm temperatures. ICE certified stocks are lower today at 4.432 million bags. LIFFE stocks are 6,941 standard lots, 216 large lots and 7 bulk lots.
Chart Trends: Trends in New York are mixed to up with objectives of 2240 and 2370 May. Support is at 2150, 2110, and 2075 May, with resistance at 2190, 2220, and 2250 May. Trends in London are mixed. Support is at 1440, 1420, and 1405 May, with resistance at 1475, 1495, and 1510 May.
COTTON
General Comments: Futures were lower yesterday on less than expected export sales. News that India and China would sell into local markets from government supplies in an effort to keep prices down on Tuesday had its effect as well. The market has already rallied a lot and now seems to be correcting lower. A sideways to lower trade could develop until the end of the month and the USDA planting intentions reports. 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. 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.
Overnight News: The Delta and Southeast will see precipitation develop today and this weekend. Temperatures will average near to below normal today and below normal by Sunday. Texas will get dry weather except for a few showers tomorrow. Temperatures will average below to much below normal. The USDA spot price is now 83.18 ct/lb. ICE said that certified Cotton stocks are now 0.424 million bales, from 0.421 million yesterday.
Chart Trends: Trends in Cotton are mixed to down with objectives of 86.25, 82.00, and 78.85 May. Support is at 87.60, 87.20, and 86.20 May, with resistance of 89.10, 89.80, and 90.45 May.
Next page: Orange Juice, Sugar and Coffee
FCOJ
General Comments: Futures closed higher on forecasts from NOAA for a drier than normal Sprin and Summer and 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 1,014 notices were posted against March contracts and that total deliveries for the month are 1,014 contracts.
Overnight News: Florida weather forecasts call for mostly dry conditions or light showers, with best chances for precipitation on Sunday. 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 higher yesterday, with Sao Paulo the leader. News wires quoted the Societe General analyst yesterday as saying the Coffee prices had dropped enough. Brazil producers remain on the sidelines waiting for higher prices and government support programs. 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. 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 little changed today and are about 2.745 million bags. The ICO composite price is now 128.93 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. LIUFFE stocks are now 12,240 lots.
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.
SUGAR
General Comments: Futures closed a little lower on reports that the threatened port strike in Brazil had been cancelled. The congestion in ports has interrupted Sugar shipments as well as grains and oilseeds shipments, but now a major potential roadblock in exports has been reduced or removed. News of less Chinese imports in February hurt the price action as well. 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.
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 525.00, 523.00, and 518.00 May, and resistance is at 533.00, 536.00, and 540.00 May.
