Orange juice higher on continuing crop losses and weather

COFFEE

General Comments: Futures were higher Friday in New York and Sao Paulo, but lower in London. Ideas that Arabica prices are now competitive to Robusta helped. London prices were also lower on reports of beneficial rains in Vietnam. 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. Brazil producers are holding crops for now and are waiting for higher prices before selling, or else some government support via a marketing program. 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 2.741 million bags. The ICO composite price is now 129.71 ct/lb. Brazil should get scattered showers through Wednesday, then drier weather. Temperatures will average near to above normal. Colombia should get a few showers, and Central America and Mexico should get mostly dry conditions. Temperatures should average near to above normal. Vietnam exported 190,000 tons of Coffee in March, up 72.2% from February. Year to date exports are now 896,000 tons, from 760,000 tons last year.

Chart Trends: Trends in New York are mixed to down with objectives of 125.00 and 108.00 May. Support is at 134.00, 131.00, and 128.00 May, and resistance is at 138.00, 140.00, and 141.00 May. Trends in London are mixed to down with objectives of 2120, 2070, and 2020 May. Support is at 2130, 2115, and 2100 May, and resistance is at 2140, 2190, 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.

SUGAR

General Comments: Futures closed lower on a stronger US Dollar and on ideas that China has stopped buying for now. Ideas of weak demand and big supplies keep traders negative to prices. The market seems caught in a range between 1800 and 1900 basis New York May, but closed below the support level again and could be starting a new trend down. 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 therough Wednesday, then drier weather is likely.

Chart Trends: Trends in New York are mixed to down with objectives of 1810, 1750, and 1700 May. Support is at 1790, 1780, and 1750 May, and resistance is at 1830, 1850, and 1865 May. Trends in London are down with objectives of 519.00, 511.00, and 507.00 May. Support is at 518.00, 513.00, and 510.00 May, and resistance is at 530.00, 533.00, and 536.00 May.

COCOA

General Comments: Futures closed lower as weather continues good in Africa and as some crop size estimates start to increase. Worries about European demand and a stronger US Dollar also hurt prices. Ideas that production in the coming year will be short helped the bulls. 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 higher today at 4.475 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2110, 2075, and 2035 May, with resistance at 2140, 2160, and 2180 May. Trends in London are mixed. Support is at 1420, 1405, and 1380 May, with resistance at 1465, 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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