COFFEE
General Comments: Futures were higher again yesterday in New York and Sao Paulo, but lower in London. Arabica prices rallied as traders started to look again at the potential for major losses in producing areas due to the rust. London prices were lower on reports of strong exports from Vietnam in March. 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 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, and major crop losses are being estimated by traders and producers. 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 2.741 million bags. The ICO composite price is now 130.50 ct/lb. Brazil should get scattered showers through Friday, 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.
Chart Trends: Trends in New York are mixed. 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 down with objectives of 2070, 2020, and 1990 May. Support is at 2080, 2065, and 2045 May, and resistance is at 2130, 2140, and 2160 May. Trends in Sao Paulo are mixed. 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 higher on news that the Chinese government would continue to buy from domestic producers to maintain its supplies. Ideas are that this will force private companies there to keep importing Cotton in an effort to keep prices down. There were also reports of increased mill interest for Cotton here in the US due in part to the positive US economic data that was released yesterday morning. Traders were also getting ready for the USDA reports that will be released late tomorrow morning. 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.
Overnight News: The Delta and Southeast will see mostly dry weather until a few showers appear over the weekend. Temperatures will average below normal, but will trend warmer this weekend. Texas will get dry weather except for a few showers on Saturday. Temperatures will average near to below normal this week and near to above normal this weekend. The USDA spot price is now 82.99 ct/lb. ICE said that certified Cotton stocks are now 0.426 million bales, from 0.427 million yesterday.
Chart Trends: Trends in Cotton are mixed to down with objectives of 82.00, 78.85, and 74.95 May. Support is at 87.240, 86.20, and 85.60 May, with resistance of 89.10, 89.80, and 90.45 May.
Next page: Orange Juice, Sugar and Cocoa
General Comments: Futures closed near unchanged in very quiet trading. It was mostly a consolidation trade again. Greening disease and what it might mean to production prospects continues to be a primary support item. 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. Harvest in Florida of mid and early oranges is over, and the Valencia harvest is continuing. Bloom has been reported in groves in all production areas of the state. Brazil is seeing near to above normal temperatures and scattered showers. Drier weather is expected this weekend.
Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average below normal this week, but will trend warmer this weekend. Cold temperatures were reported in parts of Florida overnight and some frost could have developed on buds and flowers.
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.
SUGAR
General Comments: Futures closed lower on ideas of big production, mostly from Brazil. Ideas of weak demand and big supplies keep traders negative to prices. The market 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, but so far no new demand is being reported. 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 through Friday, then drier weather is likely.
Chart Trends: Trends in New York are down with objectives of 1750 and 1700 May. Support is at 1780, 1750, and 1720 May, and resistance is at 1810, 1830, and 1850 May. Trends in London are down with objectives of 511.00 and 507.00 May. Support is at 513.00, 510.00, and 501.00 May, and resistance is at 518.00, 523.00, and 525.00 May.
COCOA
General Comments: Futures closed higher on reports of smaller offers from producing countries, mostly from Ivory Coast. Weather continues good in Africa and as some crop size estimates for next year start to increase. Ideas that production in the coming year will be short overall 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 sharply higher today at 4.617 million bags.
Chart Trends: Trends in New York are mixed. Support is at 2110, 2075, and 2035 May, with resistance at 2190, 2220, and 2235 May. Trends in London are mixed. Support is at 1420, 1405, and 1380 May, with resistance at 1465, 1475, and 1495 May.
