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
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.About the Author
