Cotton cashes in on corn, soybean weakness

COTTON

General Comments: Futures were lower on speculative selling tied to ideas of weaker demand because of the Chinese and U.S. economic data and on some ideas of increasing planted area due to recent weakness in Corn and Soybeans. Some traders think that U.S. planted area will increase from the estimates released at the end of March because of more favorable Cotton futures prices and sinking Corn and Soybeans futures prices. Corn and Soybeans futures could show some stability for the short term after the dramatic price action over the last week. Weather will also be watched as more wet weather in the Delta and Southeast could create less interest in Corn and more in Cotton to avoid having Corn pollinate in the hottest time of the year. 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, but export demand is a little less lately.

Overnight News: The Delta and Southeast will see mostly dry weather except for rain Wednesday and Thursday. Temperatures will trend to below normal this week. Texas will get dry weather. Temperatures will average near to below normal. The USDA spot price is now 82.17 ct/lb. ICE said that certified Cotton stocks are now 0.421 million bales, from 0.422 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 86.20, 85.60, and 84.00 May, with resistance of 87.10, 87.80, and 88.70 May.

FCOJ

General Comments: Futures closed firm again as bulls talked of increasing crop losses in Florida due to the greening disease, drought, and cold temperatures that were seen a couple of weeks ago. Ideas are that USDA could drop production estimates by another 1.0 million boxes in its reports this week. Greening disease and what it might mean to production prospects continues to be a primary support item. Weather is good for production overall, but more rain is needed. Irrigation is widespread, even with some rains late last week. 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 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.

Overnight News: Florida weather forecasts call for mostly dry conditions, but some precipitation is likely on Friday. Temperatures will average near to above normal.

Chart Trends: Trends in FCOJ are up with objectives of 152.00 May. Support is at 142.00, 134.00, and 132.00 May, with resistance at 141.00, 144.00, and 147.00 May.

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