Orange juice falls ahead of USDA report

COFFEE

General Comments: Futures were lower in response to news wire reports of increased exports from Brazil and Colombia in March. The reports took all of the supportive influences of the rust losses from Central America and northern South America out of the market. Ideas are that supplies are good for now and can only increase down the road. The new Brazilian harvest is just a couple of months away, and traders expected big offers to develop on rallies. No one had been paying much attention to the reports of rust in Central America and parts of South America and prefer to concentrate on Brazil and also on improving production conditions in Vietnam. Rains have increased in Vietnam and crop conditions have improved. Chart patterns still show the potential for a low to be developing. 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 there are showers around. 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 2.744 million bags. The ICO composite price is now 129.61 ct/lb. Brazil should get scattered showers. Temperatures will average near to above normal. Colombia should get a few showers, and Central America and Mexico should get mostly dry conditions. A few showers are possible in northern Central America and southeastern Mexico. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed. Support is at 135.00, 134.00, and 132.00 May, and resistance is at 141.00, 144.00, and 147.00 May. Trends in London are mixed to down with objectives of 1990 May. Support is at 1995, 1970, and 1950 May, and resistance is at 2030, 2045, and 2060 May. Trends in Sao Paulo are mixed. Support is at 168.00, 166.00, and 163.00 September, and resistance is at 174.00, 176.00, and 177.00 September.

SUGAR

General Comments: Futures closed mostly a little higher in consolidation trading. But, most traders remain bearish on ideas that big production will be available to the market as the Brazil harvest is processed and comes to market. The ISO said last week that there would be a big production surplus this year. Ideas of weak demand and big supplies keep traders negative to prices. Traders know that there might be less production in India and Thailand, but expect Brazil to produce enough to cover any losses. The market could be in a new down trend. So far, no new demand is being reported, and chart patterns continue to look weak. Reports indicate that Brazil will start harvesting next month and that a big offer is expected. Exports from Brazil continue to be very strong overall despite the port problems.

Overnight News: Scattered showers are expected in Brazil. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed to down with objectives of 1725 and 1610 July. Support is at 1760, 1740, and 1710 July, and resistance is at 1790, 1800, and 1810 July. Trends in London are mixed to down with objectives of 486.00 and 481.00 August. Support is at 487.00, 484.00, and 481.00 August, and resistance is at 496.00, 500.00, and 505.00 August.

COCOA

General Comments: Futures closed higher as traders wait for news of the mid-crop harvest in western Africa. The flow of Cocoa from western Africa is strong now, but traders wonder about the quality and size of the mid-crop after some hot and dry weather during the growing season. 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. For now, though, the market seems to be in a longer term trading range. The weather is forecast to be warm and somewhat wet in West Africa this week. For now, traders expect mid-crop production from West Africa to hit the market soon, and wire reports said that the harvest started this week in Nigeria. Malaysia and Indonesia crops appear to be in good condition and weather is called favorable.

Overnight News: Scattered showers are expected in West Africa. Temperatures will average near to 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 4.622 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2140, 2110, and 2075 May, with resistance at 2190, 2220, and 2260 May. Trends in London are mixed. Support is at 1430, 1410, and 1400 May, with resistance at 1480, 1495, and 1520 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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