Coffee moves higher after possible bottom

COFFEE

General Comments: Futures were higher as outside markets held better.  London was higher and shows signs of completing a bottom.  Spreads have been firm, implying the market has demand and less offer.  Prices in general have been weak as traders anticipate another big crop out of Brazil starting the Summer and as traders move out of May positions before the deliveries start.  Ideas are that supplies are good for now and can only increase down the road as Brazil will soon start to harvest.  Rains have increased in Vietnam and crop conditions have improved.  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 and is too dry for new crop flowering.  Colombia is reported to have good conditions.

Overnight News:  Certified stocks are lower today and are about 2.754 million bags.  The ICO composite price is now 128.67 ct/lb.  Brazil should get mostly dry conditions.  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 late this week.  Temperatures should average near to above normal.

Chart Trends:  Trends in New York are mixed.  Support is at 132.00, 129.00, and 126.00 May, and resistance is at 136.00, 138.00, and 141.00 May.  Trends in London are mixed to up with objectives of 2075 May.  Support is at 2010, 1980, and 1970 May, and resistance is at 2045, 2060, and 2080 May.  Trends in Sao Paulo are down with objectives of 161.00 September.  Support is at 166.00, 163.00, and 160.00 September, and resistance is at 168.00, 171.00, and 174.00 September.

COTTON

General Comments:  Futures were lower in response to disappointing economic data from China.  Most commodities markets moved lower to sharply lower, and precious metals and the petroleum complex led the way down.  USDA showed slow planting progress in its reports today as weather remains a big issue.  Some traders think that US planted area will increase from the estimates released at the end of March due to more favorable Cotton futures prices and sinking Corn and Soybeans futures prices.  Weather will 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 rains and storms through the end of the week and a dry weekend.  Temperatures will average near to below normal.  Texas will get dry weather.  Temperatures will average much below normal.  The USDA spot price is now 79.14 ct/lb.  ICE said that certified Cotton stocks are now 0.468 million bales, from 0.462 million yesterday.  India now expects to import 2.5 million bales of Cotton this year, from 1.2 million last year.

Chart Trends:  Trends in Cotton are mixed.  Support is at 84.00, 83.50, and 82.60 May, with resistance of 86.20, 86.50, and 87.10 May.

Next page: Orange Juice, Sugar and Cocoa

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