Sugar falls as large Brazil harvest continues

FCOJ

General Comments: Futures closed higher after trading both sides of unchanged as traders continue to look for reduced production in Florida this year. Some good rains were seen in the state over the weekend, but drought conditions persist overall. 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. Brazil is seeing near to above normal temperatures and dry weather.

Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average near to above normal.

Chart Trends: Trends in FCOJ are mixed to down with objectives. Support is at 144.00, 141.00, and 140.00 May, with resistance at 152.00, 155.00, and 158.00 May.

COFFEE

General Comments: Futures were mixed in consolidation trading. London was a little higher and shows signs of completing a bottom. Spreads in both London and New York 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 2.738 million bags. The ICO composite price is now 128.97 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 135.00, 1232.00, and 129.00 May, and resistance is at 138.00, 141.00, and 142.00 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.

COCOA   

General Comments: Futures closed higher on follow through buying. The European grind data was less than last year, but better than the market had expected and ended up providing only mild pressure on prices. Chart patterns suggest further rallies could be coming and fundamentals for the short term could support the charts. The flow of Cocoa from western Africa is weaker, and traders wonder about the quality and size of the mid crop after some hot and dry weather during the growing season. However, weather has improved in western Africa lately with more rain and somewhat cooler temperatures. Ideas are that production in West Africa could be less next crop year as well. Demand remains a big problem, with analysts looking for lower grind data from Europe when the data is released today. The mid crop harvest is underway, and less than expected production along with smaller beans is reported. 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 lower today at 4.731 million bags. ICE said 37 delivery notices were posted against May contracts today and that total deliveries are now 727 contracts.

Chart Trends: Trends in New York are up with objectives of 2370 and 2530 July. Support is at 2275, 2255, and 2220 July, with resistance at 2330, 2350, and 2385 July. Trends in London are up with objectives of 1580 and 1670 July. Support is at 1490, 1455, and 1430 July, with resistance at 1560, 1570, and 1590 July.

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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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