Sugar falls as production continues to show surplus

FCOJ

General Comments:  Futures closed lower on follow through selling.  Traders are wrestling with more reports of losses from greening disease on the one side and beneficial rains that have hit the state and are expected to hit the state later this week on the other hand.  The growing conditions in Florida are expected to improve with the rains.  Greening disease and what it might mean to production prospects continues to be a primary support item.  Irrigation is widespread, even with recent rains.  Temperatures are warm in the state.  The Valencia harvest is continuing.  Brazil is seeing near to above normal temperatures and dry weather.

Overnight News:  Florida weather forecasts call for scattered showers.  Temperatures will average near to below normal. ICE said that 100 delivery notices were posted today and that total deliveries for the month are 100 contracts.

Chart Trends:  Trends in FCOJ are mixed to down with objectives of 130.00 and 117.00 July.  Support is at 136.00, 135.00, and 132.00 May, with resistance at 140.00, 143.00, and 146.00 May.

COFFEE

General Comments: Futures were mixed to slightly lower in very quiet trading.  Much of the Coffee world had the day off for May Day and the lack of participation was reflected in the price action.  Prices in general have been weak as traders anticipate another big crop out of Brazil starting the summer, and bears note that recently improved rains should help increase Vietnamese production potential this year.  Ideas are that supplies available to the market are good.  Rains continue in Vietnam and crop conditions have improved in the last week.  Current crop development is still good this year in Brazil, but it has been dry for the past week and dry conditions are forecast to continue.  Central America crops are mostly harvested and is too dry for good new crop flowering.  Colombia is reported to have good conditions.

Overnight News:  Certified stocks are lower today and are about 2.734 million bags.  ICE delivery notices are 21 contracts today and now total 158 contracts for the month.  The ICO composite price is now 126.43 ct/lb.  Brazil should get mostly dry conditions.  Temperatures will average near to above normal.  Colombia should get scattered 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 to down with objectives of 126.00 and 116.00 July.  Support is at 133.00, 131.00, and 128.00 July, and resistance is at 138.00, 140.00, and 142.00 July.  Trends in London are mixed to down with objectives of 1950 July.  Support is at 1970, 1955, and 1925 July, and resistance is at 2025, 2035, and 2050 July.  Trends in Sao Paulo are mixed to down with objectives of 161 September.  Support is at 163.00, 162.00, and 161.00 September, and resistance is at 166.00, 167.50, and 170.00 September.

COCOA         

General Comments:  Futures closed higher.  Chart patterns suggest further rallies could be coming down the road and demand has been better than trade expectations.  The flow of Cocoa from western Africa is down for seasonal considerations, and traders wonder about the quality and size of the mid-crop after some hot and dry weather during the growing season.  Ideas are that production in West Africa could be less next crop year as well despite the improved weather as farmers have not liked offered prices.  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, although some say that too much rain is hurting the harvest in Indonesia.

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 4.679 million bags. ICE said 15 delivery notices were posted against May contracts today and that total deliveries are now 743 contracts.

Chart Trends:  Trends in New York are mixed to up with objectives of 2530 July.  Support is at 2370, 2320, and 2295 July, with resistance at 2435, 2460, and 2490 July.  Trends in London are mixed.  Support is at 1545, 1515, and 1490 July, with resistance at 1570, 1590, and 1610 July.

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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