Orange juice waits for Friday’s USDA estimates

COFFEE

General Comments: Futures were higher in New York and Sao Paulo, with Little offer noted from producers. London was closed. Brazil producers are waiting for the government to formally announce its support program for the year, but for now any decision remains with the monetary authorities there. Prices in general have been weak as traders anticipate another big crop out of Brazil starting the Summer, and bears note that better rains should help increase Vietnamese production potential this year. Ideas are that supplies available to the market are good. 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, although rains are in the forecast for this week. Colombia is reported to have good conditions.

Overnight News: Certified stocks are higher today and are about 2.742 million bags. ICE delivery notices are 1 contract today and now total 159 contracts for the month. The ICO composite price is now 130.56 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. Support is at 135.00, 133.00, and 131.00 July, and resistance is at 142.00, 145.00, and 147.00 July. Trends in London are mixed to up with objectives of 2050, 2090, and 2150 July. Support is at 2010, 1970, and 1955 July, and resistance is at 2035, 2050, and 2075 July. Trends in Sao Paulo are mixed. Support is at 170.00, 167.00, and 165.00 September, and resistance is at 173.00, 175.00, and 178.00 September.

SUGAR

General Comments: Futures closed higher on what appeared to be speculative short covering. The market feels sold out as the bears have not been able to keep the down trend going and are being forced to cover. Traders remain bearish on supplies, especially from Brazil, and this has hurt New York prices. However, the market seems unable to sustain the down trend and might have factored in all the bearish news for now. Traders are keeping an eye on developments in Brazil and expect big production as the harvest moves forward. Brazil mills could concentrate on Ethanol production first and Sugar production second, and that could create some short term shortages for the market. Sugar producers in Russia said that the planting pace has turned slow there as producers wrestle with high costs of production against falling domestic and world prices. Demand is said to be strong from North Africa and the Middle East as buyers get stocks in hand for Ramadan in July. Chart patterns are mixed for the short term.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed to up with objectives of 1840 and 1890 July. Support is at 1760, 1720, and 1710 July, and resistance is at 1800, 1835, and 1850 July. Trends in London are mixed to down with objectives of 486.00 and 481.00 August. Support is at 496.00, 494.00, and 491.00 August, and resistance is at 501.00, 504.00, and 510.00 August.

COCOA

General Comments: Futures closed slightly lower in consolidation trading. It was a quiet news day and some traders decided to liquidate long positions. 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. Reports indicate that bean sizes are small due to the heat and dry weather seen earlier in the year. 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 slightly higher today at 4.6189 million bags. ICE said 0 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 2485 and 2530 July. Support is at 2370, 2320, and 2295 July, with resistance at 2435, 2460, and 2490 July. Trends in London are up with objectives of 1670 July. Support is at 1560, 1545, and 1515 July, with resistance at 1590, 1610, and 1620 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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