COFFEE
General Comments: Futures were higher in all three markets, with little offer noted from producers. Brazil producers got news of the support program from the government yesterday, and the details had largely been leaked or anticipated by the trade. 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 it is too dry for good new crop flowering, although rains are in the forecast for this week. Colombia is reported to have good conditions. The market remains in a trading range for now and is now getting close to the upper end of the range.
Overnight News: Certified stocks are lower today and are about 2.739 million bags. ICE delivery notices are 1 contract today and now total 159 contracts for the month. The ICO composite price is now 131.10 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. Brazil set it minimum Arabica price at 306 real, from 261.69 real before. The Robusta price did not change. The ICO now estimates 2012-13 world Coffee production at 144.7 million bags and estimated 2012 consumption at 142 million bags.
Chart Trends: Trends in New York are mixed. Support is at 139.00, 135.00, and 133.00 July, and resistance is at 145.00, 147.00, and 150.00 July. Trends in London are mixed. Support is at 1980, 1970, and 1955 July, and resistance is at 2030, 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 175.00, 178.00, and 180.00 September.
COTTON
General Comments: Futures were slightly lower yesterday in consolidation trading. Traders are looking ahead to the reports on Friday and also the export sales report on Thursday to see if more demand was found. Ideas are that the demand can continue for now as China moves to increase its stocks and as private buyers there reject offers from the government due to quality and price. Planting conditions for the next crop remain a problem in the US. Rains will move through the Delta and Southeast again late this week to keep progress slow. 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. So far, planting of all crops is slow, and Cotton progress could slow down again with showers in the forecast for the Delta and Southeast this weekend. Short term trends are mixed.
Overnight News: The Delta and Southeast will see mostly dry weather until rains develop in the Delta on Friday and in all areas on Saturday. Temperatures will average above normal. Texas will get mostly dry weather this week and some scattered and light showers on Friday and Saturday. Temperatures will average near to above normal, then below normal this weekend. The USDA spot price is now 82.18 ct/lb. ICE said that certified Cotton stocks are now 0.492 million bales, from 0.493 million yesterday. ICE said that delivery notices were 0 contracts today and now total 609 contracts for the month.
Chart Trends: Trends in Cotton are mixed. Support is at 86.25, 85.50, and 85.00 July, with resistance of 87.60, 88.05, and 88.50 July.
Next page: Orange Juice, Sugar and Cocoa
FCOJ
General Comments: Futures closed lower in consolidation trading. Many are now looking ahead to Friday and the next USDA Oranges production estimates. USDA is expected to keep the crop production estimate unchanged, but might lower the total production by up to 1.0 million boxes. Traders are wrestling with more reports of losses from greening disease on the one side and beneficial rains that have hit the state. The growing conditions in Florida are expected to improve with the recent rains, but drier weather is expected for the rest of this week. 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 mostly dry conditions. Temperatures will average near to above normal and above normal this weekend. ICE said that 0 delivery notices were posted today and that total deliveries for the month are 104 contracts. Cocoa Cola announced that it would commit $2 billion to support planting of new Orange trees in Florida.
Chart Trends: Trends in FCOJ are mixed to down with objectives of 130.00 and 117.00 July. Support is at 136.00, 132.00, and 131.00 July, with resistance at 141.00, 145.00, and 146.00 July.
SUGAR
General Comments: Futures closed lower in light volume trading. It was mostly a consolidation day yesterday. 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. Support is at 1760, 1720, and 1710 July, and resistance is at 1800, 1835, and 1850 July. Trends in London are mixed. Support is at 491.00, 488.00, and 485.00 August, and resistance is at 502.00, 504.00, and 510.00 August.
COCOA
General Comments: Futures closed slightly lower in consolidation trading. It was a quiet news day. Chart patterns suggest further rallies could be coming down the road and demand has been better than trade expectations. However, a short term correction is possible as futures have made initial targets for the move. 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.
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 sharply higher today at 4.792 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 mixed to up with objectives of 1670 July. Support is at 1560, 1545, and 1515 July, with resistance at 1590, 1610, and 1620 July.
