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
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.About the Author
