Orange juice moves higher as USDA maintains estimates

COFFEE

General Comments: Futures were higher in all three markets as moderate volume buying from speculators and roasters found very little selling interest.  Some forecasts for colder temperatures in Brazil supported futures once again, and the market seemed more interested in owning supplies in the wake of the Brazil support price news.  Weather in other areas like Central America, where it has been dry, also provided some support.  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.  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 unchanged today and are about 2.744 million bags.  The ICO composite price is now 131.93 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 showers and rains.  Temperatures should average near to above normal. 

Chart Trends:  Trends in New York are mixed to up with objectives of 510.00, 160.00, and 175.00 July.  Support is at 140.00, 136.00, and 132.00 July, and resistance is at 149.00, 150.00, and 152.00 July.  Trends in London are mixed to up with objectives of 2090, 2150, and 2215 July.  Support is at 2020, 1980, and 1970 July, and resistance is at 2055, 2075, and 2100 July.  Trends in Sao Paulo are up with objectives of 186.00, 187.00, and 192.00 September.  Support is at 174.50, 171.50, and 170.00 September, and resistance is at 180.00, 182.00, and 183.00 September.

SUGAR        

General Comments:  Futures closed lower in light volume trading.  Traders are still talking about big production in Brazil and around the world.  Traders remain bearish on supplies, especially from Brazil, and this has hurt New York prices.  They got some big production and processing estimates for April yesterday.  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, but weak, for the short term.  UNICA said that Brazil crushed 41 million tons of Sugarcane and produced 1.69 million tons of Sugar.  Both amounts are almost triple those of a year ago.

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 down with objectives of 1610 July.  Support is at 1720, 1710, and 1680 July, and resistance is at 1775, 1800, and 1835 July.  Trends in London are mixed to down with objectives of 481.00 August.  Support is at 482.00, 479.00, and 476.00 August, and resistance is at 496.00, 502.00, and 504.00 August.

COCOA        

General Comments:  Futures closed lower a little higher in recovery trading after the big down moves last week.  It was another quiet news day.  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.  The weather now is good, with more moderate temperatures and some rains.  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 4.898 million bags.

Chart Trends:  Trends in New York are mixed to down with no objectives.  Support is at 2285, 2275, and 2235 July, with resistance at 2340, 2370, and 2390 July.  Trends in London are mixed to down with objectives of 1500 and 1465 July.  Support is at 1515, 1490, and 1480 July, with resistance at 1565, 1580, 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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