Cotton climbs on poor planting conditions

COFFEE

General Comments: Futures were lower again, with little in the way of news to affect prices much one way or another. Reports of producer selling combined with some speculative selling to push prices to the lows. Brazil weather remains mostly dry, but some areas of Sao Paulo could see a shower, which would be beneficial. Weather in other areas like Central America, where it has been dry, also provided some support. Trends have turned sideways to down after the recent run to higher values. Prices in general have been weak as traders anticipate another big crop out of Brazil starting the Summer, and CONAB showed a big production potential in its latest production report released last week. Current crop development is still good this year in Brazil, but it has been dry. Dry conditions are forecast to continue in most areas, but some parts of Sao Paulo, mostly southern areas, could get showers. 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 higher today and are about 2.746 million bags. The ICO composite price is now 128.01 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 away from some showers in Eastern Mexico and northern Central America. Temperatures should average near to above normal. Safras e Mercado said Friday that Brazil producers have sold 83% of the 2012-13 crop. Vendieron 92% de la production e esa fecha de 2012.

Chart Trends: Trends in New York are down with objectives of 138.00, 126.00, and 116.00 July. Support is at 136.00, 132.00, and 131.00 July, and resistance is at 141.00, 143.00, and 146.00 July. Trends in London are mixed. Support is at 2030, 2020, and 2000 July, and resistance is at 2060, 2075, and 2100 July. Trends in Sao Paulo are mixed. Support is at 170.00, 167.50, and 165.00 September, and resistance is at 176.00, 180.00, and 181.50 September.

SUGAR  

General Comments: Futures closed a Little higher in consolidation trading. There were some reports of shipments getting booked ahead of the Ramadan holiday to give a fundamental reason for the price stability. 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 last week. Traders are keeping an eye on developments in Brazil and expect big production as the harvest moves forward as the weather is good. 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 weak. The northeast part of Brazil has been hurt by drought and Sugar production has been affected.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should average near to above normal. China will stockpile 300,000 tons of domestic Sugar starting late this week in an effort to support prices there.

Chart Trends: Trends in New York are down with objectives of 1670, 1610, and 1600 July July. Support is at 1680, 1650, and 1620 July, and resistance is at 1720, 1740, and 1755 July. Trends in London are down with no objectives. Support is at 476.00, 473.00, and 470.00 August, and resistance is at 487.00, 491.00, and 496.00 August.

COCOA  

General Comments: Futures closed slightly higher in consolidation trading. It was another quiet news day. There is less on offer from West Africa, 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. Demand remains an issue. Some deliveries were made in London last week as some processors in Europe have cut back on operations. It is a sign of weaker consumer demand there.

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 4.987 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2285, 2275, and 2255 July, with resistance at 2335, 2365, and 2370 July. Trends in London are mixed. Support is at 1515, 1490, and 1480 July, with resistance at 1560, 1580, and 1590 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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