Coffee sellers pulling bids as prices fall

COFFEE

General Comments: Futures were lower on speculative selling tied to ideas of big production coming from Brazil. Traders note that there are showers in the forecast but doubt there will be any big delay to the harvest or any loss of quality. Most sellers, including Brazil, withdrew offers after futures broke down on Wednesday and remain hard to get offers from so far this week. Or, they offer at higher differentials. Buyers are waiting for prices to drop even more, but need coffee and will buy if the differentials offered are good. Brazil weather is forecast to show some showers for this week, but no cold weather. Trends are down due to the expected large production in Brazil. It is speculators who keep pushing the futures lower as they anticipate ever increasing supplies. Current crop development is still good this year in Brazil, but it has been dry. 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 near unchanged today and are about 2.755 million bags. The ICO composite price is now 120.37 ct/lb. Brazil should get showers. 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.

Chart Trends: Trends in New York are down with objectives of 126.00 and 116.00 July. Support is at 125.00, 122.00, and 119.00 July, and resistance is at 133.00, 135.00, and 138.00 July. Trends in London are down with no objectives. Support is at 1910, 1890, and 1880 July, and resistance is at 1950, 1970, and 1980 July. Trends in Sao Paulo are down with no objectives. Support is at 156.00, 153.00, and 150.00 September, and resistance is at 161.50, 166.00, and 170.00 September.

COTTON

General Comments: Futures were lower again in July, but a little higher in the other months. The market has been trying to turn trends down, but bulls have been fighting to hold the market and send it higher again. US economic data has been improving, implying that demand might be so bad this year after all, especially with Cotton prices relatively low right now. The weather has improved in all areas with some precipitation in Texas areas and drier weather in the forecast for the next few days for the Delta and Southeast. Big rains are expected in the Delta and Southeast over the weekend, and some areas of the Delta got big rains last weekend to slow down the planting pace. Traders also were looking for new signs of demand, but are not finding much new. Ideas are that the demand can continue for now as China moves to increase its stocks. Planting conditions for the next crop remain a problem in the US. Dry weather is forecast for the Delta and Southeast, and warm weather is expected in Texas this week. Ideas are that farmers can get a lot of planting done with dry and warm conditions.

Overnight News: The Delta and Southeast will see dry conditions or afternoon showers. Temperatures will average near to above normal. Texas will get mostly dry weather, but showers are possible on Saturday. Temperatures will average mostly above normal. The USDA spot price is now 76.98 ct/lb. ICE said that certified Cotton stocks are now 0.509 million bales, from 0.509 million yesterday.

Chart Trends: Trends in Cotton are down with objectives of 80.90 July. Support is at 81.00, 80.10, and 79.00 July, with resistance of 82.90, 83.60, and 85.00 July.

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