China economy key to cotton prices

Greening disease confounding orange juice forecasting

COTTON

General Comments:  Futures were lower again on demand concerns and ideas of good weather for US crops.  Traders are worried about Chinese demand as the economy there shows signs of slowing down.  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 áreas 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 problema 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, with  best rain chances over the weekend.  Temperatures will average near to above normal.  Texas will get showers through the weekend, mostly in eastern areas.  Temperatures will average mostly above normal.  The USDA spot price is now 76.32 ct/lb.  ICE said that certified Cotton stocks are now 0.512 million bales, from 0.509 million yesterday. 

Chart Trends:  Trends in Cotton are down with no objectives.  Support is at 80.10, 79.00, and 78.10 July, with resistance of 81.35, 82.90, and 83.60 July.

 

DJ China Zhengzhou Cotton Futures Closing Prices, Volume

Thursday, May 30 2013  

Product  Settle  PrevSettle  Change    Open    High     Low  Volume  Open Int

CF307    19,800      19,855     -55  19,790  19,815  19,785      72     2,818

CF309    20,090      20,165     -75  20,115  20,130  20,045  14,238    65,294

CF311    20,200      20,260     -60  20,175  20,255  20,165     502     3,438

CF401    19,890      19,910     -20  19,860  19,960  19,840   7,716    45,874

CF403    19,830      19,860     -30       0       0       0       0       790

CF405    19,710      19,745     -35  19,665  19,760  19,665     158       678  

Notes:

1) Unit is Chinese yuan a metric ton;

2) Change is the day's settlement minus previous settlement;

3) Volume and open interest are in lots;

4) One lot is equivalent to 5 metric tons.

 

FCOJ

General Comments:  Futures closed higher on follow through buying.  Trends turned back up with the moves yesterday and it looks like a new leg up has begun on the charts.  Traders are wrestling with more reports of losses from greening disease on the one side and beneficial rains that have hit the state on the other.  Greening disease and what it might mean to production prospects continues to be a primary support ítem and will be for several years.  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, but some showrs are posible late this week. 

Overnight News:  Florida weather forecasts call for scattered afternoon showers through the weekend.  Temperatures will average near to above norml this week and near normal this weekend.    

Chart Trends:  Trends in FCOJ are up with objectives of 160.00 and 177.00 July.  Support is at 150.00, 145.00, and 144.00 July, with resistance at 156.00, 159.00, and 162.00 July.

 COFFEE 

General Comments: Futures were higher in New York as some speculative short covering was seen, but much lower on speculative selling in London.  There is talk of increasing offers of Robusta frpom producers as they apparently did not sell when prices were much higher.  Most sellers, including Brazil, are quiet and waiting for differentials or futures to get stronger.  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 anticípate 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. 

Comments
comments powered by Disqus