Cotton consolidates ahead of monthly update

COTTON

General Comments:  Futures were slightly lower in consolidation trading.  Trends are mixed as traders look ahead to the USDA monthly updates that will be released Wednesday afternoon.  Ideas of good weather for US crops are still around.  Traders are worried about Chinese demand, but there is talk that overall demand increased on the moves lower early last week.  Demand was less late in the week after prices recovered.  US economic data has been improving, but mixed.  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.  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.  Weather for Cotton appears good in India, Pakistan, and China.

Overnight News:  The Delta and Southeast will see dry conditions or afternoon showers through the weekend.  Temperatures will average near to above normal.  Texas will get dry weather.  Temperatures will average near to below normal.  The USDA spot price is now 80.86 ct/lb.  ICE said that certified Cotton stocks are now 0.530 million bales, from 0.527 million yesterday.

Chart Trends:  Trends in Cotton are mixed.  Support is at 84.75, 83.60, and 83.25 July, with resistance of 86.00, 86.40, and 86.90 July.

FCOJ

General Comments:  Futures closed higher.  Futures were still not able to take out recent highs as traders prepare for the reports on Wednesday.  USDA could show another drop in production by 1.0 million boxes.  Trends are mixed.  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 item and will be for several years.  Temperatures are warm in the state.  The Valencia harvest is continuing.  Brazil is seeing near to above normal temperatures and dry weather.

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

Chart Trends:  Trends in FCOJ are mixed to up with objectives of 160.00 and 177.00 July.  Support is at 148.00, 145.00, and 144.00 July, with resistance at 154.00, 156.00, and 159.00 July.

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