Coffee falls on Brazilian real weakness, big supplies


General Comments: Futures were lower in New York on speculative selling tied to weakness in the Brazilian real, and weakness continued in London due to ideas of big supplies from producers, mostly from Vietnam. Arabica cash markets remain quiet right now and roasters in the US are showing little interest in buying. However, there is very little on offer and that fact has helped hold prices at current levels. There is talk of increasing offers of Robusta from producers as they apparently did not sell when prices were much higher. However, the Arabica market does not show any real changes. Most sellers, including Brazil, are quiet and waiting for differentials or futures to get stronger, and mostly are waiting for futures to move higher. Buyers are interested on cheap differentials. Brazil weather is forecast to show dry conditions, but no cold weather. Current crop development is still good this year in Brazil. Central America crops are seeing good rains now. Colombia is reported to have good conditions.

Overnight News: Certified stocks are near unchanged today and are about 2.746 million bags. The ICO composite price is now 120.48 ct/lb. Brazil should get dry weather. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get showers. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed. Support is at 125.00, 122.00, and 119.00 July, and resistance is at 130.00, 133.00, and 135.00 July. Trends in London are down with objectives of 1800 and 1765 July. Support is at 1800, 1770, and 1740 July, and resistance is at 1830, 1845, and 1865 July. Trends in Sao Paulo are mixed. Support is at 155.00, 153.00, and 150.00 September, and resistance is at 161.50, 166.00, and 170.00 September.


General Comments: Futures were higher in nearby months on ideas that short term supplies available to the market here are very hard to find. Traders are talking about a squeeze right now. The crop progress and condition report was disappointing for the bears as progress remains behind and conditions were lower than expected. Even so, new crop months had trouble rallying as traders waited for a new round of supply and demand estimates from USDA that will be released later today. Trends are up. Ideas of good weather for US crops are still around. Traders are worried about Chinese demand, but there is talk that overall demand increased in the last week. The weather has improved, but it is still too dry in Texas and drier weather is needed for the Delta and Southeast. Dry conditions are forecast for the Delta and Southeast, and dry and warm weather is expected in Texas. Weather for Cotton appears good in India, Pakistan, and China.

Overnight News: The Delta and Southeast will see dry conditions. Temperatures will average above normal. Texas will get dry weather. Temperatures will average above to much above normal. The USDA spot price is now 84.08 ct/lb. ICE said that certified Cotton stocks are now 0.533 million bales, from 0.528 million yesterday.

Chart Trends: Trends in Cotton are up with objectives of 9140 and 9550 July. Support is at 86.50, 85.00, and 84.75 July, with resistance of 91.15, 91.60, and 92.15 July.

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