Cotton moves higher in reaction to USDA estimates

COFFEE

General Comments: Futures were lower in New York on speculative selling tied to reports of bigger production in Colombia and Brazil, 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. There is talk of increasing offers of Robusta from producers as they apparently did not sell when prices were much higher. Most sellers, including Brazil, are quiet and 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 unchanged today and are about 2.746 million bags. The ICO composite price is now 117.17 ct/lb. Brazil should get dry weather except for some showers in the southwest on Sunday. 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 down with objectives of 116.00 July. Support is at 119.00, 116.00, and 113.00 July, and resistance is at 125.00, 127.00, and 130.00 July. Trends in London are down with objectives of 1765 July. Support is at 1770, 1740, and 1710 July, and resistance is at 1810, 1845, and 1865 July. Trends in Sao Paulo are down with no objectives. Support is at 147.00, 144.00, and 140.00 September, and resistance is at 155.00, 159.00, and 161.50 September.

SUGAR  

General Comments: Futures closed lower due to ideas of big world supplies. There was no other real news for the market besides the USDA data. The price action overall remains weak and implies that further losses are coming down the road due to coming Brazil supplies. Traders remain bearish on ideas of big supplies, especially from Brazil. Traders in Brazil expect big production as the weather is good. Demand is said to be strong from North Africa and the Middle East, but starting to fade now as needs are getting covered.

Overnight News: Showers are expected in Brazil. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed to down with objectives of 1620, 1610, and 1570 July. Support is at 1620, 1600, and 1570 July, and resistance is at 1660, 1675, and 1700 July. Trends in London are mixed. Support is at 474.00, 470.00, and 467.00 August, and resistance is at 481.00, 486.00, and 487.00 August.

COCOA  

General Comments: Futures closed higher and showed potential to make a new leg up. There was not a lot of news for the market, and price action reflected this. It looks like the buying was based on the charts as New York futures could not move to new lows and in fact have held at an important área on the charts. But, ideas of weak demand after the recent big rally kept some selling interest around. The weather is good in West Africa, with more moderate temperatures and some rains. The mid crop harvest is moving to completion, 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.

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 5.113 million bags.

Chart Trends: Trends in New York are mixed to up with objectives of 2480 and 2520 July. Support is at 2340, 2325, and 2280 July, with resistance at 2400, 2420, and 2425 July. Trends in London are mixed. Support is at 1540, 1520, and 1505 July, with resistance at 1575, 1580, and 1600 July.

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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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