Cocoa falls on long liquidations

COCOA        

General Comments:  Futures closed lower on what appeared to be a lot of speculative long liquidation.  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 area 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 5.095 million bags.  LIFFE stocks are now 7,064 standard lots, 140 large lots, and 4 bulk lots.

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.

COTTON

General Comments:  Futures were higher again in follow through buying tied to the USDA supply and demand estimates that showed more demand and less ending stocks.  Export sales were positive for futures as well.  Traders also talk of reduced production potential due to the poor weather seen until recently in the Delta and Southeast and still reported in parts of Texas.  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 this weekend and some showers early next week.  Temperatures will average above normal.  Texas will get dry weather a few showers tomorrow, otherwise dry weather.  Temperatures will average above normal.  The USDA spot price is now 87.55 ct/lb.  ICE said that certified Cotton stocks are now 0.539 million bales, from 0.536 million yesterday.

Chart Trends:  Trends in Cotton are up with objectives of 9140 and 9550 July.  Support is at 88.40, 87.60, and 81.70 July, with resistance of 90.50, 91.15, and 91.60 July.

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