Cocoa falls on long liquidations

FCOJ

General Comments:  Futures closed lower on follow through selling and chart based selling.  USDA lower production of Oranges in Florida, but it seemed to be a buy the rumor and sell the fact situation as decreased production had been expected.  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, but there are showers reported somewhere in the state every day now.  The Valencia harvest is continuing.  Brazil is seeing near to above normal temperatures and dry weather.

Overnight News:  Florida weather forecasts call for light showers.  Temperatures will average near to above normal.  

Chart Trends:  Trends in FCOJ are mixed.  Support is at 148.00, 145.00, and 144.00 July, with resistance at 154.00, 156.00, and 159.00 July.

COFFEE

General Comments: Futures were slightly higher in New York on speculative buying tied to ideas that the market was oversold, but did not rally much due to reports of bigger production in Colombia and Brazil.  Weakness continued in London due to ideas of big supplies from producers, mostly from Vietnam.  London futures appear oversold as well.  Arabica cash markets remain quiet right now and roasters in the US are showing little interest in buying.  Buying interest could appear with this latest move lower.  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.  There are some forecasts for cold weather to develop in Brazil at the end of next week.  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 little changed today and are about 2.746 million bags.  The ICO composite price is now 116.78 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.  LIFFE stocks are now 12,114 lots.

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 mostly lower due to ideas of big world supplies.  July managed to close with a small gain as short speculators start to pull out of positions before the contract stops trading at the end of the month.  There was no other real news for the market.  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.

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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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