Cocoa, cotton fall as U.S. dollar rally sends commodities scurrying

COCOA  

General Comments: Futures closed lower as the U.S. dollar rallied. Fears of an economic slowdown created by Fed tapering of the QE program created selling in all commodities yesterday. There was not a lot of news for the market, and price action reflected this. 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 about over, 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 5.033 million bags. ICE said that 0 delivery notices were posted today and that total deliveries for the month are 120 contracts.

Chart Trends: Trends in New York are down with no objectives. Support is at 2140, 2105, and 2080 September, with resistance at 2200, 2230, and 2250 September. Trends in London are down with objectives of 1380 and 1270 September. Support is at 1430, 1360, and 1320 September, with resistance at 1450, 1470, and 1490 September.

COTTON

General Comments: Futures were lower again on what appeared to be long liquidation from speculators and perhaps some farm selling. The Sharp rally in the US Dollar and disappointing economic news from China caused the selling interest to develop. Export sales were less, adding to selling interest. Ideas of better weather in US production areas were once again negative for prices. Some storms are moving through western Texas and conditions there are improving. Good weather is being reported in the Delta and Southeast as well. The weather has improved, and looks to improve conditions generally through the rest of the week. Scattered showers are forecast for the Delta and Southeast, and wetter and warm weather is expected in Texas. Weather for Cotton appears good in India, Pakistan, and China. It is possible that futures made at least a short term high on Friday.

Overnight News: The Delta and Southeast will see some showers this weekend. Temperatures will average above normal. Texas will get showers today, then dry weather. Temperatures will average above normal. The USDA spot price is now 81.34 ct/lb. ICE said that certified Cotton stocks are now 0.562 million bales, from 0.550 million yesterday.

Chart Trends: Trends in Cotton are down with no objectives. Support is at 85.15, 84.75, and 84.55 October, with resistance of 87.10, 88.20, and 89.60 October.

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