Coffee mixed as bulls lose control in New York

COFFEE (NYBOT:KCU13)

General Comments: Futures were lower on some long liquidation after bulls could not take out resistance at 125.00 NY September. London moved much higher on some industry buying tied to less offers from Vietnam on ideas that producers there are about sold out and some reports of insect infestations that could hurt production down the road. Offers from origin are still hard to find, especially with Brazil closed for a holiday. Demand was not much stronger than the offer and the cash market remains very quiet. Sellers, including Brazil, are quiet and are waiting for better prices of the next crop. Buyers are interested on cheap differentials, and cheap futures. Brazil weather is forecast to show dry conditions, but no cold weather. Current crop development is still good this year. Central America crops are seeing good rains now. Colombia is reported to have good conditions. Robusta prices are holding stronger as the Vietnamese export pace has really dropped.

Overnight News: Certified stocks are higher today and are about 2.745 million bags. The ICO composite price is now 118.15 ct/lb. Brazil should get dry weather except for some showers in the northeast. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get showers, and rains. Temperatures should average near to above normal. ICE said that 0 delivery notices were posted against July today and that total deliveries for the month are now 810 contracts.

Chart Trends: Trends in New York are mixed. Support is at 120.00, 117.00, and 116.00 September, and resistance is at 125.00, 126.00, and 127.00 September. Trends in London are up with objectives of 1900 September. Support is at 1820, 1790, and 1755 September, and resistance is at 1905, 1940, and 1950 September. Trends in Sao Paulo are mixed to down with no objectives. Support is at 140.00, 137.00, and 134.00 September, and resistance is at 150.00, 151.00, and 155.00 September.

COTTON (NYBOT:CTV13)

General Comments: Futures were mixed to higher on follow through buying from last week and also on ideas that crop conditions are getting worse in Texas. Traders were also getting prepared for the next round of USDA supply and demand estimates on Thursday that could show decreased stocks for this year and next year. However, USDA is unlikely to make any significant changes at this time. Parts of the Southeast are getting too much rain and Texas growing areas remain mostly hot and dry. Conditions in Alabama, Mississippi, and Missouri are below average now. Futures held the short term range. It is possible that futures can work lower again as demand has turned soft, but production and weather might be more important in the short term. Weather for Cotton appears good in India, Pakistan, and China.

Overnight News: The Delta should be dry and Southeast will see showers and rains Thursday through the weekend. Temperatures will average near normal. Texas will be mostly dry. Temperatures will average above normal. The USDA spot price is now 82.23 ct/lb. ICE said that certified Cotton stocks are now 0.612 million bales, from 0.610 million yesterday. ICE said that 281 notices were posted today and that total deliveries are now 2,873 contracts.

Chart Trends: Trends in Cotton are mixed . Support is at 86.00, 85.20, and 84.00 October, with resistance of 87.00, 87.45, and 88.00 October.

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About the Author

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.

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