Coffee mixed as bulls lose control in New York

FCOJ (NYBOT:OJU13)

General Comments: Futures closed higher again as tropical system Chantell wa moving towards the east coast of Florida. The system is expected to stay mostly to the east of the state, but it gave traders a reason to buy, anyway. It is too late to hurt the current production as the harvest is mostly over, but a big storm now could severely impact the coming production. Chantell is not forecast to have the damaging winds and rains that would damage trees and the new production. Some also expect USDA to lower production in Florida in its next production reports on Thursday morning. Showers are reported and conditions are said to have improved in almost the entire state. Ideas are that the better precipitation will help trees fight the greening disease. Temperatures are warm in the state, but there are showers reported. Brazil is seeing near to above normal temperatures and mostly dry weather.

Overnight News: Florida weather forecasts call for showers. Temperatures will average near to above normal. ICE said that 0 delivery notices were posted today and that total deliveries for the month are now 0 contracts.

Chart Trends: Trends in FCOJ are up with objectives of 145.00 and 155.00 September. Support is at 135.00, 132.00, and 130.00 September, with resistance at 138.00, 139.00, and 150.00 September.

SUGAR (NYBOT:SBV13)

General Comments: Futures closed mixed as traders prepared for the UNICA reports that could show reduced Sugar production later today. Sao Paulo was on holiday yesterday to keep action from there on the quiet side. Ideas are that mills had not had time to produce more Sugar due to a delayed harvest in Brazil because of rains and also because they are concentrating on producing ethanol. Futures trends remain down overall, but prices could rally a bit first if UNICA confirms less production. There is still a lot of Sugar around, and not only from Brazil. The Indian monsoon is off to a good start and this should help with Sugarcane production in the country. Northern areas are in good shape, but southern areas might be too hot and dry and some stress to the Sugarcane is possible in the short term. In addition, industry sources there told wire services that planted area is down by about 5% and that overall production would be lower even with very good weather.

Overnight News: Showers are expected in Brazil, mostly in the south and southwest. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed to down with objectives of 1580 October. Support is at 1620, 1600, and 1570 October, and resistance is at 1650, 1665, and 1690 October. Trends in London are mixed to down with objectives of 465.00 and 448.00 October. Support is at 470.00, 466.00, and 463.00 October, and resistance is at 480.00, 485.00, and 490.00 October.

COCOA (NYBOT:CCU13)

General Comments: Futures closed higher in consolidation trading. Ideas of good harvest weather and active movement of beans to ports in western Africa remain, and some selling was seen in New York on US Dollar strength. Ideas that the grind data from the US and Europe next week could be disappointing provided some selling interest. The cash market in Africa is slow right now as buyers have already bought and are now waiting to see how the main crop turns out late this year. The weather is good in West Africa, with more moderate temperatures and some rains. Some showers are appearing again in Ivory Coast this week, and the rest of the región is in good condition. Ivory Coast will still need more rain. Malaysia and Indonesia crops appear to be in good condition and weather is called favorable. Chart trends are mixed, but price action is weak.

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 4.874 million bags. ICE said that 3 delivery notices were posted today and that total deliveries for the month are 375 contracts.

Chart Trends: Trends in New York are mixed. Support is at 2165, 2130, and 2100 September, with resistance at 2210, 2250, and 2280 September. Trends in London are mixed. Support is at 1500, 1460, and 1445 September, with resistance at 1550, 1560, and 1600 September.

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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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