Sugar struggles as Brazilian currency shows weakness

FCOJ

General Comments: Futures closed lower again as tropical system Chantal began to fade and became less a threat to groves. Some speculative profit taking was noted by traders as many look forward to new production data from USDA today. Ideas are that production will be unchanged. The tropical system 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. 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 mixed to up with objectives of 145.00 and 155.00 September. Support is at 132.00, 130.00, and 127.00 September, with resistance at 138.00, 139.00, and 140.00 September.

COFFEE

General Comments: Futures were lower in New York and Sao Paulo on some long liquidation and new selling tied to a weaker Brazilian Real against the US Dollar. London moved higher on some speculative buying tied to less offer from Vietnam on ideas that producers there are about sold out. Offers from origin are still hard to find. 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.

Overnight News: Certified stocks are higher today and are about 2.745 million bags. The ICO composite price is now 117.86 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 1880, 1905, and 1940 September. Trends in Sao Paulo are mixed. Support is at 143.50, 140.00, and 137.00 September, and resistance is at 148.00, 150.00, and 151.00 September.

COCOA

General Comments: Futures closed lower in range trading. Many are waiting for the US and European grind data to be released next week to see how strong the demand is right now. Ideas of good harvest weather and active movement of beans to ports in western Africa remain. 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 region 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 higher today at 4.886 million bags. ICE said that 1 delivery notice were posted today and that total deliveries for the month are 376 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.

<< Page 2 of 2
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.

Comments
comments powered by Disqus