Coffee prices fall as farmers clear inventory before harvest

COFFEE (NYBOT:KCU13)

General Comments: Futures were lower on what appeared to be speculative selling that developed once futures were unable to make new highs for the move. Some talk of good harvest weather in Brazil, but cold and wet weather is in the forecast for later this week. London was once again the leader, this time to the downside. Differentials held firm on a lack of offer from producers. Coffee appears to be available in Central America as farmers and mills clear inventories before the next harvest. Little new crop offers are seen. Current crop development is still good this year in most production areas of Latin America and also appears to be mostly good in Asia. Central America crop areas remain too dry, but conditions are said to be good overall. Colombia is still reported to have good conditions. Harvest conditions are good in Brazil, but cold and wet weather is possible in the next couple of days. Lows could be in the mid 30 degree area. Prices for Arabica are in a range.

Overnight News: Certified stocks are higher today and are about 2.771 million bags. The ICO composite price is now 118.71 ct/lb. Brazil should get dry conditions. Temperatures will average below normal this week, then will moderate this weekend. Colombia should get scattered showers, and Central America and Mexico should get showers, and rains. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed. Support is at 120.00, 117.00, and 115.00 September, and resistance is at 125.00, 126.00, and 130.00 September. Trends in London are mixed to up with objectives of 1980 September. Support is at 1900, 1885, and 1860 September, and resistance is at 1950, 1980, and 2000 September. Trends in Sao Paulo are mixed. Support is at 143.00, 141.00, and 138.00 September, and resistance is at 150.00, 151.00, and 155.00 September.

COTTON (NYBOT:CTV13)

General Comments: Futures closed higher on follow through after USDA showed less tan expected production estimates in its reports yesterday. More talk of production problems in the Southeast, and especially Georgia, as well as in Texas aided in the buying. Cotton production was estimated at 13.052 million bales, well below trade estimates. Ending stocks estimates were cut slightly for the US and more significantly for the world. Some buying was tied to reports of very hot weather conditions in China and the weather in Corron areas is not really improving right now in that country. US crops remain behind the normal pace. The poor planting conditions early in the year have made the crop progress behind normal. Texas is dry, but will turn cooler later in the week. Export sales have been on the weak side lately as the buy side of the market waits for prices to work lower. Weather for Cotton still appears good in India.

Overnight News: The Delta and Southeast will see showers and storms through this weekend in eastern areas. Temperatures will average near to below normal. Texas will see dry weather this week and maybe a shower in the north. Temperatures will average below normal this week and near to above normal this weekend. The USDA spot price is now 87.49 ct/lb. ICE said that certified Cotton stocks are now 0.049 million bales, from 0.051 million yesterday.

Chart Trends: Trends in Cotton are up with objectives of 92.80 October. Support is at 90.70, 90.10, and 89.10 October, with resistance of 92.40, 93.00, and 93.60 October.

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