Sugar rises as weather turns wet and cold for harvest

FCOJ (NYBOT:OJU13)

General Comments: Futures closed mostly a little higher as the weather in the tropics starts to show a little more life. There is a system in the western Atlantic that does not show much damage potential and some are starting to form in the Eastern Atlantic as well. It has been hot, but trees are reported in mostly good condition. The most active part of the hurricane season is here. The bulk of the tropical Atlantic is still seeing some very dry conditions and wind shear to prevent tropical storm development, but at least some systems that could become tropical are starting to appear. Growing conditions in the state of Florida remain mostly good. Showers are reported and conditions are said to be very good in almost the entire state. Temperatures are warm. Brazil is seeing near to above normal temperatures and mostly dry weather, and there are reports of stress to trees and the potential for lower production.

Overnight News: Florida weather forecasts call for some showers, but mostly dry conditions. Temperatures will average above normal this week and near normal this weekend.

Chart Trends: Trends in FCOJ are down with no objectives. Support is at 130.00, 125.00, and 124.00 September, with resistance at 135.00, 137.00, and 140.00 September.

COFFEE (NYBOT:KCU13)

General Comments: Futures were higher on Brazil weather forecasts. Cold and wet weather is in the forecast for the next couple of days. 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, but not much of the new crop is being offered yet. 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 lower today and are about 2.770 million bags. The ICO composite price is now 118.71 ct/lb. Brazil should get dry conditions. Temperatures will average below to much 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 1980, 2000, and 2030 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.

COCOA  (NYBOT:CCU13)

General Comments: Futures closed higher in consolidation trading. Futures had been rallying on dry weather in West Africa that could have hurt production remains the primary fundamental support. Ghana and Ivory Coast are still too dry, but showers are starting to pick up again. Temperatures are moderate. Production ideas are stable, although some ideas are starting to drop again. There is talk the drier weather could delay the harvest and the arrival of beans to ports. Ivory Coast has sold a lot of its new crop Cocoa already so any reduced production would mean fewer offers at the end of the year when the harvest is most active. 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 normal. Malaysia and Indonesia should see scattered showers, but southern areas could be dry. Temperatures should average above normal. Brazil will get mostly dry conditions and warm temperatures. ICE certified stocks are lower today at 4.776 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2390, 2370, and 2350 September, with resistance at 2500, 2515, and 2525 September. Trends in London are mixed. Support is at 1610, 1600, and 1580 September, with resistance at 1670, 1685, and 1705 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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