Orange juice rallies on forecasts of smaller crop

COFFEE (NYBOT:KCU13)

General Comments: Futures were lower as the Real moved lower against the US Dollar. The Real is moving to new lows and this has decreased the effectiveness of the Brazil government program for world markets as the support is made in Rais. Differentials held firm on a lack of offer from producers for both the old crop and the new crop. Coffee appears to be available in Central America as farmers and mills clear inventories before the next harvest, but none 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 there was some rain to slow things down last week. Prices for Arabica are in a range.

Overnight News: Certified stocks are higher today and are about 2.786 million bags. The ICO composite price is now 117.82 ct/lb. Brazil should get dry conditions. 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.

Chart Trends: Trends in New York are mixed. Support is at 117.00, 115.00, and 112.00 September, and resistance is at 123.00, 125.00, and 126.00 September. Trends in London are mixed to down with objectives of 1820 September. Support is at 1860, 1850, and 1820 September, and resistance is at 1900, 1910, and 1940 September. Trends in Sao Paulo are mixed. Support is at 141.00, 139.00, and 138.00 September, and resistance is at 147.00, 150.00, and 151.00 September.

SUGAR (NYBOT:SBV13)

General Comments: Futures closed lower on weakness in the Real against the US Dollar and on forecasts for better weather this week for harvest in Brazil. The Real keeps sinking and made new lows for the move against the US Dollar yesterday. Brazil production has been down a bit lately due to bad harvest weather, but could still improve if the weather gets better soon. Forecasts call for warm and dry conditions into the weekend. Mills remain more interested in producing ethanol rather than Sugar due to price. Countries like Thailand and India also expect more production this year. Some Sugarcane was damaged in the freezes of a couple of weeks ago in Brazil, but the country still should have a lot to sell. Demand for ethanol has been good, but there is still a lot of Sugar and the supply side fundamentals seem to overwhelm any demand side strength over time.

Overnight News: Brazil could see dry weather and moderate temperatures

Chart Trends: Trends in New York are mixed. Support is at 1650, 1635, and 1595 October, and resistance is at 1700, 1735, and 1750 October. Trends in London are mixed. Support is at 484.00, 478.00, and 474.00 October, and resistance is at 495.00, 500.00, and 503.00 October.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed higher and made new highs for the move. Prices closed at the highest level for this year on West Africa worries. Dry weather in West Africa could have hurt production and remains the primary fundamental support. There is talk that demand might improve after economic data in Europe and the US proved better than expectations. Ghana and Ivory Coast are still too dry, but precipitation is improving. Temperatures are moderate. 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 calendar 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 4.751 million bags. Ivory Coast arrivals are now 1.28 million tons, from 1.26 million last year. ICE said that 12 delivery notices were posted today and that total deliveries for the month are 317 contracts.

Chart Trends: Trends in New York are mixed. Support is at 2450, 2435, and 2390 December, with resistance at 2520, 2555, and 2585 December. Trends in London are mixed. Support is at 1630, 1625, and 1615 December, with resistance at 1670, 1685, and 1720 December.

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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