Cotton searching for base after drop on production estimates

COFFEE (NYBOT:KCZ13)

General Comments: Futures were lower again in quiet trading. Ideas of increased offers from Brazil were helped by the Real weakness, although there were no real reports of big selling. Most Coffee producers apparently plan to move Coffee into the support programs and hope for higher prices. Brazil producers are selling in other markets and should be selling a lot of Coffee, too, if not for the government programs. 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.

Overnight News: Certified stocks are higher today and are about 2.799 million bags. The ICO composite price is now 112.85 ct/lb. Brazil should get dry conditions except for a few showers on Wednesday. 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 down with objectives of 116.50 and 111.00 December. Support is at 114.00, 111.00, and 108.00 December, and resistance is at 118.00, 120.00, and 122.00 December. Trends in London are down with objectives of 1750 November. Support is at 1760, 1735, and 1730 November, and resistance is at 1800, 1825, and 1840 November. Trends in Sao Paulo are mixed to down with objectives of 134.50 and 123.50 December. Support is at 140.00, 137.00, and 134.00 December, and resistance is at 145.50, 148.50, and 150.50 December.

SUGAR (NYBOT:SBV13)

General Comments: Futures closed higher after holding a support area on the charts. There did not seem to be any news to support Sugar. The Real keeps sinking and made new lows for the move against the US Dollar last week, but Sugar held. Brazil production could improve as the weather gets better. 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. 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 to down with objectives of 1630, 1590, and 1580 October. Support is at 1625, 1610, and 1595 October, and resistance is at 1650, 1685, and 1700 October. Trends in London are down with objectives of 478.00 and 469.00 October. Support is at 478.00, 474.00, and 470.00 October, and resistance is at 488.00, 492.00, and 495.00 October.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed higher. The market broke down on Thursday and made a potential top on the charts. Further down side Price pressure is possible this week. Talk of improved rains in West Africa caused the increased selling interest. 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. The harvest will be getting underway soon, and has already begun in Nigeria, with mixed results so far there. 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 4.663 million bags. ICE said that 13 delivery notices were posted today and that total deliveries for the month are 330 contracts.

Chart Trends: Trends in New York are mixed to down with objectives of 2395 and 2285 December. Support is at 2405, 2390, and 2360 December, with resistance at 2455, 2475, and 2505 December. Trends in London are mixed to down with objectives of 1525 and 1470 December. Support is at 1615, 1600, and 1580 December, with resistance at 1650, 1670, and 1705 December.

<< 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
Check out Futures Magazine - Polls on LockerDome on LockerDome