Cocoa falls as African rains improve crop condition

FCOJ (NYBOT:OJX13)

General Comments: Futures closed higher again and the market remains in a short term trading range. It is the high point of the hurricane season and all remains mostly quiet. There are still no real threats showing in the tropical Atlantic for Florida or Oranges production, although the atmosphere for Hurricanes has started to improve. The weather in the tropics has started to show a little more life as some of the wind shear and dry pools in the atmosphere in the Atlantic have abated. 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 below normal temperatures and mostly dry weather, but production areas will turn warmer again this weekend.

Overnight News: Florida weather forecasts call for some showers. Temperatures will average near normal.

Chart Trends: Trends in FCOJ are mixed. Support is at 135.00, 133.00, and 129.00 November, with resistance at 139.00, 140.00, and 142.00 November.

COFFEE (NYBOT:KCZ13)

General Comments: Futures were a little lower in all three markets as the US Dollar turned stronger and as traders once again talked of big supplies everywhere. The demand side of the market seems quiet at this time. The cash market seemed relatively quiet. Most Brazil Coffee producers apparently plan to move Coffee into the support programs and hope for higher prices, and that has cut offers to the market. Differentials held firm on a lack of offer from producers for both the old crop and the new crop, although some old crop Coffee remains available. 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. Colombia is offering Coffee into the cash market at weaker differentials. Markets for new crop in most areas are very quiet. Current crop development is still good this year in most production áreas of Latin America. 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 2.803 million bags. The ICO composite price is now 112.51 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 116.00, 114.00, and 111.00 December, and resistance is at 120.00, 122.00, and 125.00 December. Trends in London are down with objectives of 1750 November. Support is at 1735, 1730, and 1720 November, and resistance is at 1800, 1825, and 1840 November. Trends in Sao Paulo are down with objectives of 134.50 and 123.50 December. Support is at 137.00, 134.00, and 131.00 December, and resistance is at 145.50, 148.50, and 150.50 December.

SUGAR (NYBOT:SBV13)

General Comments: Futures closed slightly lower again as the US Dollar held strong against many currencies. The Brazilian Real remains relatively weak and traders think Brazil will offer more for export. Traders are also noting the weakness in the Indian Rupee and decided that was a reason to sell as India will get more Rupees for Sugar sold. However, the government is also launching a massive new program to provide subsidized food for the poor and might not sell as much as speculators expect. Countries like Thailand and India also expect more production this year. However, there have been concerns raised about Indian production in the last week due to heavier monsoon rains. 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 Short term trends are now sideways.

Chart Trends: Trends in New York are mixed. Support is at 1625, 1610, and 1595 October, and resistance is at 1650, 1665, and 1685 October. Trends in London are down with objectives of 478.00 and 469.00 October. Support is at 473.00, 470.00, and 465.00 October, and resistance is at 481.00, 486.00, and 488.00 October.

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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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