Cocoa falls as African rains improve crop condition


General Comments: Futures closed lower as traders debate the effectiveness of rains in West Africa. Ideas are that crop conditions there are generally improving. West Africa is expected to get scattered showers, and most of these seem to be in central and northern areas. No general rains are in the forecast, but conditions have improved in most areas over the last couple of weeks, and traders are starting to take note. Ghana and Ivory Coast are still too dry, but precipitation is improving and conditions are expected to improve further. 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 4.649 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2450, 2420, and 2390 December, with resistance at 2505, 2525, and 2545 December. Trends in London are mixed. Support is at 1615, 1600, and 1580 December, with resistance at 1660, 1670, and 1705 December.


General Comments: Futures closed a little lower and short term trends started to turn down again. Futures traded both sides of the market as traders weighed slow crop development against improving conditions. Buyers have pulled away from the market and will wait for a bottom to form before buying in a big way. Very hot weather conditions in China continue, and the weather in Cotton areas is not really improving right now in that country. However, some showers are in the forecast to provide some help. Weather is turning hot in the US again, too. 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 and warm. Weather for Cotton still appears good in India. Trends are down.

Overnight News: The Delta will be dry and Southeast will see a few showers. Temperatures will average above normal in the Delta and mostly above normal in the Southeast. Texas will see dry weather. Temperatures will average above normal. The USDA spot price is now 80.33 ct/lb. ICE said that certified Cotton stocks are now 0.021 million bales, from 0.023 million yesterday.

Chart Trends: Trends in Cotton are down with objectives of 83.00, 82.70, and 81.20 October. Support is at 83.55, 82.90, and 81.80 October, with resistance of 85.05, 85.30, and 86.00 October.

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