Cotton lower as buyers wait for bottom to form

COFFEE (NYBOT:KCZ13)

General Comments: Futures were a little lower in Arabica markets as traders once again talked of big supplies everywhere. London closed higher. The cash market seemed relatively quiet, although Robusta differentials are said to be firming again as supplies start to dry up. 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. However, differentials overall appear weak for Arabica. Coffee appears to be available in Central America as farmers and mills clear inventories before the next harvest. Colombia is offering Coffee into the cash market at weaker differentials. Markets for new crop in most areas are very quiet, with little buyer interest seen and little selling interest reported. Buyers are said to be well covered. Current crop development is still good this year in most production areas 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 lower today and are about 2.790 million bags. The ICO composite price is now 111.65 ct/lb. Brazil should get dry conditions or light showers. Temperatures will average near to below normal. Colombia should get scattered showers, and Central America and Mexico should get showers and rains. Temperatures should average near to above normal. The ICO said that exports were 0.05 million bags in July, from 9.69 million in July, 2012. Year to date exports are now 94.48 million bags, from 91.20 million last year.

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 narrowly mixed before the long US weekend. The Brazilian Real remains relatively weak and traders think Brazil will offer more for export. However, processors there remain more interested in ethanol production as it pays better. 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, and Thailand is offering. 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. Chinese demand has been soft, but Middle East demand appears to be relatively good. Price appear to be in a trading range for now due to solid demand and big production.

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.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed lower as traders debate the effectiveness of rains in West Africa. Ideas are that crop conditions there are generally improving, and these ideas pushed many speculators to sell on Friday. Price trends turned down with the selling late last week. West Africa is expected to get scattered showers, and conditions there are said to be improving for almost all producers. Ghana has been getting rains, too. Temperatures are moderate. 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 4.632 million bags.

Chart Trends: Trends in New York are down with objectives of 2395 and 2285 December. Support is at 2420, 2405, and 2390 December, with resistance at 2455, 2505, and 2525 December. Trends in London are mixed. Support is at 1615, 1600, and 1580 December, with resistance at 1660, 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