Coffee climbs as supplies start to dry up

COFFEE (NYBOT:KCZ13)

General Comments: Futures were a little higher in all markets as traders noted little on offer. London was higher as deliverable supplies are falling. The cash market seemed relatively quiet, although Robusta differentials are said to be firming again as supplies start to dry up. However, wire reports indicate that Vietnam producers have started to harvest, and there is some talk that the crop could be as much as 27 million bags. Differentials are expected to start lower next month when export offers are expected. 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 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 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 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 2.791 million bags. The ICO composite price is now 112.71 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.

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 mixed. Support is at 1750, 1735, and 1730 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.

COTTON (NYBOT:CTV13)

General Comments: Futures closed a little lower and short term trends are down. Futures traded lower as traders weighed slow crop development against improving conditions and improved weather. 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 moderate in the US. US crops remain behind the normal pace, but overall crop ratings are high and current conditions are called good. Texas is dry and warm. Weather for Cotton still appears good in India. The USDA crop progress and conditions report did not show improved crop conditions, and some new buying could surface today.

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 79.37 ct/lb. ICE said that certified Cotton stocks are now 0.018 million bales, from 0.021 million yesterday.

Chart Trends: Trends in Cotton are down with objectives of 82.70 and 81.20 October. Support is at 81.80, 81.20, and 80.00 October, with resistance of 84.00, 85.05, and 85.30 October.

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