Coffee falls as Brazilian real shows signs of weakness

COFFEE (NYBOT:KCZ13)

General Comments: Futures were lower in all markets and the Brazilian real showed signs of moving lower again. The cash market seemed relatively quiet. Most Brazil coffee producers are not offering much right now, and few in Central America seem interested in selling. 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. 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 lower today and are about 2.782 million bags. The ICO composite price is now 112.21 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. Colombia produced 770,000 bags of Coffee in August. Production for the last 12 months now totals 9.6 million bags, up 26% from the previous 12 months. In Brazil, Conab expects production to be 47.5 million bags for this year, including 36.7 million bags of Arabica and 10.9 million bags of Robusta.

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 1740, 1730, and 1720 November, and resistance is at 1770, 1800, and 1825 November. Trends in Sao Paulo are down with objectives of 134.50 and 123.50 December. Support is at 139.00, 137.00, and 134.00 December, and resistance is at 145.50, 148.50, and 150.50 December.

COTTON (NYBOT:CTV13)

General Comments: Futures closed higher as traders started to get ready for the USDA reports on Thursday. The market had dropped a lot over the last couple of weeks and now the bears are buying out short positions to get even before the reports. Many areas are turning hot and dry again, and this created some buying interest as well. China issued some positive economic data over the weekend to help demand ideas stay afloat after the stronger than expected export sales report from last week. US crop development remains behind due to delayed planting this year, but crop conditions right now are generally good. Weather is warm in the US, with the Delta and the Southeast expecting above normal temperatures into the weekend. Texas is dry and warm. Weather for Cotton still appears good in India. The market is getting ready for the harvest, and any rallies now might be very limited in scope.

Overnight News: The Delta will be dry and Southeast will see a few showers late in the week. Temperatures will average above normal in the Delta and mostly above normal in the Southeast. Temperatures should start to turn cooler this weekend. Texas will see dry weather. Temperatures will average above normal. The USDA spot price is now 81.32 ct/lb. ICE said that certified Cotton stocks are now 0.018 million bales, from 0.018 million yesterday.

Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 83.90, 82.80, and 82.30 October, with resistance of 85.05, 85.30, and 86.00 October.

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