Sugar sees production fall in Brazil, but fails to rally

FCOJ (NYBOT:OJX13)

General Comments: Futures closed lower as a hurricane formed in the Eastern Atlantic. The report created some initial buying, but the support from the storm quickly faded. The storm is not going to come anywhere close to Florida, but it gave traders a reason to buy, anyway. The storm shows that the conditions in the Atlantic might be improving. The historical peak of the season has just passed. There are still no real threats showing in the tropical Atlantic for Florida. 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 near 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 134.00, 131.00, and 129.00 November, with resistance at 139.00, 140.00, and 142.00 November.

COFFEE (NYBOT:KCZ13)

General Comments: Futures were sharply higher in all markets as Brazil began to roll out details of its support program for producers. It will provide R$284 million for storage costs and about R$242.6 million for working capital for producers. There was also talk that current dry weather in Brazil could hurt the flowering for the next crop. The news cause a lot of short covering, but most traders are still bearish longer term on big world supplies. 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 higher today and are about 2.785 million bags. The ICO composite price is now 114.69 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 to up with objectives of 123.00 and 127.00 December. Support is at 119.00, 116.00, and 114.00 December, and resistance is at 122.00, 125.00, and 127.00 December. Trends in London are mixed. Support is at 1740, 1730, and 1720 November, and resistance is at 1800, 1825, and 1840 November. Trends in Sao Paulo are mixed. Support is at 139.00, 137.00, and 134.00 December, and resistance is at 145.50, 148.50, and 150.50 December.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed near unchanged after an early rally attempt failed. Cocoa is between crops, but has rallied a lot and might start to correct lower now. The move lower could last generally through the end of the year as the main crop harvest is not that far away. Ideas are that crop conditions there are generally improving. West Africa is expected to get scattered showers, and conditions there are said to be improving for almost all producers. Temperatures are moderate. The harvest will be getting underway soon. Malaysia and Indonesia crops appear to be in good condition and weather is called favorable. Nigerian farmers are drying Cocoa now that rains have passed and the weather has improved. Drying has been delayed over the last couple of weeks from too much rain.

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 4.491 million bags.

Chart Trends: Trends in New York are mixed to up with objectives of 2610 and 2720 December. Support is at 2540, 2525, and 2505 December, with resistance at 2590, 2605, and 2620 December. Trends in London are mixed. Support is at 1670, 1660, and 1650 December, with resistance at 1710, 1740, and 1770 December.

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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