Cocoa rises as certified stocks dwindle

COCOA (NYBOT:CCZ13)

General Comments: Futures closed higher on ideas of little offer in the cash market and dropping certified stocks in New York at the exchange. Cocoa is between crops, and producers have already priced a comfortable amount of the coming crop and feel no need to sell more now. The lack of offer comes at a time when rains have returned to West Africa. 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 4.466 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 2605, 2620, and 2650 December. Trends in London are mixed. Support is at 1670, 1660, and 1650 December, with resistance at 1710, 1740, and 1770 December.

COTTON (NYBOT:CTV13)

General Comments: Futures closed higher as USDA reduced production potential for the US crop this year. The world data showed increased world supplies and was not considered bullish. Futures initially moved lower on the world data, but then rallied as traders took another look at the reduced production that offset an estimate for reduced demand for US Cotton. Futures could be starting a new leg higher. 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.

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 82.41 ct/lb. ICE said that certified Cotton stocks are now 0.017 million bales, from 0.018 million yesterday.

Chart Trends: Trends in Cotton are up with no objectives. Support is at 85.00, 83.90, and 82.80 October, with resistance of 86.00, 86.50, and 88.10 October.

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