Orange juice retreats as storm risk evaporates

COFFEE (NYBOT:KCZ13)

General Comments: Futures were a little lower in another session of consolidation trading. Some forecasts for rains to develop by the end of this week in growing areas of Brazil were negative because it will create good flowering for the next crop. The current crop harvest has proceeded well under mostly dry conditions. Most traders are still bearish longer term on big world supplies, but the market action still appears to be more like at least a short term bottom. Coffee appears to be available in Central America as farmers and mills clear inventories before the next harvest. Little, if any, new crop is being offered, although some price ideas are starting to surface for the next crop. Colombia is offering Coffee into the cash market at steady differentials after forcing them lower in the last few weeks. Buyers are said to be well covered and have been buying in Colombia and Peru as well as Asia. 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, but rust will cut production by around 15% in some countries. In addition, Hurricane Ingrid will bring some very bog rains to central Mexico this week and could damage crops. Colombia is still reported to have good conditions. Harvest conditions are good in Brazil.

Overnight News: Certified stocks are slightly higher today and are about 2.782 million bags. The ICO composite price is now 113.34 ct/lb. Brazil should get scattered showers this week. 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. GCA stocks were 5.561 million bags at the end of August, from 5.432 million at the end of July.

Chart Trends: Trends in New York are mixed to up with objectives of 123.00 and 127.00 December. Support is at 116.00, 114.00, and 111.00 December, and resistance is at 121.00, 122.00, and 125.00 December. Trends in London are mixed to up with no objectives. Support is at 1720, 1690, and 1670 November, and resistance is at 1750, 1775, and 1800 November. Trends in Sao Paulo are mixed. Support is at 142.50, 140.50, and 139.00 December, and resistance is at 145.50, 148.50, and 150.50 December.

SUGAR (NYBOT:SBV13)

General Comments: Futures were lower on the reports of strong production in India from trade groups. The crop there is expected to be large and some will be exported. Futures are now falling back from the upper end of the trading range. Demand has improved, but the Indian reports took care of any ideas of tighter supplies. Thailand expects more production this year, and is actively offering their supplies into the world market. Differentials there have been moving lower in the last few weeks. Brazil and India are selling as well. Prices 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.

Chart Trends: Trends in New York are mixed. Support is at 1740, 1710, and 1700 March, and resistance is at 1780, 1810, and 1820 March. Trends in London are mixed to down with objectives of 481.00 and 473.00 December. Support is at 479.00, 475.00, and 470.00 December, and resistance is at 490.00, 494.00, and 495.00 December.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed higher again on worries that there will not be enough Cocoa beans available for processing for end of the year holiday demand. Reports from Ivory Coast indicate that beans are hard to find and that some arrivals at ports are being rejected as either too small or moldy. Cocoa is between crops, and producers have already priced part 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, but that already harvested beans can get moldy due in part to producer holding patterns and poor storage facilities. 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 4.411 million bags.

Chart Trends: Trends in New York are up with objectives of 2720 December. Support is at 2605, 2565, and 2540 December, with resistance at 2650, 2680, and 2710 December. Trends in London are up with objectives of 1770 December. Support is at 1710, 1690, and 1670 December, with resistance at 1740, 1770, and 2000 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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