Coffee gains after buyers step up despite good weather in Brazil

FCOJ (NYBOT:OJX13)

General Comments: Futures closed higher after making new lows for the move. It was an outside day up on the charts, and it was a reversal day as well. It is possible that FCOJ futures can rally through the end of the week. The historical peak of the hurricane season has passed and so far no storms have come close to the state. There are still no real threats showing in the tropical Atlantic for Florida, and none in the forecast through at least the end of the week. 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 to above normal temperatures and showers.

Overnight News: Florida weather forecasts call for some showers. Temperatures will average near normal.

Chart Trends: Trends in FCOJ are mixed.. Support is at 125.00, 124.00, and 122.50 November, with resistance at 131.00, 132.00, and 135.00 November.

SUGAR (NYBOT:SBV13)

General Comments: Futures were higher in reaction to data from Unica that showed less production of Sugar. Other private sources and CONAB have recently reduced Sugarcane and Sugar production estimates due to por growing conditions earlier in the year, and UNICA will most likely do the same on October 1. Futures still appear locked in a trading range at the moment, but are now threatening to break out higher. Brazil weather has been mostly good for harvesting. Some showers are reported now that will help support growth for the next crop but will delay harvesting of the current crop. Thailand expects more production this year, and is actively offering their supplies into the world market. India and Brazil are the same. Differentials there have been moving lower in the last few weeks, but are more stable now. Brazil and India are selling as well.

Overnight News: Brazil could see scattered showers and moderate temperatures.

Chart Trends: Trends in New York are mixed. Support is at 1750, 1740, and 1710 March, and resistance is at 1810, 1820, and 1830 March. Trends in London are mixed. Support is at 483.00, 479.00, and 475.00 December, and resistance is at 490.00, 494.00, and 495.00 December.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed a little lower in quiet trading. It was a consolidation trade, with no one real interested in buying or selling much.. The fundamentals are considered bullish, but chart action shows that much of the fundamental news might be part of the price. Worries are that there will not be enough Cocoa beans available for processing for end of the year holiday demand. Cocoa is between crops, and offers are light. 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. Ideas are that drought and hot temperatures seen earlier in the growing season has hurt bean size and yields. Malaysia and Indonesia crops appear to be in good condition and weather is called favorable.

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 4.321 million bags.

Chart Trends: Trends in New York are mixed to up with objectives of 2720 December. Support is at 2565, 2540, and 2510 December, with resistance at 2625, 2650, and 2680 December. Trends in London are mixed. Support is at 1680, 1670, and 1650 December, with resistance at 1710, 1730, and 1740 December.

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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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