Orange juice rises as Karen threat fizzles

FCOJ (NYBOT:OJX13)

General Comments: Futures closed slightly higher in range trading. What was left of Karen moved into northern sections of Florida today with some big rains, but no damaging winds. Florida weather conditions overall remain good, with good rains before and good irrigation water available now. Production will be down due to the greening disease and some drought stress early in the year, but these losses are mostly factored into the price. 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 mostly dry conditions.

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

Chart Trends: Trends in FCOJ are mixed. Support is at 126.00, 125.00, and 122.50 November, with resistance at 132.00, 135.00, and 139.00 November.

COTTON (NYBOT:CTZ13)

General Comments: Futures closed sharply lower as Tropical Storm Karen moved away from the state late in the weekend, and is in a much diminished state as weather conditions in the Gulf partially broke the system apart. The storm did not hurt open bolls or hurt overall quality, so speculators sold after buying last week. Traders also talk about monsoon rains in India that are slow to withdraw this year. The extra rains could really hurt quality there, and maybe yields. However, it is turning warmer and drier there this week after some big rains last week. Worries about Chinese production are also heard after some big typhoons passed near important production areas. This area is also turning drier this week. US crop conditions right now are generally good in Texas. Trends turned mixed on the charts with the price action yesterday.

Overnight News: The Delta will be dry and Southeast will see showers in the east, otherwise dry weather. Temperatures will average above normal. Texas will see dry weather through Thursday, then light showers. Temperatures will average above normal. The USDA spot price is not available today. ICE said that certified Cotton stocks are now 0.012 million bales, from 0.011 million yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 83.60, 82.90, and 82.10 December, with resistance of 84.20, 85.50, and 85.80 December.

Next page: Coffee, Sugar and Cocoa

COFFEE (NYBOT:KCZ13)

General Comments: Futures were mixed, with London and New York a little higher, but Sao Paulo trading a little lower. London tested support areas in early trading, then rebounded to close unchanged to higher. Follow through buying is possible today. However, traders remain bearish overall on Coffee prices due to big supplies available and only light demand. Producers all over the world are worried about the low prices and are trying to hold back on offers, but differentials and futures prices remain very low. Showers are in the forecast in Brazil. Brazil markets appear mostly quiet. Coffee is available in Central America, but the market there seems very quiet. Colombia is offering Coffee at stable differentials. Central America crop conditions are said to be good overall, but the rust is still a big problem.

Overnight News: Certified stocks are a little lower today and are about 2.761 million bags. The ICO composite price is now 109.09 ct/lb. Brazil should get mostly dry weather. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get showers and rains. Northern Mexico should be mostly dry. Temperatures should average near to above normal. Brazil exported 2.3 million bags of Coffee in September, 17% more tan last year. Calendar year-to-date exports are now19.9 million bags, up 16% from last year.

Chart Trends: Trends in New York are mixed to down with objectives of 112.00, 111.00, and 106.00 December. Support is at 113.00, 111.00, and 108.00 December, and resistance is at 117.00, 119.00, and 121.00 December. Trends in London are mixed. Support is at 1670, 1640, and 1600 November, and resistance is at 1740, 1755, and 1770 November. Trends in Sao Paulo are mixed. Support is at 135.00, 132.00, and 129.00 December, and resistance is at 140.00, 142.00, and 145.50 December.

SUGAR (NYBOT:SBV13)

General Comments: Futures were higher as traders once again talked of rain in Brazil and the potential for production losses there. Trends remain up on the charts. Drier weather has returned to production areas, but the harvest has been further delayed by recent rains. Heavier rains seen in the last few weeks could have hurt Sugar yields, but conditions are drier now. India also might have production problems as the monsoon has been slow to recede. It is starting to recede now, and India should still have more than enough production to allow for exports. There is talk of strong offers from Thailand, and Thai differentials are stable.

Overnight News: Brazil could see mostly dry conditions and near to above normal temperatures.

Chart Trends: Trends in New York are up with objectives of 1880, 1900, and 1940 March. Support is at 1835, 1825, and 1815 March, and resistance is at 1870, 1880, and 1910 March. Trends in London are up with objectives of 511.00, 513.00, and 534.00 December. Support is at 495.00, 493.00, and 487.00 December, and resistance is at 501.00, 505.00, and 508.00 December.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed higher again on more speculative trading. The ICCO released a report that said that Cocoa could have a deficit production for the next five years and this report created a lot of the buying interest. Production in West Africa suffered this year due to drought in production areas. Rains are fine now, but are expected to be above average for the last half of the month. More than normal rains could impede harvest progress and hurt bean quality. The quality could be hurt as most farmers do not have good storage facilities. However, a strong rally now might encourage farmers to sell, and that would help with the quality as the beans would move to better facilities near the ports. Malaysia and Indonesia weather is 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 4.144 million bags.

Chart Trends: Trends in New York are up with objectives of 2720 and 2810 December. Support is at 2655, 2645, and 2625 December, with resistance at 2710, 2740, and 2770 December. Trends in London are up with objectives of 1770 and 1840 December. Support is at 1730, 1715, and 1700 December, with resistance at 1750, 1780, and 1810 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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