Orange juice falls on weak demand despite poor production

FCOJ (NYBOT:OJX13)

General Comments: Futures closed lower again as the weather stays tranquil in Florida and as demand remains poor. There will be less production this year because of greening disease and some unfavorable weather earlier in the year, but OJ has no reason to rally as demand remains mostly on the weak side and there have been no tropical systems to hit the state. Growing conditions in the state of Florida remain mostly good. Dry weather has returned 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 mostly dry conditions. Temperatures will average near to above normal.  

Chart Trends: Trends in FCOJ are mixed to down with objectives of 116.00 and 107.00 November. Support is at 115.00, 112.00, and 109.00 November, with resistance at 121.00, 122.50, and 125.00 November.

COTTON (NYBOT:CTZ13)

General Comments: Futures closed lower. Trading was quiet and range bound as traders waited for more demand data and also the crop progress data. USDA showed that the harvest has been slow in its release after the close of yesterday. Crop condition ratings were good. Traders should get more reports on demand as the week moves on. Brazil conditions are reported to be very good in Bahia. US crop conditions right now are generally good in Texas. The Delta and Southeast are reporting generally favorable conditions as well. Trends are mostly down on the charts and price action yesterday was weak.

Overnight News: The Delta and Southeast will see dry weather. Temperatures will average near to below normal. Texas will see dry weather. Temperatures will average above normal. The USDA spot price is 79.69 ct/lb. today. ICE said that certified Cotton stocks are now 0.066 million bales, from 0.69 million yesterday.

Chart Trends: Trends in Cotton are mixed to down with no objectives. Support is at 82.50, 82.10, and 81.70 December, with resistance of 84.40, 85.50, and 85.80 December.

COFFEE (NYBOT:KCZ13)

General Comments: Futures were lower in all three markets. There was no news around to spark buying interest from roasters or speculators. Traders there are waiting for Vietnam to harvest and sell, but that is still a few weeks away. The harvest has been delayed due to rains throughout the country over the last couple of weeks. Traders expect more downward pressure on prices once the harvest starts to hit the market. Brazil is thought to have a lot of Coffee to sell yet, but the Real moved higher against the Dollar and offers from that origin were less. Colombia and Peru are actively selling. 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. Differentials were weaker yesterday. Brazil markets appear mostly quiet. Coffee is available in Central America, and offers were more animat3ed yesterday.

Overnight News: Certified stocks are lower today and are about 2.747 million bags. The ICO composite price is now 106.31 ct/lb. Brazil should get light showers or dry conditions. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should be mostly dry or get light showers. Hurricane Raymond will drop some big rains over parts of central Mexico in the next couple of days. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed to down with objectives of 112.00, 111.00, and 106.00 December. Support is at 111.00, 108.00, and 105.00 December, and resistance is at 115.00, 118.00, and 119.00 December. Trends in London are mixed to down with objectives of 1580 November. Support is at 1600, 1570, and 1540 November, and resistance is at 1650, 1670, and 1710 November. Trends in Sao Paulo are mixed. Support is at 136.50, 135.00, and 132.00 December, and resistance is at 140.00, 142.00, and 143.00 December.

SUGAR (NYBOT:SBH14)

General Comments: Futures were a little lower in consolidation trading and in reaction to the fire at Coopersucar warehouses in Santos port last Friday. Traders were looking for news and what the damage at the ports could mean to the Sugar market. No one appears too worried about the loss of the Sugar at the port. About 180,000 tons of Sugar was lost, but the bigger problem will be logistical snarls at ports as Coopersucar is a major exporter. Much of that export capacity is now gone for at least a few months. Meanwhile, countries like India and Thailand have a little less competition for sales. Dry weather or scattered showers are now reported in production areas of Brazil. India should still have more than enough production to allow for exports due to a very good monsoon season this year. There is talk of strong offers from Thailand, and Thai differentials are stable.

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

Chart Trends: Trends in New York are up with objectives of 2020 and 2175 March. Support is at 1915, 1905, and 1865 March, and resistance is at 1975, 2000, and 2015 March. Trends in London are up with objectives of 534.00 December. Support is at 507.00, 499.00, and 493.00 December, and resistance is at 517.00, 519.00, and 529.00 December.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed a little higher in consolidation trading. Futures held support areas on the charts and could work higher again as the fundamentals remain price positive. The US and Asian grind data last week showed strong demand as did the European data released a couple of weeks ago. The strong demand combined with ideas of short production this year should be enough to keep prices strong for at least the near term. 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 with scattered showers.

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 scattered showers and near normal temperatures. ICE certified stocks are lower today at 3.923 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2690, 2655, and 2645 December, with resistance at 2770, 2800, and 2830 December. Trends in London are down with objectives of 1710 and 1660 December. Support is at 1720, 1715, and 1700 December, with resistance at 1760, 1800, 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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