Coffee falls as markets wait on Vietnam harvest

FCOJ (NYBOT:OJX13)

General Comments: Futures closed little changed as the weather stays tranquil in Florida and as demand remains poor. November managed to close slightly higher while the other months were slightly lower as funds and others roll positions forward. There will be less production this year due to greening disease and some unfavorable weather earlier in the year, but 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.

SUGAR (NYBOT:SBH14)

General Comments: Futures were a little higher in consolidation trading. Prices remain supported because of the fire to the Coopesucar warehouses in Santos port in Brazil. Sugar was lost, but the loss of storage and problems with logistics is the major problem and the reason to buy futures. Sugar prices had dropped until recently due to big world production and especially big production ion Brazil. The production in Brazil and around the world is still there, but the ability of Brazil to export just got to be more of a problem. 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 higher on strong demand ideas against ideas of less production around the world and in West Africa. 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. In addition, the high prices should spark investment in production capacity by farmers and others. 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 áreas could be dry. Temperatures should average above normal. Brazil will get scattered showers and near normal temperatures. ICE certified stocks are lower today at 3.896 million bags.

Chart Trends: Trends in New York are mixed to up with objectives of 2810 December. Support is at 2730, 2690, and 2655 December, with resistance at 2800, 2830, and 2860 December. Trends in London are mixed to down with objectives of 1710 and 1660 December. Support is at 1720, 1715, and 1700 December, with resistance at 1760, 1800, and 1810 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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