Coffee falls as Vietnam harvest ramps up

FCOJ (NYBOT:OJX13)

General Comments: Futures closed lower and there was not much news to give anyone anything to do. 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. Fruit is reported to be sizing well and of consistent size and trees are reported in good condition. Some early harvest has started. 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. Support is at 116.00, 115.00, and 112.00 November, with resistance at 121.00, 122.50, and 125.00 November.

SUGAR (NYBOT:SBH14)

General Comments: Futures were lower on ideas that funds and other speculators got very long on the rally about 10 days ago and need to exit the market. Buying interest has disappeared since CFTC showed more longs than anticipated in the reports issued Monday night. Prices could continue to work lower in the short term. The fire at the port warehouses of Coopersucar has hurt the overall export pace from Brazil, but other origins, mostly India and Thailand, have been happy to step in and fill the void. The overall fundamental of big supplies remains. 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 is much more difficult now. Meanwhile, countries like India and Thailand have a little less competition for sales. Weather conditions in key production areas around the world are rated as mostly good.

Overnight News: Brazil could see light showers with near to above normal temperatures.

Chart Trends: Trends in New York are down with objectives of 1775 March. Support is at 1830, 1820, and 1815 March, and resistance is at 1880, 1905, and 1915 March. Trends in London are down with objectives of 471.00 and 442.00 December. Support is at 487.00, 483.00, and 478.00 December, and resistance is at 493.00, 498.00, and 500.00 December.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed lower as the West Africa harvest continues and arrivals increase. Bloomberg noted that Ivory Coast arrivals are 163,000 tons so far this month, from 85,000 tons at this point last year. Trends are turning down with the harvest. There have been no reports yet on quality or yields from Ghana or Ivory Coast, but Nigeria says it has good crops. The weather is good now, and arrivals at ports are increasing throughout the region. The harvest is underway and it could be that prices work lower for the near term. However, the overall fundamental picture should support higher prices as the supply situation should be tight and demand looks strong. That implies that the market should be able to digest the harvest relatively easily and resume the longer term rally soon.

Overnight News: Scattered showers or dry conditions are expected in West Africa. Temperatures will average near normal. Malaysia and Indonesia should see scattered showers. Temperatures should average above normal. Brazil will get dry conditions and near normal temperatures. ICE certified stocks are lower today at 3.802 million bags.

Chart Trends: Trends in New York are down with objectives of 2620, 2530, and 2410 December. Support is at 2655, 2645, and 2610 December, with resistance at 2695, 2750, and 2780 December. Trends in London are down with objectives of 1660 December. Support is at 1670, 1640, and 1610 December, with resistance at 1740, 1760, and 1800 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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