Sugar falls as buying interest disappears on CFTC report

FCOJ (NYBOT:OJX13)

General Comments: Futures closed higher on speculative short covering. Many traders were getting out of positions before the deliveries start at the end of the week. There will be less production this year due to greening disease and some unfavorable weather earlier in the year. However, 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.

COFFEE (NYBOT:KCZ13)

General Comments: Futures were little changed amid little trading interest. The Vietnamese harvest will continue under good conditions as weather is mostly dry. The production in Vietnam is expected to be very big and traders expect more downward pressure on prices as the harvest starts to hit the market Brazil has a lot of Coffee to sell yet, but the market there seems quiet now. Colombia is actively selling even with very cheap prices and the production there is much larger than in recent years. The rest of northern Latin America was quiet. Coffee is available in Central America, but the market was quiet. There were offers, but bids and offers were far apart.

Overnight News: Certified stocks are lower today and are about 2.711 million bags. The ICO composite price is now 101.47 ct/lb. Brazil should get light showers. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get light showers. Temperatures should average near to above normal.

Chart Trends: Trends in New York are down with objectives of 106.00 December. Support is at 105.00, 102.00, and 99.00 December, and resistance is at 110.00, 113.50, and 115.00 December. Trends in London are down with no objectives. Support is at 1460, 1430, and 1400 January, and resistance is at 1575, 1605, and 1665 January. Trends in Sao Paulo are down with objectives of 123.50 December. Support is at 129.00, 126.00, and 123.00 December, and resistance is at 135.00, 136.50, and 139.00 December.

COCOA (NYBOT:CCZ13)

General Comments: Futures closed mixed as the West Africa harvest continues and arrivals increase. Ivory Coast is estimating its production at about 1.4 million tons this year, about unchanged from last year. There have been no reports yet on quality or yields from Ghana, 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 2645, 2610, and 2560 December, with resistance at 2675, 2695, and 2750 December. Trends in London are down with objectives of 1660 December. Support is at 1670, 1640, and 1610 December, with resistance at 1700, 1725, 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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