Cotton falls as report shows production increases

COTTON (NYBOT:CTZ13)

General Comments: Futures closed mostly a little lower in response to the USDA reports that showed very good production. Increased production was expected, but ending stocks increase as demand did not increase all that much. Domestic demand was increased slightly, but export demand was left unchanged. The reaction was rather muted, but speculators will remain short for now. Good weather in US productions areas should be replaced by scattered showers over the middle of the week, but the crop should remain in good condition as the rains are not expected to be big. Traders should get more reports on demand this week. 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.

Overnight News: The Delta and Southeast will see dry weather. Temperatures will average below normal. Texas will see dry weather. Temperatures will average below normal. The USDA spot price is 74.41 ct/lb. today. ICE said that certified Cotton stocks are now 0.176 million bales, from 0.172 million yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 75.90, 75.30, and 75.00 December, with resistance of 77.90, 78.80, and 70.00 December.

FCOJ (NYBOT:OJX13)

General Comments: Futures closed sharply higher on lower tan expected production estimates from USDA. Traders expected USDA to estimate production close to a year ago, but production in Florida was estimated at just 125 million boxes, more than 8 million boxes less than last year. The ggreening disease has affected crops in a bigger way than many in the trade expected. Demand remains weak 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 below normal temperatures and dry conditions or a few 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 up with objectives of 134.00 and 143.00 January. Support is at 126.00, 122.00, and 120.00 January, with resistance at 132.00, 133.00, and 134.00 January.

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