Cotton rises on strong export sales

COFFEE (NYBOT:KCZ14)

General Comments: Futures were higher on what appeared to be short covering from speculators. Charts show that futures are now testing the upper end of the short term trading range. What happens to prices early this week might be important to the short term direction of Coffee prices. Industry and producers appeared to be quiet. Traders still think that there is still a lot of Coffee to sell in Brazil and in northern South America and also know that a big crop is coming from Vietnam. Vietnam is at harvest, but rains are big there right now and no harvesting is being done. So far, offers from Vietnam have been light. Brazil has a lot of Coffee to sell yet, but the market there is quiet. The rest of northern Latin America was quiet, but there is talk of a lot of Coffee there as well. The new harvest is underway in Central America. Brazil is studying new support programs for producers in that country and could announce something this week.

Overnight News: Certified stocks are lower today and are about 2.697 million bags. GCA stocks are now 5.190 million bags, from 5.446 million last month. The ICO composite price is now 101.09 ct/lb. Brazil will get scattered showers. Temperatures will average near to above normal, but will turn cooler late in the week. 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 mixed. Support is at 102.00, 99.00, and 96.00 December, and resistance is at 107.00, 108.00, and 110.00 December. Trends in London are mixed. Support is at 1480, 1440, and 1430 January, and resistance is at 1520, 1575, and 1605 January. Trends in Sao Paulo are mixed. Support is at 128.00, 125.00, and 122.00 December, and resistance is at 132.50, 135.00, and 138.00 December.

SUGAR (NYBOT:SBH14)

General Comments: Futures were lower again Friday as short term trends moved down again. Traders remain bearish on ideas of big supplies available to the cash market. Chart trends remain generally down as offers remain available. Countries like India and Thailand are selling as much as possible. The world still has plenty of Sugar available and that the demand is not real strong. No big demand reports have been seen in the press in the last couple of weeks. Weather conditions in key production areas around the world are rated as mostly good. There has not been any news of losses to Sugar areas in Vietnam and China in the wake of the storm that moved into those countries after devastating Philippines, but some losses are possible. Traders are also watching weather in the Bay of Bengal where more rain could hurt some Sugar production potential. However, India is said to be offering even with the potential losses.

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

Chart Trends: Trends in New York are down with no objectives. Support is at 1750, 1735, and 1715 March, and resistance is at 1795, 1815, and 1825 March. Trends in London are down with objectives of 457.00 March. Support is at 463.00, 460.00, and 457.00 March, and resistance is at 468.00, 472.00, and 477.00 March.

COCOA (NYBOT:CCH14)

General Comments: Futures closed higher on follow through buying. Futures are now moving back to the top end of the recent range. It is harvest time in West Africa, and the harvest is continuing under good conditions. Indonesia could get some rain this week to disrupt the harvest. However, the overall fundamental picture should support generally higher prices as the supply situation should be tight once the harvest selling is done. Trade sources such as the ICCO keep talking about an extended period of short supplies and that the short production scenario could last for years. Demand has slacked off since the big surge of the last several weeks. Reports indicate that chocolate manufactures are now covered through the big demand holiday period coming up and do not need to buy. That implies that Cocoa prices can work lower through the harvest. Price action on Friday suggests otherwise.

Overnight News: Scattered showers or dry conditions are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see scattered showers. Temperatures should average near to above normal. Brazil will get dry conditions and near normal temperatures. ICE certified stocks are lower today at 3.571 million bags.

Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2685, 2650, and 2630 March, with resistance at 2755, 2775, and 2800 March. Trends in London are mixed to up with objectives of 1760 and 1810 March. Support is at 1710, 1680, and 1660 March, with resistance at 1740, 1750, and 1770 March.

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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