Sugar mixed as traders wait on supply news

FCOJ (NYBOT:OJF14)

General Comments: Futures closed higher. Colder weather will return to the US this weekend and next week, although Florida will not see the extreme cold. The freeze season is not all that far away and there is usually some speculative buying that appears at this time and as soon as the cold air starts to filter in from Canada. Traders are now expecting USDA to lower production even more in coming production reports. The greening disease has affected crops in a bigger way than many in the trade expected. Demand remains weak. Growing and harvest conditions in the state of Florida remain mostly good. Brazil is seeing near to above normal temperatures and dry conditions or a few showers.

Overnight News: Florida weather forecasts call for a few showers this week. Temperatures will average near to above normal this week and below normal this weekend.       

Chart Trends: Trends in FCOJ are up with objectives of 143.00 January. Support is at 135.00, 131.00, and 130.00 January, with resistance at 140.00, 143.00, and 145.50 January.

COFFEE (NYBOT:KCH14)

General Comments: Futures were higher, with speculative buying noted in New York. London was the leader on reports of excessive rains in the last week or two in Vietnam that has halted the harvest. The Coffee Association there is asking the government to buy 20% of the harvest this year in an effort to support world prices. Charts still show that futures are testing the upper end of the short term trading range in New York and that trends are up for at least the short term in London and Sao Paulo. Industry and producers appeared to be quiet, but both are watching carefully for signs of a confirmed low. 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, but the harvest should resume and then offers might increase. However, producers there also do not like the price, so the selling might stay weaker than normal. It will take more positive price action in London to get the producers to increase selling. 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.

Overnight News: Certified stocks are near unchanged today and are about 2.693 million bags. The ICO composite price is now 103.18 ct/lb. Brazil will get scattered showers. Temperatures will average near to below 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 mixed. Support is at 109.00, 105.50, and 104.00 March, and resistance is at 111.00, 115.00, and 117.00 March. Trends in London are up with objectives of 1620 January. Support is at 1520, 1500, and 1480 January, and resistance is at 1605, 1640, and 1665 January. Trends in Sao Paulo are mixed to up with objectives of 135.00 and 139.00 March. Support is at 131.00, 129.00, and 128.00 March, and resistance is at 135.00, 138.00, and 141.00 March.

COCOA (NYBOT:CCH14)

General Comments: Futures closed higher on follow through buying. Ideas of very strong demand are supporting prices. Talk of rains in parts of West Africa created supply fears as that means the Cocoa cannot be dried properly before getting to ports. 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. Butter prices are moving higher again will suport higher futures prices this week.

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 near unchanged today at 3.527 million bags.

Chart Trends: Trends in New York are up with no objectives. Support is at 2775, 2755, and 2740 March, with resistance at 2830, 2860, and 2890 March. Trends in London are mixed to up with objectives of 1810 March. Support is at 1740, 1710, and 1680 March, with resistance at 1800, 1830, and 1860 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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