Coffee rises as producers hold out for higher prices

FCOJ (NYBOT:OJF14)

General Comments: Futures closed higher on support from the reduced production estimates from USDA. It remains very cold in parts of the US, but Florida remains warm. The state is being protected from the very cold temperatures to the north by a very strong jet stream that will not let the cold penetrate into the Deep South. Traders are expecting USDA to show unchanged production in its estimates this week, but to lower production even more in coming production reports. The greening disease has affected crops in a big way and could cause reduced production for the next few years. Growing and harvest conditions in the state of Florida remain mostly good. It has turned mostly dry, which is seasonal, and reports indicate that crops are in good condition. Irrigation water is available. Harvest is very active. Brazil is seeing near to above normal temperatures and scattered showers.

Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average mostly above normal.

Chart Trends: Trends in FCOJ are up with objectives of 145.00 January. Support is at 141.00, 138.00, and 136.50 January, with resistance at 145.00, 148.00, and 149.00 January.

SUGAR (NYBOT:SBH14)

General Comments: Futures were lower again and made new lows for the move again before closing just a little lower. The primary focus of the market remains big supplies. Increased offers from India and Thailand combined with news that Coopersucar will start to export from its Santos terminals next month to keep big supplies in front of everyone. Coopersucar said last week that it should have its export warehouse open in part again next month and expects to meet all export targets for this year and next year. The market needs some demand news, but has had trouble finding any demand outside of normal. Chart trends remain down in New York and London. Weather conditions in key production areas around the world are rated as mostly good.

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

Chart Trends: Trends in New York are down with no objectives. Support is at 1655, 1640, and 1610 March, and resistance is at 1685, 1700, and 1715 March. Trends in London are down with objectives of 446.00 March. Support is at 446.00, 440.00, and 434.00 March, and resistance is at 454.00, 460.00, and 465.00 March.

COCOA (NYBOT:CCH14)

General Comments: Futures closed higher in range trading on no demand news and good harvest conditions in West Africa. Very little has changed fundamentally, and that could become a challenge for the bulls as the market needs news to keep he move higher intact. Supplies should be available now as the main crop harvest is still active in West Africa. Reports indicate that rains are minimal this week in West Africa, which should help harvest progress and processing progress. Much of West Africa is now reporting reduced production due to stressful conditions earlier in the growing season, but so far arrivals and purchases have been strong. The overall fundamental picture should support generally higher prices as the supply situation should be tight once the harvest selling is done. Midcrop production conditions are rated as good and a good mid-crop production is expected in the Spring.

Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average mostly 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 slightly higher today at 3.341 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2730, 2700, and 2650 March, with resistance at 2790, 2840, and 2870 March. Trends in London are mixed. Support is at 1710, 1680, and 1660 March, with resistance at 1775, 1790, and 1820 March.

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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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