Cocoa moves higher as traders wait on grind data

COCOA (NYBOT:CCH14)

General Comments: Futures closed slightly higher as traders waited for the U.S. grind data. The U.S. processed 125,332 tons of Cocoa in the last quarter, up 4.4% from the previous year and in line with trade expectations. The EU grind data was above expectations and helped support futures on Wednesday and Thursday. But, Callebrut noted to the press that supplies from West Africa have increased and the market has more Cocoa to work with. The main harvest should be coming to an end soon in Africa, and the mid-crop harvest is still a couple of months away. The overall fundamental picture should support generally strong prices as the supply situation should be tight on strong demand for the longer term. Much of the increased demand should come from Asia. A good midcrop production is expected in the Spring from Africa as weather now is good for the mid-crop development. Asian growing conditions are reported to be good.

Overnight News: Light showers 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 or light showers and near normal temperatures. ICE certified stocks are sharply higher today at 3.770 million bags.

Chart Trends: Trends in New York are mixed to up with objectives of 2810, 2880, and 2890 March. Support is at 2720, 2700, and 2670 March, with resistance at 2770, 2800, and 2835 March. Trends in London are up with objectives of 1810 March. Support is at 1745, 1720, and 1710 March, with resistance at 1780, 1800, and 1810 March.

COTTON (NYBOT:CTH14)

General Comments: Futures closed higher as USDA showed higher than expected export sales for the previous week. Traders had expected improved sales, but the improvement was much more tan had expected and there are chances that the improved demand can continue. Traders say that there is good demand just under the current price area as mills here and in other parts of the world need to get some coverage. China is the number one buyer of US Cotton, but others could be using the recent price weakness to gain coverage while China has been buying in smaller quantities. The US economy is improving slowly and should support increases in demand over time as people start to buy clothes again. Brazil conditions are reported to be very good in Bahia with light precipitation and warm temperatures.

Overnight News: The Delta and Southeast will see dry conditions. Temperatures will average near to below normal this week and near to above normal this weekend. Texas will see dry conditions. Temperatures will average above normal. The USDA spot price is 82.46 ct/lb. today. ICE said that certified Cotton stocks are now 0.050 million bales, from 0.049 million yesterday.

Chart Trends: Trends in Cotton are up with objectives of 8750 and 9000 March. Support is at 85.50, 85.00, and 84.00 March, with resistance of 86.85, 87.00, and 87.60 March.

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