Cotton supported by export sales amid long liquidation

COTTON (NYBOT:CTH14)

General Comments: Futures closed a little lower on some speculative long liquidation to finish the week. Prices overall have been supported by very good demand as export sales have been well above 400,000 bales for the last couple of weeks. However, prices faded yesterday after trading close to resistance areas on Thursday. The price action last week left futures in a range as the market could not test support or resistance areas. Prices are high enough now to cut off some demand and also to make some producers consider increasing planted area next year. The market needs to keep seeing demand to keep prices well supported. It is possible that futures continue in a trading range between 82.00 and 87.00 basis nearby futures for a while. Brazil conditions are reported to be very good in Bahia with light precipitation and warm temperatures.

Overnight News: The Delta and Southeast will see more precipitation move from west to east tomorrow and Wednesday. Temperatures will moderate this week before turning cold again late this week. Texas will see dry conditions except for light precipitation tomorrow. Temperatures will average below normal. The USDA spot price is 82.34 ct/lb. today. ICE said that certified Cotton stocks are now 0.168 million bales, from 0.158 million yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 85.00, 84.00, and 83.70 March, with resistance of 86.80, 87.00, and 88.20 March.

FCOJ (NYBOT:OJH14)

General Comments: Futures closed higher again. Spreads were stronger, a sign of some speculative buying. There does not appear to be any cold weather threats on the horizon for the crops in Florida, but it has been dry. Florida is harvesting a very small crop of oranges due to disease problems with the greening disease. Growing and harvest conditions in the state of Florida remain mostly good, with mostly dry conditions and moderate temperatures. More rain would be beneficial. Irrigation water is available and is being used. Harvest remains active for early and mid-Oranges, but fruit sizes are reported to be small. The Valencia harvest is expanding. Brazil is seeing near to above normal temperatures and mostly dry conditions.

Overnight News: Florida weather forecasts call for mostly dry conditions, but some showers are possible late this week. Temperatures will average above normal.

Chart Trends: Trends in FCOJ are mixed. Support is at 140.00, 137.00, and 135.00 March, with resistance at 145.00, 147.00, and 150.00 March.

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