Cocoa and cotton close higher

Weekly softs outlook

Cocoa (NYBOT:CCK14)  

General Comments: Cocoa closed higher and once again started to turn short term trends up on the charts. Ideas of tight supplies provided the most support. The main crop harvest is about over now, and the demand reports are solid, so prices can continue to work higher in the short term farmers offer less and as farmers wait for the mid crop to develop a little more. Mid crop conditions seem fair to good in the rest of West Africa and generally good in Southeast Asia. Butter ratios remain strong on ideas of short supplies of Cocoa Butter in Europe and North America. Demand is strong as the Easter holiday is coming soon. Asian demand has been strong and Indonesia is importing beans for processing. A very good midcrop production is possible from Africa, but producers say more rain is needed, especially in central and northern areas. Some showers are still reported in southern areas that will help.

Overnight News: Mostly dry expected in West Africa, but showers are expected to increase in amounts and coverage later in the week. 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 to above normal temperatures. ICE certified stocks are higher today at 4.573 million bags.

Chart Trends: Trends in New York are mixed to up with objectives of 3095, 3115, and 3235. Support is at 2975, 2920, and 2900, with resistance at 3050, 3080, and 3110. Trends in London are mixed to up with objectives of 1935 and 2005. Support is at 1855, 1840, and 1825, with resistance at 1920, 1950 and 1980.

Cotton (NYBOT:CTK14)

General Comments: Futures were mostly higher. The domestic cash market remains very tight and is supporting futures prices in the front months. Worries about demand down the road, especially from China, has hurt price action overall. The domestic cash market has been strong due to very limited offers against the good demand. Most producers upper to be sold out, and spinners in the east are forced to pay up to get supplies. However, many think that demand can start to fade now with the high prices and buying interest is less at this time in futures. Brazil conditions are reported to be good in Bahia with warm temperatures, but the state needs rain and should get more this week. Warmer temperatures are slowly returning to production areas in the United States and there has been some initial fieldwork done in far southern areas.

Overnight News: Delta areas should be dry all week and Southeast areas will get showers today, then will turn dry. Showers are possible in all areas this weekend. Temperatures will average near to above normal. Texas will see dry weather. Temperatures will average near to above normal. The USDA spot price is 87.09 ct/lb. today. ICE said that certified Cotton stocks are now 0.262 million bales, from 0.261 million yesterday.

Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 90.40, 89.60, and 89.00, with resistance of 92.90, 93.40, and 93.75.

FCOJ (NYBOT:OJK14)

General Comments: Futures closed higher on ideas of tight supplies available to the market. The freeze season is passing and speculators are liquidating some positions. Some needed showers were seen in Florida over the weekend, but the weather stays dry in Brazil. Florida fruit sizes have been small and the Greening Disease takes more and more of a toll on crops. The weather is still good in Florida and the chances to freeze trees is less as the Sun gets higher in the sky and daylight hours increase. The Greening Disease is working hard to keep overall production down. The disease will affect production for several more years. Brazil has seen weather might that be stressing trees as reports indicate that many áreas still need rain. Mostly dry weather is in the forecast for Brazil. Florida harvest conditions remain good. The Valencia harvest is strong. Blooms are being reported in South Florida. Demand remains a big problem for the Bulls. Many consumers continue to look for other sources of nutrition that is found in Orange Juice due to the higher prices that are coming from the lower production in Florida and Brazil.

Overnight News: Florida weather forecasts call for mostly dry conditions, but late after4noon showers are posible today and tomorrow. Temperatures will average near to above normal.

Chart Trends: Trends in FCOJ are mixed to down with objectives of 148.00 and 143.00 May. Support is at 148.00, 144.00, and 142.00 May, with resistance at 156.00, 157.00, and 159.00 May.

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