Crazy cotton

Softs Report

COTTON (NYBOT:CTK14)

General Comments: Futures were higher and made new highs for the move on follow through buying from lower tan expected Ginning data from USDA, then collapsed on demand worries. The domestic cash market remains tight and is supporting futures prices in the front months, but exporters have told wire services that export demand is vey soft. Most producers appear 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 temperaturas and a few showers. Warmer temperatures are slowly returning to production áreas in the U.S. and there has been some initial fieldwork done in far southern áreas, but forecasts now call for light precipitation and warmer temperatures this week in the Delta and Southeast. The Texas Panhandle was getting very welcome rains this morning. Producers plan to plant more Cotton this year, so supplies should be more next year as long as good growing conditions are seen.

Overnight News: Delta and Southeast áreas will get light showers Friday and Saturday, otherwise dry weather. Temperatures will average near to above normal late in the week. Texas will see mostly dry weather. Temperatures will average near to above normal at the end of the week and above normal this weekend, then near normal early next week. The USDA spot price is 86.51 ct/lb. today. ICE said that certified Cotton stocks are now 0.254 million bales, from 0.254 million yesterday. USDA said that net Upland Cotton export sales were 66,300 tons this year and 76,600 tons next year. Net Pima sales were 12,700 bales this year and 2,000 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 90.50, 89.90, and 88.60 May, with resistance of 91.80, 92.50, and 93.30 May.

FCOJ (NYBOT:OJK14)

General Comments: Futures closed a little higher after showing weakness on Tuesday. Forecasts for improved rains later this week in production áreas was negative. But, mostly the market is worried about the potential loss of demand and knows it is too early to worry about the hurricane season, which is the next major production risk for weather. Greening Disease and reduced Florida production keeps the prices supported. The weather is still good in Florida. 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 all parts of 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 afternoon showers are starting to arrive. Temperatures will average near to above normal,but will be cool on Thursday. Brazil should be mostly dry and warm.  

Chart Trends: Trends in FCOJ are down with objectives of 143.00 and 135.00 May. Support is at 147.00, 144.00, and 142.00 May, with resistance at 151.00, 152.50, and 155.00 May.

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