U.S. weather assists softs production

Softs outlook

COTTON

General Comments: Futures were a little lower in consolidation trading. Price action showed that the market is still factoring in the improved U.S. weather situation. USDA showed that planting has caught up with the average for the date.

Weather is much better in the Delta and Southeast, and producers should be active finishing planting. Panhandle areas got some rain that should ease some severe stress in the region. It is likely that both dry land and irrigated crops will be planted as quickly as possible.

It is now more possible for the U.S. to have a good to very good crop this year, although there is still the growing season in front that will need to feature continued very good weather. Good weather is expected over the next few days.  Brazil conditions are reported to be good in Bahia with warm temperatures and a few showers.

Overnight News: The Southeast and Delta will get scattered showers. Temperatures will average mostly above normal. Texas will see mostly dry weather, but showers are forecast on Friday and Saturday. Temperatures will average above normal. The USDA spot price is 78.55 ct/lb. today. ICE said that certified cotton stocks are now 0.420 million bales, from 0.422 million yesterday.

Chart Trends: Trends in cotton are down with no objectives. Support is at 84.40, 83.90, and 83.60 July, with resistance of 85.70, 87.60, and 88.80 July.


FROZEN CONCENTRATED ORANGE JUICE

General Comments: Futures closed little changed in light volume trading. Most of the trading seemed to be selling in the nearby months and buying in the winter months as traders anticipate another short production year next year due to the greening disease. Charts still show that trends are mostly down.

Weather conditions are good in Florida and the next production looks good, with fruit reported to be developing well. Fruit is marble sized or bigger, and trees are showing a lot of new growth. The Valencia harvest continues to show progress.

Production areas in Brazil need more precipitation but are looking at a dry week. Weak overall Florida production and the overall dry weather in Brazil that could impact production there continues to support prices longer term.

Right now, though, the market has to find a trigger to move prices higher, but it is too early from the hurricane season and demand overall remains lackluster.

Overnight News: Florida weather forecasts call for dry weather. Temperatures will average above normal. Brazil should be mostly dry and warm.                                                               

Chart Trends: Trends in FCOJ are mixed to down with objectives of 147.00 July. Support is at 156.00, 153.50, and 152.00 July, with resistance at 160.00, 164.00, and 165.00 July.


COFFEE

General Comments: Futures closed lower on what appeared to be mostly speculative selling. Price action remains generally weak as the Brazil harvest expands amid few reports on yields. Peru seems to be the best seller right now, although there is talk of offers from Brazil and Vietnam.

Central America seems quieter as differentials offered there are weak. Funds and other speculators were sellers. The market is still waiting for news of actual harvest yields in Brazil, but the reports have been hard to find. Reports indicate that Vietnam has become more quiet after a big first half sales campaign.

Traders look for more Robusta in the market, but there is talk of fewer offers from Vietnam as the export pace has been strong lately and as producers are worried that El Nino could hurt the next production. Rains are sporadic in Central America and flowering is not strong in all areas. The region is too dry for best production, but better rains are now in the forecast.

Overnight News: Certified stocks are lower today and are about 2.558 million bags. The ICO composite price is now 153.33 ct/lb. Brazil will get mostly dry weather. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get some showers in most areas, but mostly in Eastern Mexico and all of Central America. Temperatures should average mostly above normal.

Chart Trends: Trends in New York are down with objectives of 169.00 and 155.00 July. Support is at 170.00, 168.00, and 147.00 July, and resistance is at 180.00, 183.00 and 186.00 July. Trends in London are down with objectives of 1800 July. Support is at 1900, 1840, and 1810 July, and resistance is at 1970, 1980, and 2000 July. Trends in Sao Paulo are down with objectives of 204.00 and 190.00 September. Support is at 210.00, 209.00, and 208.00 September, and resistance is at 220.00, 226.00, and 231.00 September.

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