I take my coffee strong

Cotton (NYBOT:CTV14)

Futures closed higher on some short covering and on reported end user pricing. Price action overall remains very weak on ideas of big world supplies, but new demand could help to hold prices in a trading range. Traders will lookfor confirmation of new Business in the weekly export sales report from USDA. The United States is expected to produce a very good crop, and production ideas are high on the Indian subcontinent and also in China. Demand remains a problem for US sellers, although export interest has started to improve due to the current price weakness. The lack of Chinese buying reflects in part the moves by the government to sell Cotton into the domestic market and to reduce stocks in warehouses. Good weather and the increased planted area create ideas of big production in the US and around the world. Current conditions support good growth in Texas. Brazil conditions are reported to be good in Bahia with warm temperatures and mostly dry weather. Conditions are called good to very good in India and Pakistan as better rains are being reported, but it reamins too dry in the south.

Overnight News: The Southeast and Delta will get scattered showers late this week. Temperatures will average near to above normal. Texas will see dry weather. Temperatures will average near to above normal. The USDA spot price is 65.26 ct/lb. today. ICE said that certified Cotton stocks are now 0.119 million bales, from 0.122 million yesterday.

Chart Trends: Trends in Cotton are mixed to down with no objectives. Support is at 62.60, 62.00, and 61.40 December, with resistance of 64.20, 65.30, and 66.00 December.
 

Notes: 

1) Unit is Chinese yuan a metric ton;

2) Change is the day's settlement minus previous settlement;

3) Volume and open interest are in lots;

4) One lot is equivalent to 5 metric tons.

  

Coffee (NYBOT:KCU14)

The markets turned sharply lower in early trading, with the big selling starting in London. New York was able to recover most of the losses, but London remained pinned as long traders left the market. Some selling from producers was noted, and there was a lot more producer selling to be done, but the buy side of the market was mostly quiet as they wait for the volatility to calm down. Speculators were sellers on what appeared to be long liquidation. London was the weaker market, with Robusta prices feeling pressure from ideas that Brazil will produce more Robusta in areas that have not been affected by the drought and on better weather in Vietnam. Rains are now a frequent feature in Vietnamese production areas, and ideas are that trees there are in good condition. The potential for big production losses in Brazil this year are real, and traders are starting to worry about production next year as well as some contra seasonal rains hit coffee areas in the south. The rains could create premature flowering and the flowers could be aborted as it has turned dry again. 

Overnight News: Certified stocks are lower today and are about 2.434 million bags. The ICO composite price is now 163.88 ct/lb. Brazil will get mostly dry weather. Temperatures will average above normal. Colombia should get scattered showers, and Central America and Mexico should get some showers in the mountains. Temperatures should average mostly above normal.

Chart Trends: Trends in New York are mixed. Support is at 185.00, 183.00, and 178.00 September, and resistance is at 200.00, 204.00 and 207.00 September. Trends in London are mixed. Support is at 2000, 1970, and 1960 September, and resistance is at 2030, 2045, and 2080 September. Trends in Sao Paulo are mixed. Support is at 222.00, 220.00, and 218.00 September, and resistance is at 235.00, 243.00, and 249.00 September.

 

Sugar

Futures and cash markets closed mostly lower as production remained strong. The markets inititally rallied sharply after news of a warehouse fire from Cosan in Brazil. The fire hit the warehouse at Santos port and caused losses of up to 15,000 tons of Sugar. However, the fire was contained and no additional losses are expected. The market collapsed once it Heard the news of relatively monor losses and closed very close to the lows of the day. Follow through selling is posible today. Demand is now a primary concern as Ramadan is over and demand should start to increase as North Africa and the Middle East start to restock. However, the demand has been slow to develop so far. Brazil continues to harvest the crop rapidly and make sugar available to the market, and Thailand also continues to offer. Both countries are offering at negative differentials at this time as buyers wait for prices to weaken even more. The Indian monsoon is improving and improving production prospects for Sugar, but overall total rains for the season remain well behind normal through the end of July.  

Overnight News: Brazil could see dry conditions and above normal temperatures.

Chart Trends: Trends in New York are down with objectives of 1610 October. Support is at 1615, 1600, and 1570 October, and resistance is at 1675, 1690, and 1720 October. Trends in London are down with objectives of 429.00 and 411.00 October. Support is at 433.00, 428.00, and 425.00 October, and resistance is at 440.00, 443.00, and 445.00 October.

 

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