Today's trends on cotton, cocoa, coffee and more

July 25, 2017 09:42 AM

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Coffee
General Comments:  New York and London were lower yesterday as the weather forecasts removed chances for damaging temperatures in Brazil and on ideas that more coffee would soon be appearing from Vietnam. Vietnam is supposed to have much more coffee to sell but ideas are that producers and middlemen are holding back and are waiting for higher prices.  The weather in Brazil features moderating temperatures that have now moved back to above normal.  There are no forecasts for damaging old from anyone.  However, reports from Reuters are that Broca worm is moving into crops due to higher than normal precipitation.  The harvest has been delayed somewhat due to rains.  Talk that there could be another year of production that is less than demand is still around.  There are ideas that the following year will feature production much above demand.  Buying interest improved in cash markets last week, but yesterday featured offers with limited buying interest.  Prices have the chance to move as high as 140.00 NY September within the next couple of weeks.

Overnight News:  Certified stocks are slightly lower today and are about 1.539 million bags.  The ICO composite price is now 128.57 ct/lb.  Brazil will get mostly dry weather.  Temperatures should average near to above normal.  Colombia should get scattered to isolated showers.  Central America and southern Mexico should get scattered showers, with big storms today in southern Mexico.  Temperatures should average near to above normal.           

Chart Trends:  Trends in New York are mixed to up with objectives of 140.00 and 150.00 September.  Support is at 131.00, 128.00, and 126.00 September, and resistance is at 135.00, 137.00 and 139.00 September.  Trends in London are mixed.   Support is at 2100, 2060, and 2020 September, and resistance is at 2150, 2160, and 2170 September.  

Sugar
General Comments:  Futures in London and New York were unchanged to a little higher in consolidation trading.  Bearish traders are looking at increasing supplies coming to the market, while bullish traders hope for improved demand and also think that the situation is a little tight in the short term.  New York still appears to be breaking out to the upside on the daily charts on ideas that all of the bearish news is now part of the price.  The market has been enjoying its strongest rally in quite some time, but the rally seems to be running out of steam.  Growing conditions are rated good in just about all producer countries right now, and the big harvest in Brazil continues.  The harvest pace has been below last year until now.  Production potential in India and Thailand is improved.  It is raining in much of India now as the monsoon is active.  Thailand also hopes for an improved monsoon season this year and is getting rains now.  The rest of Southeast Asia is seeing average to above average rains so far this year.  Some problems are being reported in Europe and Russia for the beet Sugar sale    

Overnight News:  Brazil will get mostly dry conditions.  Temperatures should average near to above normal. 

Chart Trends: Trends in New York are mixed to up with objectives of 1540 and 1660 October.  Support is at 1390, 1370, and 1320 October, and resistance is at 1470, 1510, and 1530 October.  Trends in London are mixed.  Support is at 390.00, 385.00, and 377.00 October, and resistance is at 400.00, 407.00, and 410.00 October.

Cocoa
General Comments:  Futures markets were mostly unchanged in New York and a little lower in London.  Overall the market seems to be preparing for a move higher.  The analysts keep talking about a supply glut from West Africa as Ivory Coast had a huge production this year and is expected to have a big crop starting harvest this Fall.  The production should be less than last year as farmers invest less, but should still be large as the weather has been good.  The offer side of the market appears to be less right now as West Africa is between crops.  All of the countries in West Africa expect higher year on year production.  The growing conditions in other parts of the world are generally good.  East African conditions are now called good, although more rain would be beneficial.  Brazil remains too dry.  Good conditions are still being reported in Southeast Asia. 

Overnight News:  Scattered showers and storms are expected in West Africa.  Temperatures will average near to above normal.  Malaysia and Indonesia should see scattered showers in all areas.  Temperatures should average near to above normal.  Brazil will get mostly dry conditions or light showers and near to above normal temperatures.  ICE certified stocks are lower today at 5.448 million bags.      

Chart Trends:  Trends in New York are mixed.  Support is at 1940, 1920, and 1890 September, with resistance at 2010, 2040, and 2060 September.  Trends in London are mixed.  Support is at 1510, 1450, and 1430 September, with resistance at 1570, 1600, and 1620 September.

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About the Author

Jack Scoville is a veteran futures market analyst specializing in grains, softs, rice, oilseeds, and tropical products such as coffee and sugar. His industry contacts in South America, Europe, Asia, and North America provide him with a unique and comprehensive view of these markets. Jack began working in the futures industry over 30 years ago and spent 10 years working on the floor of the Chicago Board of Trade in various roles, starting with The PRICE Futures Group since it was established in 1988.