Futures closed lower after USDA reported poor export sales. Traders are worried about export demand after the recent rally in prices and the weaker Chinese economic data reported last week.
Cocoa closed lower on follow through speculative selling tied to increasing certified stocks in New York and increased certified stocks. Charts show that trends are down for the short term. Speculators are liquidating longs at this time.
Ivorian port cocoa arrivals have been very strong. Since the main crop harvest began in October, 868,000 tonnes of cocoa beans have been delivered. That compares with just over 600,000 tonnes at this juncture of the marketing year over the past few seasons.
Cotton closed higher on ideas that good demand can continue and on speculation that the USDA will show less production in its annual reports next week. Demand has held together better than expected by many analysts.
A gnat-sized insect, the Asian citrus psyllid, forced Dean Mixon to replace about 1,000 orange trees in the past two years on the 50-acre Florida farm his grandfather started in the 1930s. The bug spreads a disease called citrus greening.
Metal and crop prices are poised to rebound in 2014 as accelerating economic growth boosts demand, helping to staunch this year’s record retreat for investments in commodity-focused funds.
The recent rally in cotton prices has some rationale. There were several bullish developments, two of which involve China. On the supply side, early frost and snow in key growing regions lowered yields.
Last week March 2014 coffee opened at $106.50, and after a rocket ride up on Tuesday closed the week at $115.25. What gave bulls the shot in the arm to do this? News last week was there could be a near-term squeeze in Robusta supply.
Orange juice closed lower as weather in Florida remains very good for the citrus crops. The greening disease has affected crops in a big way and could cause reduced production for the next few years.
Cotton traders were anticipating some beneficial economic news from China, Europe and the U.S. to keep short-term demand ideas intact. Demand has turned softer lately as export sales have decreased, but the better economic news keeps hopes of a rebound alive.