Monday, July 8, 2013

Cotton works higher but demand turning soft

By Jack Scoville

COTTON (NYBOT:CTV13)

General Comments: Futures were higher on follow-through buying. It was a low volume session with the holiday yesterday, and today could be a low volume session as well. Futures held the short term range. It is possible that futures can work lower again as demand has turned soft. Ideas of better production conditions in the U.S. caused some selling interest. Texas is reporting light precipitation, mostly in southern areas. Dry weather is being reported in the Delta and showers and storms are seen in the Southeast. The weather should help support crop development in the Delta and Southeast, and could help in Texas. Weather for Cotton appears good in India, Pakistan, and China.

Overnight News: The Delta should be dry and Southeast will see showers and rains. Temperatures will average near to above normal. Texas will be mostly dry. Temperatures will average above normal. The USDA spot price is now 82.78 ct/lb. ICE said that certified Cotton stocks are now 0.602 million bales, from 0.597 million yesterday. ICE said that 53 notices were posted today and that total deliveries are now 2,515 contracts.

Chart Trends: Trends in Cotton are mixed . Support is at 86.20, 85.20, and 84.00 October, with resistance of 88.00, 88.20, and 89.70 October.

FCOJ (NYBOT:OJU13)

General Comments: Futures closed higher for one more day. There has been little selling pressure on the market since the dramatic move lower, but some may develop son as futures are closer to resistance areas. Better weather in Florida seems to be the big problem for the bulls at this time. Showers are reported and conditions are said to have improved in almost the entire state. Ideas are that the better precipitation will help trees fight the greening disease. No tropical storms are in view to cause any potential damage. Greening disease and what it might mean to production prospects continues to be a primary support item and will be for several years. Temperatures are warm in the state, but there are showers reported. Brazil is seeing near to above normal temperatures and mostly dry weather, but showers are possible later this week.

Overnight News: Florida weather forecasts call for showers. Temperatures will average near to above normal. ICE said that 0 delivery notices were posted today and that total deliveries for the month are now 0 contracts.

Chart Trends: Trends in FCOJ are mixed. Support is at 130.00, 125.00, and 122.50 September, with resistance at 135.00, 138.00, and 139.00 September.

COFFEE (NYBOT:KCU13)

General Comments: Futures were lower on a weaker Brazilian Real, but held relatively well because of almost nonexistent offers from origin. The cash market remains very quiet. Sellers, including Brazil, are quiet and are waiting for futures to move higher. Buyers are interested on cheap differentials, and cheap futures. Brazil weather is forecast to show dry conditions, but no cold weather. Current crop development is still good this year. Central America crops are seeing good rains now. Colombia is reported to have good conditions. Robusta prices are holding stronger as the Vietnamese export pace has really dropped. Producers are said to have sold to exporters already, and exporters sold a bit in the last couple of weeks with losses.

Overnight News: Certified stocks are a little lower today and are about 2.744 million bags. The ICO composite price is now 116.50 ct/lb. Brazil should get dry weather except for some showers in the northeast. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get showers, and rains. Temperatures should average near to above normal. ICE said that 1 delivery notice was posted against July today and that total deliveries for the month are now 810 contracts.

Chart Trends: Trends in New York are mixed. Support is at 120.00, 117.00, and 116.00 September, and resistance is at 123.00, 125.00, and 126.00 September. Trends in London are mixed to up with objectives of 1835 and 1900 September. Support is at 1790, 1755, and 1720 September, and resistance is at 1825, 1855, and 1870 September. Trends in Sao Paulo are mixed to down with no objectives. Support is at 140.00, 137.00, and 134.00 September, and resistance is at 150.00, 151.00, and 155.00 September.

SUGAR (NYBOT:SBV13)

General Comments: Futures closed lower on a weaker Brazilian Real on Friday. Ideas are that mills had not had time to produce more Sugar due to a delayed harvest in Brazil because of rains and also because they are concentrating on producing ethanol. However, the data from Brazil last week showed that there was plenty of Sugar around, anyway. Futures might try to work lower again this week as trends have turned down again and new contract lows were made. There is still a lot of Sugar around, and not only from Brazil. The Indian monsoon is off to a good start and this should help with Sugarcane production in the country. But, everyone is more interested in Brazil and what the Sugar market is doing there. Traders remain bearish on ideas of big supplies, especially from Brazil. Traders in Brazil expect big production to continue as the weather is good.

Overnight News: Showers are expected in Brazil, mostly in the south and southwest. Temperatures should average near to above normal.

Chart Trends: Trends in New York are down with objectives of 1580 October. Support is at 1620, 1600, and 1570 October, and resistance is at 1650, 1665, and 1690 October. Trends in London are mixed to down with objectives of 465.00 and 448.00 October. Support is at 470.00, 466.00, and 463.00 October, and resistance is at 480.00, 485.00, and 490.00 October.

COCOA (NYBOT:CCU13)

General Comments: Futures closed lower on ideas of good harvest weather and active movement of beans to ports in western Africa. Internal prices are reported weak in much of Africa on ideas of weak demand. The weather is good in West Africa, with more moderate temperatures and some rains. Some showers are appearing again in Ivory Coast this week, and the rest of the region is in good condition. Ivory Coast will need more rain soon. The mid-crop harvest is about over, and less than expected production along with smaller beans is reported. Malaysia and Indonesia crops appear to be in good condition and weather is called favorable.

Overnight News: Scattered showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see episodes of isolated showers. Temperatures should average near normal. Brazil will get mostly dry conditions and warm temperatures. ICE certified stocks are lower today at 4.873 million bags. ICE said that 0 delivery notices were posted today and that total deliveries for the month are 372 contracts.

Chart Trends: Trends in New York are up with objectives of 2260 September. Support is at 2170, 2130, and 2100 September, with resistance at 2250, 2280, and 2300 September. Trends in London are mixed. Support is at 1510, 1500, and 1460 September, with resistance at 1550, 1560, and 1600 September.

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