Markets

MORNING SOFTS COMMENTS

COTTON

General Comments: Futures closed higher again yesterday on what appeared to be speculative buying tied to poor weather here in the US. Dry weather in Texas growing areas provided support for new crop Cotton futures as it has become hard to get the Cotton planted. Western Texas, where a large percentage of all US Cotton is grown, has been very dry, and there are no forecasts for much relief, if any, through this weekend. Eastern areas have had some precipitation in the last week or so, but it remains too dry in many growing areas of the Southeast. Delta areas are turning warm ad dry for this week. In fact, most areas look to be hot and sunny this week in the US. World conditions seem better, although drought is a feature in China and parts of Europe. Charts show trends are sideways for the short term in July, but up in new crops months.

Overnight News: The Delta and Southeast will be dry. Temperatures will average above normal. Texas will be mostly dry. Temperatures will average above normal. The USDA average spot price is now 152.19 ct/lb. ICE said that certified Cotton stocks are now 0.194 million bales, from 0.190 million yesterday. USDA swaid that Cotton is now 73% planted, from 77% last year and 76% average.

Chart Trends: Trends in Cotton are mixed. Support is at 150.00, 148.00, and 146.00 May, with resistance of 161.00, 164.00, and 166.00 May.

DJ ICE Cotton Speculation And Hedging Report- May 31

For May 27 long and short positions in contracts.

SPECULATION LONG ACCTS PCT SHORT ACCTS PCT

Total 63,581 1,385 41.3 44,570 1,002 28.9

HEDGING

Total 90,395 312 58.7 109,406 271 71.1

GRAND TOTAL: 153,976 1,697 100.0 153,976 1,273 100.0

FCOJ

General Comments: Futures closed lower yesterday, with most weakness in the front months as traders start to move out of July positions. Futures rallied late last week on forecasts for a more active hurricane season than normal, but had no reaction to forecasts from Brazil calling for a higher than normal possibility of a freeze this year as most production areas would not get hurt. Florida remains mostly warm and dry, with no forecasts for significant rains in sight. Drought still affects a large portion of the citrus producing area, but crops are called in mostly good condition at this time due to irrigation. Fruit is developing and small fruit is visible on the trees. The fruit is called in good condition due to irrigation. Seasonal forecasts call for a more active than normal Atlantic hurricane season. Charts show that the market is trying to decide on the next move.

Overnight News: Florida weather forecasts call for mostly dry conditions, but afternoon showers are possible. Temperatures will average near to above normal.

Chart Trends: Trends in FCOJ are mixed to up with objectives of 192.00 and 201.00 July. Support is at 182.00, 179.00, and 177.00 July, with resistance at 180.00, 188.00, and 191.00 July.

DJ ICE FCOJ Speculation And Hedging Report - May 31

For May 27 long and short positions in contracts.

SPECULATION LONG ACCTS PCT SHORT ACCTS PCT

Total 21,884 588 61.2 7,469 179 20.9

HEDGING

Total 13,870 92 38.8 28,285 91 79.1

GRAND TOTAL: 35,754 680 100.0 35,754 270 100.0

DJ Florida FCOJ Movement And Pack - May 31

In gallons. Source: Florida Department of Citrus (FDOC).

2010-2011

May 21 May 14 Year Ago

MOVEMENT

Retail 136,723 99,710 231,909

Institutional 333,478 374,648 365,720

Bulk 1,824,564 1,918,353 1,506,308

Total 2,294,765 2,392,712 2,103,937

Cumulative 102,058,837 99,764,072 79,193,240

IMPORTS

Foreign 474,328 306,192 285,016

Cumulative 11,811,858 11,337,530 17,994,165

RECEIPTS

Domestic 15,086 7,707 0

PACK

Retail 157,827 145,018 155,722

Institutional 328,583 251,283 349,222

Bulk 4,061,177 3,949,707 4,307,395

Less Reprocessed 2,118,728 1,776,748 2,024,054

Net 2,428,859 2,569,260 2,788,284

Cumulative 71,025,936 68,597,077 74,995,576

Inventory 79,140,597 78,536,928 133,534,646

COFFEE

General Comments: Futures were mixed yesterday. Nearby months had trouble as the ICO announced bigger than expected April exports, but deferred months rallied on wire stories that a higher than normal possibility for a freeze is forecast for Brazil this year. Producers are still not selling much, but there seems to be an uptick in offers now as some producers feel they have missed the market. Fundamentals continue to suggest strong prices overall for the longer term. Talk of lower Mitaca crop production in Colombia after recent big rains and the potential for a freeze in Brazil is offering reasons for speculators to buy. The focus remains on tight supplies now and into next year. Traders generally expect tight supplies to continue through the next crop year due to lower production in Brazil and for high prices to continue as well. Roasters increased retail prices here last week, and there could be some demand loss. Chart show that trends are sideways for the short term.

Overnight News: Certified stocks are lower today and are about 1.664 million bags. The ICO composite price is now 221.98 ct/lb. Brazil should be mostly dry. Temperatures will average near to above normal this week, but near to below normal this weekend. The ICO said that April world exports were 9.7 million bags, from 7.7 million last year. Year to date exports are now 62.7 million bags, from 53.7 million last year. India has exported 181,308 tons of Coffee so far this calendar year, up3% from last year.

Chart Trends: Trends in New York are mixed. Support is at 263.00, 260.00, and 259.00 July, and resistance is at 271.00, 272.00, and 274.00 July. Trends in London are mixed. Support is at 2590, 2570, and 2540 July, and resistance is at 2625, 2640, and 2670 July. Trends in Sao Paulo are mixed. Support is at 325.50, 317.00, and 315.00 September, and resistance is at 340.00, 346.00, and 348.00 September.

SUGAR

General Comments: Futures closed a little higher in New York and in London yesterday, mostly due to a weaker US Dollar. Demand has been increasing and supported some speculative buying last week. Egypt has announced a tender, and Iran is said to have entered the market for White Sugar. Bangladesh is also ready to buy, and northern Africa countries other than Egypt are said to be actively looking for Sugar. The EU will hold tariff free import tenders for much of the Summer due to poor growing conditions there. They are starting with 200,000 tons now. There is also talk of shipping delays from Brazil that could create a short term supply crunch. Bears keep pointing to increased supplies around the world and no demand this year from India as reasons to see futures move lower over time. The harvest conditions seem good at this time in Brazil and also in Thailand, and production ideas in both countries are big. India continues to offer, although in small amounts for now.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal. India issued export permits covering337,047 tons of Sugar. It hopes to capture much of the European demand. Philippines said it could export ore Sugar this year as weather remains good. Russia has set its import duty for July Raw Sugar imports at $85.00 per ton. Russia has produced 1.274 million tons of Sugar from imported Raws so far this calendar year, from 890,800 tons last year.. Thailand plans to sell 122,666 tons of Raw Sugar next week.

Chart Trends: Trends in New York are mixed to up with objectives of 2535 and 2570 July. Support is at 2280, 2260, and 2240 July, and resistance is at 2340, 2350, and 2400 July. Trends in London are up with objectives of 691.00 August. Support is at 663.00, 650.00, and 635.00 August, and resistance is at 679.00, 684.00, and 692.00 August.

COCOA

General Comments: Futures were higher in New York and in London, in part on a weaker US Dollar and in part on some talk of potential diseases in the Americas. Ivory Coast and western African selling pressure remains a feature of the market, but prices have dropped a lot already. There is talk that much of the reaction to the increased flow of Cocoa from Ivory Coast is already part of the market. Ghana is also exporting in a big way and expects to purchase 1.0 million tons from producers this year. It is on track to get to that goal. Overall ideas are that production there and in the rest of West Africa are improved this year due to the good rains and generally favorable weather patterns. The mid crop is supposed to be big this year in all countries in West Africa and will probably get exported quickly now. Trends are mixed for the short term, but still down longer term.

Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average above normal. ICE stocks are lower today and are now about 3.324 million bags.

Chart Trends: Trends in New York are mixed. Support is at 2950, 2900, and 2860 July, with resistance at 3070, 3100, and 3130 July. Trends in London are mixed. Support is at 1810, 1770, and 1740 July, with resistance at 1850, 1860, and 1890 July.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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