Markets

MORNING SOFTS COMMENTS Jack Scoville

COTTON

General Comments: Futures closed sharply lower on fund selling tied to European economic problems and fund selling seen across most commodities. July held better than new crop months. Ideas are that few deliveries can be made as the supplies are not available. Wire reports that Texas dryland farmers are on the verge of declaring crops as disasters added some support. Dry weather in Texas growing areas provided support for new crop Cotton futures. Western Texas, where almost half of all US Cotton is grown, has been very dry, and there are no forecasts for much relief, if any, into next week. Eastern areas have had some precipitation in the last week or so, but it remains too dry in many growing areas of the Southeast, especially in Georgia. Delta areas are warm and dry. Demand remains poor.

Overnight News: The Delta and Southeast will be dry or will see a few showers. Temperatures will average above normal. Texas will be mostly dry. Temperatures will average above to much above normal. The USDA average spot price is now 151.47 ct/lb. ICE said that certified Cotton stocks are now 0.058 million bales, from 0.057 million yesterday. USDA said that net Upland Cotton export sales were 10,200 bales this year and 37,400 bales next year. Net Pima sales were 100 bales this year and 1,800 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 148.00, 146.00, and 143.00 May, with resistance of 157.00, 159.00, and 161.00 May.

FCOJ

General Comments: Futures closed lower yesterday in range trading. The selling yesterday seemed tied more to selling seen in all commodities due to European economic problems rather than anything that had to do with OJ. No tropical storms are in the forecast. 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. Support is at 181.00, 179.00, and 177.00 July, with resistance at 186.00, 187.00, and 188.00 July.

COFFEE

General Comments: Futures were lower in New York, but higher in London. New York felt the general commodities selling seen in most markets in response the the economic problems in Europe, but London held on some short covering. 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. Roasters are said to be well covered for now. Fundamentals continue to suggest strong prices overall for the longer term. Lower Mitaca crop production in Colombia and the potential for a freeze in Brazil is offering reasons for speculators to buy. 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. But, the ICO showed that supplies might not be so tight in the coming year. Chart show that trends remain mixed for now. But, overall it seems that futures want to work higher.

Overnight News: Certified stocks are a little lower today and are about 1.670 million bags. The ICO composite price is now 218.66 ct/lb. Brazil should see scattered showers this week and dry weather this weekend. Temperatures will average near to below normal. GCA stocks are now 4.426 million bags, from 4.351 million at the end of April. EU stocks are now 11.46 million bags, up 392,988 bags from the end of March. Japan stocks are now 125,958 tons, up about 13% from the previous quarter.

Chart Trends: Trends in New York are mixed. Support is at 260.00, 259.00, and 257.00 July, and resistance is at 265.00, 270.00, and 274.00 July. Trends in London are down with objectives of 2320, 2220, and 2200 July. Support is at 2340, 2280, and 2225 July, and resistance is at 2410, 2440, and 2470 July. Trends in Sao Paulo are mixed to up with objectives of 354.00, 371.00, and 408.00 September. Support is at 340.00, 337.00, and 327.00 September, and resistance is at 352.00, 359.00, and 369.00 September.

SUGAR

General Comments: Futures closed lower in New York and higher in London. New York was lower along with most other markets as funds sold almost everywhere, but talk of shipping delays and demand for White Sugar kept prices firm there. Ideas of slow processing and shipping delays had supported prices. Yields were down sharply from last year, so total Sugar production might not be all that strong. Some buying was noted on ideas that the weather in Brazil is not getting better. Demand has been increasing as many Middle Eastern countries get ready for Ramadan. 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. Trends remain up, but it is possible that this part of the up move is running out of steam.

Overnight News: Mostly dry conditions are expected in Brazil this weekend, but showers are likely the rest of the week. Temperatures should be near to above normal. Russia Sugar production from imported Raws is now 1.56 million tons, from 1.241 million tons last year.

Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2470, 2430, and 2400 July, and resistance is at 2550, 2590, and 2600 July. Trends in London are mixed. Support is at 692.00, 689.00, and 684.00 August, and resistance is at 718.00, 719.00, and 729.00 August.

COCOA

General Comments: Futures were lower in New York and in London yesterday despite increasing concerns about crop quality in Western Africa. In addition, recent wire service reports have noted that many Ivory Coast farmers refuse to return ho9me, so supplies from there might be smaller than originally thought at the beginning of the market year due to labor problems. Ideas are that the market might have made a temporary low, but for now there is no real reason to buy. Fundamentals have not really changed. Ivory Coast and western African selling pressure remains a feature of the market. 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.

Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average above normal. ICE stocks are a little lower today and are now about 3.334 million bags. Brazil Cocoa arrivals are 91,062 bags this week.

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 1860, 1890, and 1930 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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