Markets

MORNING SOFTS COMMENTS Jack Scoville

COTTON

General Comments: Futures closed mostly a little lower yesterday before the USDA reports, but July closed higher. Traders are getting ready for the reports from USDA that were released this morning and volumes were very slow. Bad weather in the US remains important, with little rain in the forecast for major growing areas this week. In addition, it has been very hot, with highs of more than 100F or 40C common in the Cotton areas of Texas. The USDA reports showed that the crop continued to deteriorate in the last week, and there is little hope for much improvement this week. Western Texas, where almost half of all US Cotton is grown, should stay dry. Demand remains poor and trends are generally down. India said it is starting to offer Cotton at differentials below the futures of New York for the first time in a couple of years. China cut import duties in a bid to increase supplies in the country over the weekend, and increasing supplies in other countries should keep demand questions in the forefront if prices start to move higher again.

Overnight News: The Delta and Southeast will be mostly dry. 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 134.96 ct/lb. ICE said that certified Cotton stocks are now 0.092 million bales, from 0.087 million yesterday. ICE said that deliveries today were 27 contracts and now total 569 contracts for the month. USDA said that net Upland Cotton export sales were -135,300 bales this year and 35,200 bales next year. Net Pima sales were 3,400 bales this year and 500 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 124.00, 123.00, and 120.00 October, with resistance of 131.00, 132.00, and 135.00 October.

6-30-2011 07:28 U.S. cotton acreage highlights-USDA

WASHINGTON, June 30 (Reuters) - The following are cotton highlights of the

U.S. Agriculture Department's Annual Acreage report estimating plantings and

harvest acres.

The data is based on field surveys taken during early June.

U.S. COTTON CROP

(in million acres)

-------- PLANTED ACRES ---------

USDA USDA

June 30 *Previous Trade Actual

Estimate Estimate Estimate 2010

All Cotton 13.725 12.566 13.260 10.974

06/28 10:50 CDT POLL-US 2011 cotton plantings up from USDA March estimate

NEW YORK, June 28 (Reuters) - Following are the results of

a survey on potential U.S. 2011 cotton plantings, compiled by

Thomson Reuters on Tuesday.

The USDA will release its report on potential plantings on

Thursday at 8:30 a.m. EDT (1230 GMT).

----------------------------------------------------

In million acres

Average trade estimate 13.26

Highest trade estimate 14.21

Lowest trade estimate 12.55

USDA Ag Outlook forecast for cotton 12.60

U.S. 2010 cotton plantings 11.04

Carl Anderson, Texas A&M University 12.70

Sharon Johnson, Penson Futures 12.70

John Flanagan, Flanagan Trading 13.90

Mike Stevens, SFS Futures 13.25

Jobe Moss, MCM Group 13.50

Keith Brown, Keith Brown & Co. 14.21

Jim Nunn, Nunn Cotton Co. 12.55

FCOJ

General Comments: Futures closed lower again yesterday on some selling once again related to good weather in Florida. A system formed in the Gulf of Mexico, but appears weak and destined for southern Mexico. It will help Coffee crops there. Charts show that futures are trying to decide on the next move and could be forming a top. There is not a lot of news to support any big rallies in OJ right now. No tropical storms are in the forecast. Florida remains mostly warm and is getting beneficial showers. 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.

Overnight News: Florida weather forecasts call for scattered showers. Temperatures will average near to above normal.

Chart Trends: Trends in FCOJ are mixed. Support is at 185.00, 183.00, and 180.00 September, with resistance at 190.00, 194.00, and 197.00 September.

COFFEE

General Comments: Futures were higher in New York and Sao Paulo after a surprise frost hit production areas in Parana. It looks like a freeze damaged the Corn crop in many parts of the state, but Coffee was not hurt nearly as much. Loss reports, if any, should surface in a couple of days. Some flowers could also be lost, although trees should be able to form more flowers once the cold air passes through. Another cold shot is possible early next week. London was lower on a lack of buying interest after the big rally the day before. Roasters are said to be well covered for now. Fundamentals continue to suggest strong prices overall for the longer term. The potential for a freeze in Brazil is offering reasons for speculators to buy.

Overnight News: Certified stocks are lower today and are about 1.622 million bags. The ICO composite price is now 216.87 ct/lb. Brazil should see dry weather. Temperatures will average near to above normal this weekend and below normal next week. ICE said that 254 contracts were delivered today and that total deliveries for the month are now 2,426 contracts. Vietnam expects to produce 18.0 million bags of Coffee in 2011-12, from 17.5 million in 2010-11.

Chart Trends: Trends in New York are mixed to up with objectives of 264.00 and 275.00 September. Support is at 252.00, 247.00, and 244.00 September, and resistance is at 263.00, 265.00, and 268.00 September. Trends in London are up with no objectives. Support is at 2440, 2410, and 2370 September, and resistance is at 2520, 2545, and 2560 September. Trends in Sao Paulo are up with objectives of 354.00, 362.00, and 371.00 September. Support is at 327.00, 326.00, and 320.00 September, and resistance is at 337.00, 340.00, and 346.00 September.

SUGAR

General Comments: Futures closed mixed in New York and mostly lower in London yesterday in consolidation trading. The rally early in the week came after UNICA said that the Center-South Sugar crush is 134.6 million tons so far this year, down 23% from last year. The estimate was below trade expectations, and combined with shipping delays created the idea of tight spot supplies in world markets. 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. In fact, India increased exports last week, and prices in Thailand have been moving lower. However, there are shipment delays there as well as in Brazil. The market acts as if prices could move higher on the short term tightness and despite ideas of lower Brazil production despite signs of increased production globally, but then could move lower once the production gets into the market.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should be near to above normal this weekend, then cold again next week. Mexico has produced 5.2 million tons of Sugar so far this year, up 7% from last year.

Chart Trends: Trends in New York are up with objectives of 2800 and 3000 October. Support is at 2630, 2600, and 2560 October, and resistance is at 2730, 2755, and 2800 October. Trends in London are up with objectives of 705.00 and 744.00 October. Support is at 678.00, 666.00, and 662.00 October, and resistance is at 699.00, 712.00, and 720.00 October.

COCOA

General Comments: Futures were sharply higher in New York and in London yesterday as trends turned up on the charts. Speculators were the best buyers, and origin was the best seller, but origin did not sell too much. Ideas are that the market might have made a temporary low in recent days, but for now there is still no real reason to buy except for a temporary shortage as farmers in many countries wait for prices to rally. Fundamentals have not really changed. Ivory Coast and western African selling pressure remains a feature of the market, although there is less selling pressure from there in the last week. 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 up after the price action yesterday.

Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average above normal. ICE stocks are higher today and are now about 3.744 million bags. ICE said that deliveries today are 0 contracts and now total 62 contracts for the month. Brazil Cocoa arrivals are 79,868 bags this week.

Chart Trends: Trends in New York are up with objectives of 3270 and 3470 September. Support is at 3070, 3045, and 3030 September, with resistance at 3080, 3170, and 3190 September. Trends in London are up with no objectives. Support is at 1920, 1860, and 1830 September, with resistance at 2000, 2010, and 2020 September.

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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