COTTON

General Comments:  Futures closed lower on what appeared to be speculative long liquidation that was seen in most commodities futures markets.  Chartists noticed that support held and that the market could turn higher again today, but fundamentalists are not so sure.  They remain concerned about demand, and there has been little or no export demand reported by USDA in recent weeks.  Countries like India are still offering Cotton at prices below those seen in the US, and the government is now allowing unrestricted exports for the next couple of months.  But, supply should become an issue now.  Bad weather in the US is still around, with little rain in the forecast for major growing areas for the next week.  It is very hot in the Cotton areas of Texas.  No relief from the drought appears likely and crop losses in the state should be significant this year, and some traders think a squeeze could form against December futures once the delivery period gets close.

Overnight News:  The Delta and Southeast will be mostly dry or will get a few showers.  Temperatures will average above to much above normal.  Texas will be mostly dry.  Temperatures will average above to much above normal.  The USDA average spot price is now 105.16 ct/lb.  ICE said that certified Cotton stocks are now 0.013 million bales, from 0.013 million yesterday.  USDA said that net Upland Cotton export sales were 8,500 bales this year and 3,100 bales next year.  Net Pima sales were 300 bales this year and 100 bales next year.

Chart Trends:  Trends in Cotton are mixed to up with objectives of 109.00 and 117.00 October.  Support is at 101.00, 100.00, and 99.00 October, with resistance of 110.00, 112.00, and 116.00 October.

FCOJ

General Comments:  Futures closed lower yesterday on what appeared to be speculative long liquidation.  Charts show that trends are mostly sideways for now.  A new tropical system has formed in the Atlantic that should move close to Florida in several days, but current forecasts call for the system to stay mostly east of the state.  For now, the system does not appear strong enough to form a hurricane, but it could bring some strong amounts of rain to Florida depending on the track the storm chooses to follow.  The rains would be mostly beneficial if they get into growing areas.  Florida for now remains mostly warm and is getting scattered showers.  Brazil is also seeing moderate temperatures and episodes of scattered showers for now. 

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

Chart Trends:  Trends in FCOJ are mixed.  Support is at 194.00, 192.00, and 190.00 September, with resistance at 200.00, 202.00, and 205.00 September.

COFFEE 

General Comments:  Futures were lower in all markets yesterday, in part on forecasts for colder but non threatening, weather the rest of the week in Brazil.  Warmer temperatures should return for the weekend.  Traders are looking for reasons to buy and sell, and there are not all that many out there for either side.  Brazil is still shipping coffee, albeit less than in the last few months, but there is not much coming from Central America.  Certified stocks keep dropping, but inventories overall in the US and Europe appear ample.  Weather remains good in Brazil.  Roasters are starting to look for Fall shipments.  Charts show that a low could be forming in New York and that London seems to be developing a short term trading range.

Overnight News:  Certified stocks are lower today and are about 1.529 million bags.  The ICO composite price is now 200.44 ct/lb.  Brazil should see mostly dry weather, but a few showers are possible in the south.  Temperatures will average near to below normal, but warmer this weekend.

Chart Trends:  Trends in New York are mixed.  Support is at 238.00, 233.00, and 230.00 September, and resistance is at 248.00, 253.00, and 256.00 September.  Trends in London are mixed.  Support is at 2060, 2020, and 1985 September, and resistance is at 2150, 2175, and 2200 September.  Trends in Sao Paulo are mixed.  Support is at 309.00, 307.00, and 294.00 September, and resistance is at 326.00, 327.00, and 328.00 September.

SUGAR                                                            

General Comments:  Futures closed lower in New York and in London again yesterday in liquidation trading tied to weak economic data in the US and around the world and demand worries.  Both markets are seeing the fundamental emphasis change a little bit, and this is now being reflected in flat prices and spreads.  Brazil lost Sugar production potential this year due to poor weather, but production in other parts of the world seems strong.  It seems that the weather in Brazil has improved, so most of the crop losses should be known by now.  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.  Demand is said to be falling as buyers are not willing to pay current very high prices.  The ship lineup in Brazil ports has diminished, which is considered an indication of weakening demand. 

Overnight News:  Mostly dry conditions are expected in Brazil.  Temperatures should be near to above normal.  Indonesia said it will not issue more Sugar import permits for this year.  Thailand sold 12,000 tons of Raw Sugar for export overnight.  Thailand estimates 2011 Sugarcane production at about 92 million tons, down 3.5% from 2010. 

Chart Trends:  Trends in New York are down with no objectives.  Support is at 2730, 2700, and 2640 October, and resistance is at 2820, 2910, and 2930 October.  Trends in London are down with no objectives.  Support is at 715.00, 702.00, and 700.00 October, and resistance is at 731.00, 744.00, and 768.00 October.

 

COCOA                                                                 

General Comments:  Futures were lower in New York and a little lower in London on mostly speculative selling against industry scale down buying.  Ideas of good supplies from Western Africa keep the selling pressure around, but the region is now between harvests so offers are less.  Trends are still down overall on the charts.  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. 

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 4.172 million bags.  Brazil arrivals are 83,257 bags this week. 

Chart Trends:  Trends in New York are down with objectives of 2900 and 2830 September.  Support is at 2920, 2880, and 2870 September, with resistance at 2980, 3050, and 3120 September.  Trends in London are down with objectives of 1800and 1760 September.  Support is at 1825, 1790, and 1760 September, with resistance at 1860, 1900, and 1920 September.