COTTON

General Comments:  Futures closed lower on what appeared to be speculative long liquidation that was seen in most commodities futures markets as the financial markets remained in turmoil.  The cut in the US debt ratings by S&P triggered a massive liquidation trade in stocks and this selling spilled over to commodities.  Chart trends began to turn down yesterday.  Demand remains soft, but USDA should show a sharp reduction in production potential in its first estimates on Thursday morning.  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.  Bad weather in the US is still around, with little rain in the forecast for major Texas 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.

Overnight News:  The Delta and Southeast will be mostly dry or will get 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 99.58 ct/lb.  ICE said that certified Cotton stocks are now 0.014 million bales, from 0.014 million yesterday.

Chart Trends:  Trends in Cotton are mixed to down with objectives of 93.00 and 84.00 October.  Support is at 99.00, 95.00, and 94.00 October, with resistance of 100.00, 101.00, and 104.00 October.

U.S. Weekly Crop Progress Highlights - USDA
WASHINGTON, Aug. 08 (Reuters) - Highlights of the U.S. Agriculture
Department's weekly crop progress report (all numbers expressed in percent):
 Week ended                    08/07/11  07/31/11  08/07/10   5-year
    COTTON CONDITION
  - Excellent                      5         5        18       N/A
  - Good                          25        25        47       N/A
  - Fair                          29        30        25       N/A
  - Poor                          19        18         8       N/A
  - Very Poor                     22        22         2       N/A
    COTTON SQUARING               95        90        98        96
    COTTON SETTING BOLLS          79        62        82        74
    COTTON BOLLS OPEN              9        NA         8         8
DJ ICE Cotton Speculation And Hedging Report - Aug 8
     For Aug 5 long and short positions in contracts.
SPECULATION      LONG   ACCTS     PCT   SHORT   ACCTS     PCT
  Total        58,534   1,103    40.8  42,160   1,123    29.4
HEDGING
  Total        84,955     276    59.2 101,329     267    70.6 
GRAND TOTAL:  143,489   1,379   100.0 143,489   1,390   100.0

FCOJ

General Comments:  Futures closed sharply lower yesterday on what appeared to be speculative long liquidation tied to the disintegration of Tropical Storm Emily on one side and the meltdown in world equities markets on the other.  The system did help bring some rains to southeast areas, but that is about it and is now out to sea.  There are no other tropical threats to Oranges production for now.  Charts show that trends are down for now.  Florida for now remains mostly warm and is getting scattered showers.  Brazil is also seeing moderate temperatures and episodes of scattered showers for now.  Charts show that the three day move lower has been extreme and that a rebound is possible at any time. 

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

Chart Trends:  Trends in FCOJ are down with no objectives.  Support is at 170.00, 168.00, and 166.00 September, with resistance at 175.00, 177.00, and 180.00 September.

DJ Florida FCOJ Movement And Pack - Aug 8
   In gallons. Source: Florida Department of Citrus (FDOC). 
                               2010-2011
                         Jul 30        Jul 23      Year Ago
  MOVEMENT
Retail                  175,660       134,389       240,373
Institutional           362,834       345,573       436,146
Bulk                  1,478,407     1,489,298     1,927,492
Total                 2,016,901     1,969,261     2,604,011
Cumulative          129,330,336   127,313,435   107,672,147
  IMPORTS
Foreign                  68,522       100,668        62,580
Cumulative           14,498,351    14,429,829    20,322,238
  RECEIPTS
Domestic                 17,728        97,449        53,258
  PACK
Retail                  181,749       159,722       171,552
Institutional           413,645       416,062       357,562
Bulk                    558,021       622,940       637,567
Less Reprocessed      1,153,415     1,198,724     1,166,681
Net                           0             0             0
Cumulative           82,091,651    82,091,651    82,252,237
Inventory            66,847,441    68,801,692   115,694,484
DJ ICE FCOJ Speculation And Hedging Report - Aug 8
     For Aug 5 long and short positions in contracts.
SPECULATION     LONG   ACCTS     PCT   SHORT   ACCTS     PCT
  Total       20,498     453    60.5   7,114     199    21.0
HEDGING
  Total       13,369      91    39.5  26,753      76    79.0 
GRAND TOTAL:  33,867     544   100.0  33,867     275   100.0

COFFEE 

General Comments:  Futures were lower yesterday as reports from Brazil continued to indicate little damage after a surprise frost late last week and on the massive selling seen in world financial markets after S&P lowered the grade of the US long term debt.  Weather in Brazil is not a problem right now.  Warmer temperatures should return for much of the week, but it could turn cold again at the e4nd of the week, although not cold enough to freeze.  Brazil is still shipping coffee, albeit less than in the last few months, but there is not much coming from Central America except for some final shipments.  Certified stocks keep dropping, but inventories overall in the US and Europe are good.  Weather remains good in Brazil.  Roasters are starting to look for Fall shipments.  Charts show that trends turned down again yesterday.

Overnight News:  Certified stocks are a little lower today and are about 1.524 million bags.  The ICO composite price is now 195.96 ct/lb.  Brazil should see mostly dry weather, but a few showers are possible in the south.  Temperatures will average near to above normal this week, but cooler this weekend.

Chart Trends:  Trends in New York are mixed to down with objectives of 232.00 and 223.00 September.  Support is at 232.00, 230.00, and 229.00 September, and resistance is at 238.00, 240.00, and 246.00 September.  Trends in London are mixed to down with no objectives.  Support is at 2020, 1985, and 1980 September, and resistance is at 2080, 2110, and 2150 September.  Trends in Sao Paulo are mixed to down with objectives of 304.00 and 270.00 September.  Support is at 309.00, 307.00, and 294.00 September, and resistance is at 317.00, 323.00, and 326.00 September.

SUGAR                                                            

General Comments:  Futures closed lower in New York and in London yesterday in liquidation trading tied to news that S&P had downgraded the US debt and demand worries.  Fundamentals still seem to be more negative than just a few months ago.  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.  Thai export sources are telling wire services that export premiums have already fallen quite a bit in the last few weeks and should fall more as supplies increase in Asia. 

Overnight News:  Mostly dry conditions are expected in Brazil.  Temperatures should be near to above normal.  China produced 33,000 tons of Refined Sugar in July, more than triple the production in July of 2010.  Calendar year to date production is 8.57 million tons, up 9.2% from last year.

Chart Trends:  Trends in New York are down with no objectives.  Support is at 2640, 2600, and 2550 October, and resistance is at 2730, 2820, and 2910 October.  Trends in London are down with objectives of 703.00 October.  Support is at 702.00, 700.00, and 678.00 October, and resistance is at 715.00, 731.00, and 738.00 October.

 

COCOA                                                                 

General Comments:  Futures were lower in New York and in London on the US debt downgrade by S&P.  However, Cocoa fell less than some of the other markets as futures have already fallen quite a bit since the end of the war and the elections.  Spreads between September and December were noted as positions get rolled forward.  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 4.143 million bags.  Ivory Coast export declarations are now 1.230 million tons this year, up 29.6% from last year. 

Chart Trends:  Trends in New York are mixed.  Support is at 2880, 2870, and 2810 September, with resistance at 2980, 3005, and 3050 September.  Trends in London are mixed.  Support is at 1825, 1790, and 1760 September, with resistance at 1860, 1900, and 1920 September.