COTTON

General Comments:  Futures closed lower on what appeared to be speculative long liquidation caused by ideas of weaker demand as the financial markets remained in turmoil.  Cotton did not participate in the rally seen in equities markets and in other agricultural markets as world economies remain weak.  Chart trends began to turn down this week.  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.  It should be dry on Sunday.  Temperatures will average near to above normal.  Texas will be mostly dry.  Temperatures will average above to much above normal.  The USDA average spot price is now 97.83 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 95.00, 94.00, and 90.00 October, with resistance of 100.00, 101.00, and 104.00 October.

FCOJ

General Comments:  Futures closed lower yesterday on what appeared to be follow through speculative long liquidation tied to the lack of any threatening weather in Florida on one side and the meltdown in world equities markets on the other.  Charts show that trends are down for now, but futures appear very oversold.  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 168.00, 166.00, and 163.00 September, with resistance at 175.00, 177.00, and 180.00 September.

COFFEE 

General Comments:  Futures were higher yesterday on buying seen in world financial markets.  The world equities markets improved after the close of Coffee3, so more gains are possible today.  Weather in Brazil is good.  Warmer temperatures are expected for much of the week, but it could turn cold again at the end 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.  Roasters are starting to look for Fall shipments.  Charts show that trends turned down again this week, but prices remain very close to objectives for the move.

Overnight News:  Certified stocks are sharply lower today and are about 1.497 million bags.  The ICO composite price is now 197.03 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.  Mexico exported 256,828 bags of Coffee in July and has now exported 2.3 million bags for the marketing year.

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.  Support is at 2065, 2035, and 2020 September, and resistance is at 2110, 2150, and 2175 September.  Trends in Sao Paulo are down with objectives of 304.00 and 270.00 September.  Support is at 307.00, 294.00, and 293.00 September, and resistance is at 312.00, 313.00, and 317.00 September.

SUGAR                                                            

General Comments:  Futures closed mostly higher in New York and higher in London yesterday in recovery trading as world equity markets moved higher.  Equity markets continued to rally after the FED announcement, and this implies that Sugar futures can rally more today.  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. 

Chart Trends:  Trends in New York are mixed.  Support is at 2730, 2700, and 2640 October, and resistance is at 2820, 2835, and 2910 October.  Trends in London are mixed.  Support is at 728.00, 715.00, and 702.00 October, and resistance is at 744.00, 748.00, and 768.00 October.

 

COCOA                                                                 

General Comments:  Futures were lower in New York and higher in London in consolidation trading.  Cocoa is trying to find a bottom 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 4.130 million bags. 

Chart Trends:  Trends in New York are mixed.  Support is at 2880, 2870, and 2810 September, with resistance at 2955, 2980, and 3005 September.  Trends in London are mixed.  Support is at 1825, 1790, and 1760 September, with resistance at 1900, 1920, and 1960 September.