COTTON

General Comments:  Futures closed higher as traders anticipated bullish production data from USDA today.  Traders anticipated product ion near 15.29 million bales.  The financial markets remained in turmoil and this kept buying and selling interest thin.  Chart trends began to turn down this week and still show a negative bias.  Demand remains soft and what USDA shows for the coming year will be a factor in trading ideas today.  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 99.76 ct/lb.  ICE said that certified Cotton stocks are now 0.014 million bales, from 0.014 million yesterday.   USDA said that net Upland Cotton  export sales were -5,600 bales this year2,000 bales next year.  Net Pima sales were 0 bales this year and next year.

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.

8-11-2011 07:30 August 11 U.S. cotton highlights - USDA
    August 11 (Reuters) - The U.S. Agriculture Department issued the following
key U.S. crop information on cotton in its monthly  world supply-and-demand
report.
    The data includes last month's forecast for comparison.
                                     COTTON
                              (mln 480 pounds/bales)
                        2009/10  2010/11  2011/12 Projections
                         Actual  Estimate July       Aug
Planted (mln acre)        9.15   10.97    13.73    13.73
Harvested (mln acre)      7.53   10.70     9.60     9.67
Yield/acre                 777     812      800      822
Production               12.19   18.10    16.00    16.55
Exports                  12.04   14.40    12.00    12.30
Ending stocks             2.95    2.85     3.00     3.30
DJ USDA Cotton Ginnings Report==Aug 11 
                   Running Bales Ginned by Crop, States and US,
                              August 1, 2008-2011
(Excluding linters)
============================================================================
Crop and State                    Running Bales ginned
             ==============================================================-
               2008 Crop       2009 Crop       2010 Crop        2011 Crop
             ==============================================================-
             August 1, 2008  August 1, 2009  August 1, 2010   August 1, 2011
============================================================================
                                         Number
All cotton
TX               13,050          5,150             1/            202,750
US               13,050          5,150             1/            202,750
American Pima
TX                    -              -              -                  - 
US                    -              -              -                  -
============================================================================
-  Represents zero.
1/ Withheld to avoid disclosing data for individual gins.

FCOJ

General Comments:  Futures closed sharply lower one more time 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 157.00, 154.00, and 151.00 September, with resistance at 163.00, 166.00, and 169.00 September.

COFFEE 

General Comments:  Futures were mixed yesterday as traders wrestled with all of the turmoil seen in world financial markets.  No one knows if it is better to buy or sell, so most are just getting out of positions..  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.  The New York charts show a potential bear flag in formation.

Overnight News:  Certified stocks are a little higher today and are about 1.499 million bags.  The ICO composite price is now 197.78 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.  Support is at 2110, 2080, and 2065 September, and resistance is at 2150, 2175, and 2200 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 313.00, 317.00, and 323.00 September.

SUGAR                                                            

General Comments:  Futures closed mostly a little higher in New York and lower in London yesterday as world equity markets moved much lower.  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.  India is considering an industry request to permit another 500,000 tons of Sugar exports. 

Chart Trends:  Trends in New York are mixed.  Support is at 2730, 2700, and 2680 October, and resistance is at 2820, 2835, and 2910 October.  Trends in London are mixed.  Support is at 715.00, 702.00, and 700.00 October, and resistance is at 744.00, 748.00, and 768.00 October.

 

DJ USDA Supply/Demand: US Sugar-Aug 11 
                       U.S. Sugar Supply and Use 1/ 
===================================================================== 
        Item                        2009/2010             2010/2011 
                             prev        Aug 11      prev      Aug 11 
===================================================================== 
                                 1,000 short tons, raw value 
Beginning stocks            1,510        1,498      1,527      1,785 
Production 2/               7,946        7,946      8,190      8,110 
  Beet sugar                4,800        4,800      4,800      4,750 
  Cane sugar                3,146        3,146      3,390      3,360 
    Florida                 1,433        1,433      1,630      1,630 
    Hawaii                    170          170        170        170 
    Lousiana                1,400        1,400      1,440      1,400 
    Texas                     143          143        150        160 
Imports                     3,556        3,826      3,072      2,962 
  TRQ 3/                    1,832        1,882      1,259      1,384 
  Other program 4/            300          300        350        350 
  Other 5/                  1,424        1,644      1,463      1,228 
   Mexico                   1,404        1,624      1,453      1,218 
    Total supply           13,012       13,270     12,789     12,857 
Exports                       250          250        200        200 
Deliveries                 11,235       11,235     11,315     11,315 
  Food                     11,000       11,000     11,125     11,125 
  Other 6/                    235          235        190        190 
Miscellaneous 7/                0            0          0          0 
     Total use             11,485       11,485     11,515     11,515 
Ending stocks               1,527        1,785      1,274      1,342 
Stocks to use ratio          10.4         15.5       11.1       11.7 
===================================================================== 
 

COCOA                                                                 

General Comments:  Futures were lower in New York and higher in London in liquidation 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 before September deliveries start next week.  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.  Ideas are that current weather patterns in Africa are not good and that production in western Africa can drop next year. 

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 4.109 million bags.  Brazil Cocoa arrivals are 83,467 bags this week. 

Chart Trends:  Trends in New York are down with objectives of 2830, 2770, and 2640 September.  Support is at 2810, 2800, and 2730 September, with resistance at 2870, 2880, and 2920 September.  Trends in London are mixed.  Support is at 1825, 1790, and 1760 September, with resistance at 1900, 1920, and 1960 September.