COTTON
General Comments: Cotton was slightly higher yesterday The market is still dealing with the potential for less demand from China, but is not real concerned about the potential for lost business. China is a good buyer of US Cotton as it uses the high quality US product to blend with its own production. The US also sells a lot of Cotton to Southeast Asia and some of this makes its way to China in the form of finished products. Ideas are that sales to Southeast Asia could increase if China increases tariffs on US imports as Chinese buyers would turn to these other countries for supplies. US farmers in just about all production areas plan to plant more Cotton. It is drier in the Delta and Texas, and drier weather will be seen in the Southeast. The drier Delta and Southeast weather will be welcome after some big rains in recent days. Warmer temperatures would be beneficial. The Texas Panhandle needs rain badly. Prices overall have been much higher than most commercials had expected, but the recent carry spread weakness could be a sign that merchants have been able to get covered in the last couple of weeks. Prices could remain strong until closer to harvest, but there is a chance that the highs have been seen.
Overnight News: The Delta and the Southeast will get drier weather this week and big rains this weekend. Temperatures should be mostly near to above normal. Texas will see mostly cry conditions. Temperatures will be warm today and tomorrow, then near to below normal. The USDA average price is now 80.06 ct/lb. ICE said that certified stocks are now 73,084 bales, from 77,823 bales yesterday. USDA said that net Upland Cotton export sales were 179,400 bales this year and 28,700 bales next year. Net Pima sales were 900 bales this year and 200 bales next year.
Chart Trends: Trends in Cotton are mixed. Support is at 8230, 8070, and 7860 May, with resistance of 8410, 8550, and 8660 May.
DJ West Africa Cotton Output Trends Higher as Rains Boost Yields: USDA Bureau — Market Talk
0846 GMT – West Africa’s cotton production will likely climb 4% this season, aided by favorable rainy weather, improving global prices and better pest management, says the U.S. Department of Agriculture’s bureau in Senegal. Output from main growers Burkina Faso, Chad, Mali and Senegal is projected to hit 2.86 million tons in 2018/2019, defying shrinking farmlands. Total cotton exports will likely rise 3% on higher “exportable supplies and strong international demand,” the bureau says, highlighting the continued recovery of a region that was battered by an el Nino-fueled drought two years ago. West Africa growers export the fiber mainly to Asian markets. (nicholas.bariyo@wsj.com; @Nicholasbariyo)
FCOJ
General Comments: FCOJ was a little higher in quiet trading. The market is in a trading range and could be forming a low. USDA left its Florida oranges production estimates unchanged on Tuesday as had been expected. The market is still dealing with a short crop against weak demand. The current weather is good as temperatures are warm and it is mostly dry, but some big rains are reported in northern parts of the state. The harvest is progressing well and fruit is being delivered to processors. Producers are now into the Valencia crop with the early and mid harvest completed. Florida producers are actively harvesting and performing maintenance on land and trees. Flowering is mostly over, and fruit is forming and starting to develop. Irrigation is being used.
Overnight News: Florida should get mostly dry weather this week. Temperatures will average near to above normal. Brazil should get mostly dry weather and near to above normal temperatures. The best precipitation should be this weekend.
Chart Trends: Trends in FCOJ are mixed. Support is at 136.00, 135.00, and 134.00 May, with resistance at 140.00, 142.00, and 143.00 May.
COFFEE
General Comments Futures in New York were a little higher in quiet trading, with the buying apparently related to the weaker US Dollar. London was a little higher. Trends are still sideways to down on the charts, but the bear side of the market might be about sold out. Funds and other speculators were net sellers and industry is the best buyer. Origin is still offering in Central America and is still finding weak differentials. Good business is getting done and exports are active. Traders anticipate big crops from Brazil and from Vietnam this year and have remained short in the market. New York traders are talking about good weather currently being reported in Brazil and expect another bumper crop. Robusta remains the stronger market as Vietnamese producers and merchants are not willing to sell at current prices and are willing to wait for a rally. Vietnamese cash prices were steady last week.
Overnight News: Certified stocks are slightly lower today and are about 1.953 million bags. The ICO composite price is now 112.75 ct/lb. Brazil will get drier conditions. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get isolated showers or dry conditions. Vietnam will get showers in the north starting tomorrow.
Chart Trends: Trends in New York are mixed. Support is at 116.00, 113.00, and 110.00 May, and resistance is at 121.00, 122.00 and 124.00 May. Trends in London are mixed. Support is at 1700, 1670, and 1640 May, and resistance is at 1730, 1760, and 1780 May.
SUGAR
General Comments: Futures were lower in both New York and London, but both markets held the lows from Tuesday. Trends are down in both markets. The fundamentals remain little changed, and there does not seem to be much for now that can shake the market out of its current trend. UNICA showed a big production increase for Brazil on Monday, and this was the reason for the big selling on Tuesday. Traders hear about big production from the world producers and little in the way of special demand that could absorb some of the surplus. Ideas that Sugar supplies available to the market can increase in the short-term have been key to any selling. India will export Sugar this year after being a net importer for the last couple of years. Thailand has produced a record crop and is selling. Mills in Brazil have decided to make more Ethanol as world Crude Oil and products prices have been very strong. Brazil still has plenty of Sugar to sell even with the different refining mix.
Overnight News: Brazil will get dry weather. Temperatures should be near to above normal.
Chart Trends: Trends in New York are down with objectives of 1180 and 1120 July. Support is at 1200, 1170, and 1140 July, and resistance is at 1240, 1270, and 1280 July. Trends in London are down with objectives of 332.00 and 328.00 August. Support is at 331.00, 328.00, and 325.00 August, and resistance is at 342.00, 346.00, and 348.00 August.
COCOA
General Comments Futures were higher and remain in a trading range. The market is starting to look ahead at the next round of quarterly grind reports. The reports should show a slight increase in demand for Cocoa beans for processing. Grinders are making good money in the processing right now and will be looking for any beans they can find. For example, Callebrut in Europe reported stronger earnings this week amid improved demand for products. Ideas of smaller world production that has been largely sold remain part of the rally. Showers and more seasonal temperatures have been seen in the last few weeks to improve overall production conditions in West Africa. The mid crop harvest is starting, and wire reports indicate that some initial mid crop harvest is underway in Nigeria. No yield reports have been seen yet, but estimates from the country imply that variable yields can be expected. The harvest should begin soon in Ivory Coast and Ghana.
Overnight News: Scattered showers are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get cry conditions and near to above normal temperatures. ICE certified stocks are higher today at 5.029 million bags.
Chart Trends: Trends in New York are mixed to up with objectives of 2610, 2720, and 2780 May. Support is at 2500, 2430, and 2400 May, with resistance at 2560, 2600, and 2640 May. Trends in London are mixed to up with objectives of 1830, 1880, and 1890 May. Support is at 1700, 1670, and 1650 May, with resistance at 1750, 1800, and 1830 May.