Morning Softs 10/23/12

COTTON
General Comments: Futures were near unchanged in consolidation trading. It looks like traders are waiting to see what the FED and other central banks have to say this week. Support is coming from the Chinese demand that so far this year has been 42% more than last year. The harvest continues and harvest progress keeps many would be bulls on the sidelines. Many remain bearish the market overall as more supplies should appear as the harvest moves forward. Others look at world supplies and many think China will import less this year due in part to economic issues there. Traders are watching India and Pakistan where the monsoon has improved, with beneficial rains noted in production areas of both countries. India is now talking about good production, but some wire reports indicate that flooding rains hurt production in Pakistan. Drier weather this week will help crops in northern India and Pakistan, while some precipitation in southern India will help crops there. Drier weather continues in China and will help harvest there. Harvest is moving along in the US, but not as fast as the harvest progress seen in the grains. Weather in the US remains favorable for rapid harvest progress in most areas, and crops are reported in good condition.
Overnight News: The Delta and Southeast should see mostly dry conditions this week and some showers this weekend. Temperatures will average above normal, but will turn cooler late in the week. Texas will get dry weather except for a shower or two on Friday. Temperatures will average above normal most of the week, but below normal starting Friday. The USDA spot price is now 71.95 ct/lb. ICE said that certified Cotton stocks are now 0.008 million bales, from 0.008 million yesterday.
Chart Trends: Trends in Cotton are mixed to up with no objectives. Support is at 76.40, 75.10, and 74.10 December, with resistance of 77.90, 78.50, and 79.10 December.

USDA Crop Progress and Condition Reports for October 22,2012 in Percent

Crop Progress This Week Last Week Last Year Average
Cotton Bolls Opening 94 91 95 92
Cotton Harvested 38 28 44 39
Corn Harvested 79 69 42 38
Condition Very Poor Poor Fair Good Excellent
Cotton This Week 13 18 27 31 11
Cotton Last Week 12 18 28 31 11
Cotton Last Year 25 19 27 24 5

FCOJ
General Comments: Futures closed lower on US Dollar strength and good growing conditions in Florida and Brazil. Ideas still are that Florida crops look good right now. Chart trends are mostly sideways. The Atlantic hurricane season is almost over and some speculators are liquidating long positions because of this. There is one last system forming that could brush the state at the end of the week. The next major weather event for Florida will be the freeze season which is still a couple of months away. Florida weather has been generally good for production, with showers and moderate temperatures. Demand for domestically produced Juice remains down from last year. Brazil is seeing warm temperatures, and flowering should get started after some precipitation last week. Warm and dry weather could increase stress over the next week.
Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average near to above normal.
Chart Trends: Trends in FCOJ are mixed. Support is at 109.00, 105.00, and 102.00 November, with resistance at 118.00, 120.00, and 124.00 November.

Frozen Fruit and Frozen Juice in Cold Storage – United States: September 30, 2012 with Comparisons
————————————————————————————————————–
: : September 30, 2012 :
: Stocks in all warehouses : as a percent of :
: : :
Commodity :———————————————————————– :September 30,: August 31, :September 30,:September 30,: August 31,
: 2011 : 2012 : 2012 : 2011 : 2012 :
————————————————————————————————————–
: ———— 1,000 pounds ———– —- percent —- Frozen juice concentrate :
Orange ………………………….: 588,911 773,642 675,531 115 87
(Gallon equivalent) …………….: 59,510 78,177 68,263
Other …………………………..: 295,477 294,670 306,563 104 104

COFFEE
General Comments: Futures were higher on what seemed to be mostly speculative short covering. Funds had sold the market in a big way in the last couple of weeks and started to make these positions a little smaller yesterday. Traders remain afraid of a big increase in offers from Brazil as flowering is off to a good start and as countries further north are about ready to harvest. Producer offers remain light in all of Latin America, including Brazil, as they wait for higher prices. Demand from roasters also appears light as they appear to have good coverage already. Brazilian offers remain light as they wait for higher prices and live off of government subsidies. Farmers there are not offering much. Central America crops are getting harvested or will get harvested soon. There are widespread reports of rust on the trees and leaves, and Roya has become a bit issue as well. It is possible that many Central America producers will harvest much less Coffee next year if they are affected by these problems. Colombia also is reported to have good rains and good conditions right now.
Overnight News: Certified stocks are higher today and are about 2.351 million bags. The ICO composite price is now 146.67 ct/lb. Brazil should get mostly dry conditions, but showers are possible starting Thursday. Temperatures will average near to above normal. Colombia should get mostly dry conditions, and Central America and the southern third should get showers, although central and northern Mexico will be dry. Temperatures should average near normal.
Chart Trends: Trends in New York are mixed. Support is at 157.00, 154.00, and 151.00 December, and resistance is at 168.00, 170.00, and 175.00 December. Trends in London are mixed. Support is at 2030, 2000, and 1980 November, and resistance is at 2070, 2110, and 2135 November. Trends in Sao Paulo are mixed to down with no objectives. Support is at 204.00, 196.00, and 193.00 December, and resistance is at 214.00, 218.00, and 224.00 December.

SUGAR
General Comments: Futures closed lower in consolidation trading. It looks like futures are in a trading range now. Supplies should be available for buyers, and conditions look good for many production areas. Brazil should remain mostly dry this week, but overall crop development should be good in the center-south region. Steady White Sugar premiums are still around, but ideas are that premiums will weaken as some importing countries will be able to use their own production for a while. Traders are watching for more data on the potential for Indian production as the harvest should be starting. The rains are better in some parts of India now, but overall conditions remain very mixed for Pakistan and much of India, with many areas still too dry. Traders are watching China, normally a big importer, and worry that it could buy less due to less positive economic fundamentals there Southeast Asian Sugar areas are a little dry, but mostly in satisfactory condition.
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 1970, 1950, and 1920 March, and resistance is at 2050, 2085, and 2100 March. Trends in London are mixed to down with no objectives. Support is at 537.00, 533.00, and 532.00 December, and resistance is at 554.00, 563.00, and 569.00 December.

COCOA
General Comments: Futures closed higher on follow though buying as the US grind came in stronger than expected when it was released late last week. Ideas are that demand can improve now that the holiday season is not that far away. The West Africa harvest season is starting now, and Ghana is talking about a smaller than expected crop. However, production in Ivory Coast is called good. Nigeria seems to have mostly good production as well. Charts show that trends are mostly up. Dry weather persists in southern growing areas of West Africa and also in much of Southeast Asia, especially in Indonesia. Malaysia has been seeing scattered showers and seems to be in better condition. However, overall weather patterns are said to be improving in West Africa production areas. Showers are forecast for most areas of western Africa next week and will be welcome.
Overnight News: Scattered showers and storms are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see episodes of scattered showers. Temperatures should average near normal. Brazil will be mostly dry and warm. ICE certified stocks are lower today at 4.216 million bags.
Chart Trends: Trends in New York are mixed to up with no objectives. Support is at 2450, 2365, and 2325 December, with resistance at 2520, 2595, and 2620 December. Trends in London are up with objectives of 1825 December. Support is at 1575, 1550, and 1520 December, with resistance at 1630, 1650, and 1670 December.

Questions? Ask Jack Scoville today at 312-264-4322