Wednesday, December 4, 2013

Coffee rallies as producers hold onto inventories

By Jack Scoville


General Comments: Futures were sharply higher in London and a little higher in New York and Sao Paulo. London was higher on reports of light offers again from Vietnam due to recent rains and low prices. Roasters and others look for supplies and some have turned to Arabica, although not enough to move New York futures that much. The Arabica market is seeing only light offers as well, but buying interest for Arabica overall remains very limited. Brazil said last week it is considering new measure to support producers if needed. Brazil has a lot of Coffee to sell, but the market there remains quiet as producers wait for prices to rally above the cost of production. The rest of northern Latin America was quiet, but there is talk of a lot of Coffee there as well. Colombia has been more active, but sales have tailed off lately Central America is showing light offers as the harvest progresses under mostly good conditions. New York is trading in a range, but London continues moving higher in the short term and is now closet o objectives for the move.

Overnight News: Certified stocks are lower today and are about 2.673 million bags. The ICO composite price is now 104.41 ct/lb. Brazil will get scattered showers this weekend. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get mostly dry weather. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed. Support is at 107.00, 105.50, and 104.00 March, and resistance is at 112.00, 115.00, and 117.00 March. Trends in London are up with objectives of 1760 January. Support is at 1725, 1665, and 1630 January, and resistance is at 1750, 1770, and 1780 January. Trends in Sao Paulo are mixed. Support is at 132.00, 131.00, and 129.00 March, and resistance is at 136.50, 138.00, and 140.00 March.


General Comments: Futures closed mixed in consolidation trading. Prices remain in a trading range, and it seems like the market wants some demand news. Prices are still getting support from the storm that hit the production areas last week. Quality has suffered with the storm, and there is potential for some yield loss as well. There are questions about demand in China as the government there has offered its supplies into the domestic market. It sold half of its offer at the auction last week and will most likely offer more soon. Wire reports indicate that some production has been lost in China after recent bad weather in some growing areas. Brazil conditions are reported to be very good in Bahia. Harvest continues this week in the US, but should get interrupted again late in the week when the cold and snow and rain arrives.

Overnight News: The Delta and Southeast should see dry weather today, then some showers and snow late in the week and through the weekend. Temperatures will average below normal. Texas will see rain and snow for the next couple of days, then dry conditions. Temperatures will average much below normal. The USDA spot price is 74.94 ct/lb. today. ICE said that certified Cotton stocks are now 0.225 million bales, from 0.237 million yesterday.

Chart Trends: Trends in Cotton are mixed. Support is at 78.00, 77.40, and 76.65 March, with resistance of 79.65, 80.50, and 80.95 March.


General Comments: Futures closed lower as the weather in Florida remains generally very good. Cold air is coming again at the end of the week, but harmful temperatures should stay well to the north of any production areas. Current above normal readings in northern areas will be replaced by much below temperatures this weekend. No one is predicting any freezing temperatures for Florida. Traders are expecting USDA to lower production even more in coming production reports. The greening disease has affected crops in a big way and could cause reduced production for the next few years. Growing and harvest conditions in the state of Florida remain mostly good. It has turned drier, which is seasonal, and reports indicate that crops are in good condition. Irrigation water is available. Harvest is increasing. Brazil is seeing near to above normal temperatures and showers.

Overnight News: Florida weather forecasts call for mostly dry conditions. Temperatures will average above normal.

Chart Trends: Trends in FCOJ are mixed. Support is at 135.00, 131.00, and 130.00 January, with resistance at 141.00, 143.00, and 145.50 January.


General Comments: Futures were lower in both New York and London and made new lows for the move. Traders were talking about increased offers from India and Thailand. All this coming on the back of very high Sugarcane production in Brazil. The market needs some demand news. Chart trends remain down in New York and London. Countries like India and Thailand are selling as much as possible. Weather conditions in key production areas around the world are rated as mostly good. There is no news of losses to Sugar areas in Vietnam and China, but some losses are possible due to big rains a few weeks ago. India could see some losses from unseasonal cyclone activity in the northeast and east part of the country. Eastern growing areas have now seen three or four cyclones in the last couple of months. Weather in Brazil appears to be mostly good, with showers to support new crop development.

Overnight News: Brazil could see showers and near to above normal temperatures.

Chart Trends: Trends in New York are down with objectives of 1680 March. Support is at 1680, 1670, and 1640 March, and resistance is at 1715, 1730, and 1750 March. Trends in London are mixed. Support is at 452.00, 446.00, and 440.00 March, and resistance is at 461.00, 465.00, and 466.00 March.


General Comments: Futures closed mixed in consolidation trading. There were reports of increased selling from Ivory Coast last week, and supplies should be available. Ideas of very strong demand are supporting prices, and certified stocks keep dropping in New York. Reports indicate that rains are less this week in West Africa, which should help harvest progress and processing progress. Much of West Africa is now reporting reduced production due to stressful conditions earlier in the growing season, but this has yet to bear out in official data outside of Nigeria. The overall fundamental picture should support generally higher prices as the supply situation should be tight once the harvest selling is done. Midcrop production conditions are rated as good

Overnight News: Scattered showers or dry conditions are expected in West Africa. Temperatures will average near to above normal. Malaysia and Indonesia should see scattered showers. Temperatures should average near to above normal. Brazil will get dry conditions and near normal temperatures. ICE certified stocks are lower today at 3.413 million bags.

Chart Trends: Trends in New York are mixed to up with objectives of 2880 and 2960 March. Support is at 2800, 2770, and 2755 March, with resistance at 2845, 2860, and 2890 March. Trends in London are mixed. Support is at 1730, 1710, and 1680 March, with resistance at 1775, 1790, and 1800 March.

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