COTTON       

General Comments: Cotton futures closed higher yesterday as demand concerns caused by the return of Coronavirus in Europe and the discovery of a new variant in Africa eased. The variant is expected to spread quickly but produce mild reactions.Traders were also getting ready for the next WASDE reports that will be issued on Thursday. Chart patterns are sideways. The move came despite a strong weekly export sales report. Demand has fallen off with the rally in the US Dollar but US prices are reported to be still well below those in China so strong demand is expected to continue, at least from that destination. News on Friday of lockdowns in Europe along with the discovery of a new variant in Africa hurt demand ideas and caused new selling.Trends are starting to turn down on the weaker demand ideas. Analysts say the Asian demand is still very strong and likely hold at high levels for the future.US consumer demand has been very strong as well despite higher prices and inflation. Good US production is expected.

Overnight News: The Delta and Southeast will get isolated to scattered showers and above normal temperatures. Texas will have mostly dry conditions with isolated showers possible on Friday and above normal temperatures. The USDA average price is now 104.44 ct/lb.ICE said that certified stocks are now 7,024 bales, from 4,200 bales yesterday.ICE said that 0 notices were posted for delivery against December contracts and that total deliveries for the month are now 10 contracts.

Chart Trends:  Trends in Cotton are down with no objectives. Support is at 10350, 10150, and 10040 March, with resistance of 10590, 10920, and 11080 March.

Photo by Jason Leung on Unsplash

FCOJ

General Comments: FCOJ was higher yesterday and trends are sideways. First swing targets were hit on Wednesday for the down move and the market has held those levels since then. Demand ideas were hurt here and around the world by the return of Covid induced lockdowns in Europe and the discovery of a new Covid variation in Africa. The variant seems to spread rapidly but produces mild effects so much of the concern has been lessened for now. The hurricane season is over and the chances for a damaging storm to hit the state of Florida are gone so speculators have gotten out of longs and got short. The weather remains generally good for production around the world. Brazil has some rain with more in the forecast and flowering is likely. Brazil production was down last year due to dry conditions at flowering time and then a freeze just before harvest. Weather conditions in Florida are rated mostly good for the crops with a couple of showers and near-normal temperatures.Mexican crop conditions in central and southern areas are called good with rains. Northern and western Mexico is rated in good condition.

Overnight News:  Florida should get isolated showers. Temperatures will average above normal. Brazil should get mostly dry conditions and below normal temperatures.

Chart Trends: Trends in FCOJ are mixed. Support is at 123.00, 120.00, and 119.00 January, with resistance at 128.00, 132.00, and 135.00 January.

COFFEE 

General Comments: New York and London closed higher yesterday on the logistical and production problems in Brazil and Vietnam. The lack of Coffee available to deliver against contracts remains a factor. Containers are not available in Vietnam or in Brazil to ship the Coffee. Cherry pickers are hard to find in Vietnam due to Covid problems. Covid has also returned to Vietnam and now the rest of the world and could be a factor in interrupting shipments. Brazil also has limited amounts of Coffee available after bad weather at flowering time and then a freeze before the harvest got underway. Production conditions for the next crop in Brazil are called good. Scattered to isolated showers are now in the forecast for Southeast Asia and for Vietnam.

Overnight News: ICE certified stocks are higher today at 1.600 million bags. The ICO daily average price is now 212.69 ct/lb. Brazil will get mostly dry conditions with near to below normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers. ICE NY said that 0 contracts were tendered against December futures and that total deliveries for the month are now 0 contracts.

Chart Trends: Trends in New York are up with objectives of 256.00 March. Support is at 245.00, 237.00, and 228.00 March, and resistance is at 251.00, 254.00, and 257.00 March. Trends in London are up with objectives of 2460 and 2600 January. Support is at 2330, 2300, and 2250 January, and resistance is at 2460, 2490, and 2520 January.

SUGAR               

General Comments: New York and London closed higher yesterday on speculative buying tie to stronger price action in world petroleum and financial markets. Weaker demand ideas were caused by reports of new lockdowns in Europe as the Covid returns there and reports of a new variant discovered in Africa. However, the effects of the new variant are reported to be mild so the fears were less. The daily charts show that trends are starting to turn up. Reports indicate that consumer demand has returned to the market but not in a big way. Ideas are that the supplies are out there but it will take a stronger price to get them into the market. Ideas are that Indian producers and exporters are willing sellers above 20.50 cents. Processors in Brazil are refining the cane for Ethanol more than Sugar right now and this trend is expected to continue due to the relative price spreads. The reduced production potential from Brazil for the current harvest is still impacting the market as cane production suffered last season. India is not offering as world prices are still below domestic prices.

Overnight News: Brazil will get mostly dry conditions. Temperatures should average near to below normal.

Chart Trends: Trends in New York are mixed to up with objectives of 1970, 2040, and 2110 March. Support is at 1900, 1880, and 1850 March, and resistance is at 1920, 1960, and 2000 March. Trends in London are mixed. Support is at 491.00, 487.00, and 483.00 March, and resistance is at 497.00, 506.00, and 509.00 March.

COCOA 

General Comments: New York and London closed a little lower yesterday in correction trading after a sharp rally late last week. The return of the Coronavirus in Europe as well as the new variant found in Africa were the primary reasons to sell but are mostly part of the price now. Much of the selling came on ideas of weaker demand caused by the reports. Ideas are that demand will only improve slightly if at all and production in West Africa appears to be good this year. Both Ivory Coast and Ghana are reporting improved weather as it is now mostly sunny with some scattered showers around. Cocoa arrivals in Ivory Coast ports were 747,000 tons by December 5, from 831,000 tons last year.

Overnight News: Isolated showers are forecast for West Africa. Temperatures will be near to above normal. Malaysia and Indonesia should see showers. Temperatures should average above normal.Brazil will get scattered showers and near-normal temperatures. ICE certified stocks are lower today at 5.046 million bags.ICE said that 25 notices were posted for delivery against December contracts and that total deliveries for the month are now 1,303 contracts.

Chart Trends: Trends in New York are mixed. Support is at 2440, 2380, and 2330 March, with resistance at 2520, 2530, and 2550 March. Trends in London are mixed. Support is at 1660, 1630, and 1610 March, with resistance at 1710, 1730, and 1740 March.