Cotton

General Comments: Futures were mixed to mostly a little lower yesterday as traders prepared for the USDA reports that will be released later today. WASDE releases its monthly updates and USDA will also release new production estimates. Trends are still up on the carts and the fundamentals have not really changed. Demand for US Cotton remains very strong and that is good news for sellers as the strong demand implies strong prices should continue. Analysts say the Asian demand is still very strong and likely to hold at high levels for the future. Good US production is expected. Chinese demand is also strong as clothes makers use foreign Cotton to get away from domestic supplies that might have been produced by forced labor and might not be allowed in the US or other western countries.

Photo by Trisha Downing on Unsplash

Overnight News: The Delta will get mostly dry conditions or isolated showers and near to below normal temperatures. The Southeast should see isolated showers and near to below normal temperatures. Texas will have mostly dry conditions or isolated showers and near to below normal temperatures. The USDA average price is now 113.23 ct/lb. ICE said that certified stocks are now 16,507 bales, from 17,617 bales yesterday.

Chart Trends: Trends in Cotton are mixed to up with objectives of 12940 December. Support is at 11580, 11290, and 11100 December, with resistance of 12170, 12280 and 12400 December.

FCOJ

General Comments: FCOJ was higher and might have completed a short-term low in the market. Chart trends are still down. The hurricane season is over and the chances for a damaging storm to hit the state of Florida are almost zero so speculators have gotten out of longs and are going short. The weather remains generally good for production around the world. Brazil has some rain with more in the forecast and flowering is likely. 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. Florida FCOJ inventories are 12.7% less than last year.

Overnight News: Florida should get dry conditions or isolated showers. Temperatures will average near to below normal. Brazil should get scattered to isolated showers and above normal temperatures. ICE said that 0 notices were posted against futures for November delivery and that total deliveries for the month are now 0 contracts.

Chart Trends: Trends in FCOJ are mixed. Support is at 119.00, 116.00, and 113.00 January, with resistance at 123.00, 125.00, and 127.00 January.

Coffee

General Comments: New York and London closed lower last week in chart related trading as futures could not hold new highs for the move. The fundamentals are still considered bullish. The lack of Coffee available to deliver against Robusta contracts remains a factor. Containers are not available in Vietnam to ship the Coffee. Covid has also returned to Vietnam in a big way and could be a factor in interrupting shipments. Production in Vietnam is now estimated at 29 million tons, from 31 million previously as farmers did not get inputs applied in time. Roasters are turning to exchange stocks and are buying futures contracts to get in line for deliveries. Brazil also has less Coffee this year due to a freeze earlier in the year and dry weather at the flowering time a year ago. Scattered showers are still in the forecast for Brazil and flowering is reported now in many growing areas. Production conditions for the next crop in Brazil are called good. Scattered showers are now in the forecast for Southeast Asia and for Vietnam. Good conditions are reported in northern South America with near average rains and good conditions are reported in Central America with near average rains. Conditions are reported to be generally good in parts of Africa.

Overnight News: ICE-certified stocks are unchanged today at 1.841 million bags. The ICO daily average price is now 180.23 ct/lb. Brazil will get scattered showers with near normal temperatures. Central America will get scattered showers. Vietnam will see scattered showers.

Chart Trends: Trends in New York are mixed down with objectives of 199.00, 187.00, and 181.00 December. Support is at 197.00, 195.00, and 190.00 December, and resistance is at 206.00, 212.00 and 215.00 December. Trends in London are mixed to down with objectives of 2100 and 2090 January. Support is at 2130, 2090, and 2080 January, and resistance is at 2220, 2280, and 2310 January.

Sugar

General Comments: New York closed higher as crude oil futures were firm and as supplies of Sugar remain a problem. Ethanol demand for the US was strong. London closed higher. Reports indicate that consumer demand has returned to the market. Ideas are that the supplies are out there but it will take a stronger price to get them into the market. 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. India is not offering as world prices are well below domestic prices and has had some weather problems of its own. Thailand is expecting improved production. It is raining in southern Brazil which will be good for the next crops there.

Overnight News: Brazil will get scattered showers. Temperatures should average below normal today, then above normal.

Chart Trends: Trends in New York are up with objectives of 2050, 2110, and 2170 March. Support is at 1980, 1950, and 1920 March, and resistance is at 2020, 2060, and 2090 March. Trends in London are up with objectives of 524.00 March. Support is at 505.00, 500.00, and 498.00 March, and resistance is at 515.00, 523.00, and 526.00 March.

Cocoa

General Comments: New York and London closed lower and made new lows for the move as ideas of increasing supplies are still around. Trends are down in both markets. Ideas are that demand will only improve slightly 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. Ivory Coast exports were 3.4% higher for beans and about 2% higher for powder, butter, and chocolate in 2020-21. World economies are starting to reopen after Covid and the open economies are giving demand the boost but the boost has not been as strong as hoped for earlier. Ivory Coast arrivals are now estimated at 330,000 tons, up 9.8% from last year. Ghana arrivals are now estimated at 10,951 tons, from 14,485 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 mostly dry conditions and near to above normal temperatures. ICE certified stocks are lower today at 5.279 million bags.

Chart Trends: Trends in New York are down with objectives of 2400 and 2000 December. Support is at 2400, 2330, and 2310 December, with resistance at 2500, 2520, and 2540 December. Trends in London are down with no objectives. Support is at 1640, 1620, and 1610 December, with resistance at 1690, 1710, and 1740 December.