COFFEELifetime trading range $0.41.50 to $3.37.50 per lb.
Trades on the ICE from 2:30 a.m. to 1:00 p.m. CDT
This week coffee prices held up quite well in the face of the never ending Euro debt crisis, an extremely strong U.S. dollar and power diving equity prices. Keep a very close eye on this market. The choppy sideways trading range is beginning to take on the characteristics of a bottom. Remember, a market can only move in three directions. Up, down or sideways. Sideways market action can last for months or even years. Take a look at the long term chart and you will see it for yourself. Bulls buy upside break outs and watch the market fall back to the bottom of the range and bears sell down side breakouts and watch the market return to the top of the trading range. Until a breakout is confirmed it’s best to sell against the highs and buy against the lows of a sideways, non trending market. If you don’t possess the discipline to trade a sideways market, don’t trade. Your account equity will vaporize!.
Isn’t it amazing how high prices motivate us? According to the U.S. Department of Agriculture India is forecast to produce a record coffee harvest of 5.2 million 60 kilo bags for the 2011 – 2012 crop year. That’s 400,000 bags higher than the previous forecast. Encouraged by higher prices farmers have taken much better care of their crops. Mother Nature also lent a hand by providing good growing weather this season.
According to a government official, Kenya’s coffee output is projected to increase 8 percent to 54,000 tonnes in the 2011 – 2012 crop year. Again, as in the case of India, higher prices saw farmers taking better care of their crops. The official also made it known that at least 20 percent of the country’s 2010 – 2011 coffee output of 50,000 tonnes had been smuggled through neighboring countries.
The coffee crops of the eastern and central coffee growing regions of Uganda are in excellent condition. Ongoing rains are assisting in producing a bountiful crop. I’d be willing to bet that farmers there are taking very good care of their crops as well.
It seems to be the same story across the world’s coffee growing regions. There will be more coffee produced this season than last. Do keep in mind that an increase in coffee drinking is also taking place. The producer of Keurig single serve coffee brewers, Green Mountain Coffee Roasters Inc. reported the company’s fiscal fourth quarter earnings tripled. Led by sales growth of it’s K-Cup portion packs. Those machines have made it very simple to brew yourself a cup of coffee. If it’s easy we like it! It’s the one armed bandit of coffee brewers.
Weekly technical indications on Friday, Nov 11: At this time the week’s trading range was 237.30 – 226.95, the last print is 229.80.The stochastic has issued a sell signal. The market continues to trade between the 9 bar moving average and lower Bollinger band. At 41.49 the RSI is somewhat higher than last week’s reading of 41.63. The M.A.C.D. histogram of -03.6 is minutely lower than last week’ reading of -0.42. A weekly close at or above 237.80 in December coffee will turn the weekly trend up.
COCOA
Lifetime trading range: $444 to $5,379 per tonne
Trades on the ICE from 3:00 a.m. to 1:00 p.m. CDT
Last week I wrote that Ivory Coast cocoa farmers were hoarding cocoa beans hoping that prices would increase. According to the International Cocoa organization this contributed to a 16.5 percent reduction in cocoa arrivals for export at the Ivory Coast’s ports of San Pedro and Abidjan.
When it comes to cocoa growing regions in Cameroon there’s trouble in River City. Or perhaps I should say the city is a river! Cocoa farmers in Cameroon have a very serious outbreak of black pod disease on their hands. La Nina has bared her toothless grin and provided enough rain to create one huge water park. Unless farmers treat the outbreak with fungicide they face losing much if not all of the yet to be harvested main crop. Word is that the government of Cameroon will provide the training and chemicals to begin treatment. Nigeria is fairing somewhat better. The onset of the dry season will allow cocoa farmers to sun dry their cocoa properly.
There are 5,000 to 7,000 tonnes of cocoa ready for sale that are being held hostage by road conditions in Cameroon. Four months of heavy rainfall have left the dirt roads used for transporting cocoa and supplies in treacherous condition. Although the rain increased the size of cocoa beans produced in October, poor post harvest handling has negatively affected their quality.
The amount of cocoa flowing out of West Africa must be huge. As I write this Wednesday, December cocoa futures are down near a dollar, and London NYSE Liffe July cocoa futures touched their lowest level in more than two years. Broad based weakness in commodities is taking it’s toll on cocoa prices. According to NYSE Liffe’s latest commitments of traders report professional money managers have cut their short positions in cocoa to 3,821 contracts as of November 1st. The previous report indicated they were short 5,171 contracts. Timing is everything. And this time it appears the pro’s were out of step!
Weekly technical indications for Friday, Nov 11: At this time the week’s trading range was 27.40 – 25.00, the last print is 25.10. The stochastic remains is neutral. The market pierced the 9 bar average, but was unable to hold and broke to the week’s low and a hair above the lower Bollinger band. RSI at 36.44 is lower than last week’s reading of 42.14. The M.A.C.D. histogram at -24.70 is lower than last week’s indication of -23.67. A weekly close at or below 26.06 in December cocoa futures will turn the weekly trend down.
COTTON
Lifetime trading range: $26.84 to $227.00 per lb.
Trades on the ICE from 8:00 p.m. to 1:30 p.m. CDT (Next Day)
Cotton futures traded as high as $219.70 in March of 2011. As I write this Thursday morning December futures are trading at 99.62. You would expect U.S. cotton growers to be wringing their hands repeating woe is me under their breath, right? Wrong! According to the National Cotton Council decent profits are expected by the majority of Mid – South cotton growers in spite of the markets fall from spring’s extraordinary highs.
When cotton prices began their move higher last year many cotton growers contracted to sell their crops. This was prior to the March highs, but still at profitable levels. Cotton prices have remained above eighty five cents for the last year. Breakeven point for most cotton farmers is in the seventy five cent area. So, even though the cotton market has slid to lower levels, most cotton growers can profit. At the same time these profits will add six billion dollars to the Mid – South’s economy. This couldn’t have come at a better time.
U.S.D.A. forecasts expect Arkansas, Mississippi and Tennessee to produce 3.4 million bales of cotton this growing season. That’s 27 percent more than last year’s harvest of 2.7 million bales. About 75 percent of the Cotton crop is exported bringing in fresh capital from around the world. Far better than relying on local wages to support the region’s economy. Add the cotton production of Alabama, Louisiana and Missouri to the mix and you have a combined harvest worth upwards of $2 billion. Last year’s harvest came in at $1.4 billion. All things considered mid – south cotton growers had a very good year!
U.S. Cotton exports for the week ending November 3rd 2011 were 998,000 running bales. This is a huge number. Hopefully it will not be revised downward next week.
Weekly technical indications for Friday, Nov 11: At this time the week’s trading range was 100.78 – 95.96, the last print is 99.25. The stochastic is in neutral. RSI at 42.76 is a bit higher than last week’s reading of 42.23. The M.A.C.D. histogram at -0.46. is lower than last week’s indication of -0.34. This week’s trading took place between the 9 bar average and lower Bollinger band. A weekly close at or below 99.10 in December Cotton will turn the weekly trend down.
SUGAR
Lifetime trading range: 2.30 cents to 66 cents per lb.
Trades on the ICE from 2:30 a.m. to 1:00 p.m.
Results of a study recently completed by Brazil’s University of Sao Paulo concerning the use of sugar cane to produce ethanol and generate electricity to power a worldwide fleet of hybrid cars is almost too good to be true. After considering it’s advantages and disadvantages the researchers found that only four percent of Brazil’s available cropland would be needed to do the job. The study was based on hybrid autos equipped with internal combustion engines powered by ethanol with fuel consumption of 35 miles per gallon. This would certainly put the brakes on oil consumption. This gives us something to think about before buying that next car.
The seemingly never ending barrage of negative economic news from Europe continues to pressure commodity prices. Many traders are concerned that the global economy will slow. If so, the end result will be a drop in demand for sugar as well as a host of other commodities. Large crops are on the horizon for India and Thailand. However, exports from those countries are not up to snuff. This is adding to the negative picture for sugar prices.
On Tuesday March sugar traded at it’s lowest level since October. The market then reversed and rallied sharply. This created an outside day that many are taking to indicate a bullish setup. Technicals are not correct 100 percent of the time. They are to be used as a guide. After all the bridge that collapsed further up the road won’t show on a road map! I prefer weekly studies. Past experience shows they are more reliable and give a better picture of a markets condition. March sugar continues to be in a down trend. And in my opinion it won’t take much in the way of bearish news to send this market lower.
Weekly technical indications for Friday, Nov 11: At this time the week’s trading range is 26.18 – 25.19, the last print is 25.40. The stochastic is in sell mode. RSI at 47.99 is lower than last week’s indication of 48.57. The M.A.C.D. histogram at -0.36 is a scant .03 higher than last week’s reading of -0.39. The market continues to trade between the 9 bar moving average and center Bollinger band. A weekly close at or above 28.57 in March Sugar will turn the weekly trend up.
Trades on the ICE from 2:30 a.m. to 1:00 p.m. CDT
This week coffee prices held up quite well in the face of the never ending Euro debt crisis, an extremely strong U.S. dollar and power diving equity prices. Keep a very close eye on this market. The choppy sideways trading range is beginning to take on the characteristics of a bottom. Remember, a market can only move in three directions. Up, down or sideways. Sideways market action can last for months or even years. Take a look at the long term chart and you will see it for yourself. Bulls buy upside break outs and watch the market fall back to the bottom of the range and bears sell down side breakouts and watch the market return to the top of the trading range. Until a breakout is confirmed it’s best to sell against the highs and buy against the lows of a sideways, non trending market. If you don’t possess the discipline to trade a sideways market, don’t trade. Your account equity will vaporize!.
Isn’t it amazing how high prices motivate us? According to the U.S. Department of Agriculture India is forecast to produce a record coffee harvest of 5.2 million 60 kilo bags for the 2011 – 2012 crop year. That’s 400,000 bags higher than the previous forecast. Encouraged by higher prices farmers have taken much better care of their crops. Mother Nature also lent a hand by providing good growing weather this season.
According to a government official, Kenya’s coffee output is projected to increase 8 percent to 54,000 tonnes in the 2011 – 2012 crop year. Again, as in the case of India, higher prices saw farmers taking better care of their crops. The official also made it known that at least 20 percent of the country’s 2010 – 2011 coffee output of 50,000 tonnes had been smuggled through neighboring countries.
The coffee crops of the eastern and central coffee growing regions of Uganda are in excellent condition. Ongoing rains are assisting in producing a bountiful crop. I’d be willing to bet that farmers there are taking very good care of their crops as well.
It seems to be the same story across the world’s coffee growing regions. There will be more coffee produced this season than last. Do keep in mind that an increase in coffee drinking is also taking place. The producer of Keurig single serve coffee brewers, Green Mountain Coffee Roasters Inc. reported the company’s fiscal fourth quarter earnings tripled. Led by sales growth of it’s K-Cup portion packs. Those machines have made it very simple to brew yourself a cup of coffee. If it’s easy we like it! It’s the one armed bandit of coffee brewers.
Weekly technical indications on Friday, Nov 11: At this time the week’s trading range was 237.30 – 226.95, the last print is 229.80.The stochastic has issued a sell signal. The market continues to trade between the 9 bar moving average and lower Bollinger band. At 41.49 the RSI is somewhat higher than last week’s reading of 41.63. The M.A.C.D. histogram of -03.6 is minutely lower than last week’ reading of -0.42. A weekly close at or above 237.80 in December coffee will turn the weekly trend up.
Trades on the ICE from 3:00 a.m. to 1:00 p.m. CDT
Last week I wrote that Ivory Coast cocoa farmers were hoarding cocoa beans hoping that prices would increase. According to the International Cocoa organization this contributed to a 16.5 percent reduction in cocoa arrivals for export at the Ivory Coast’s ports of San Pedro and Abidjan.
When it comes to cocoa growing regions in Cameroon there’s trouble in River City. Or perhaps I should say the city is a river! Cocoa farmers in Cameroon have a very serious outbreak of black pod disease on their hands. La Nina has bared her toothless grin and provided enough rain to create one huge water park. Unless farmers treat the outbreak with fungicide they face losing much if not all of the yet to be harvested main crop. Word is that the government of Cameroon will provide the training and chemicals to begin treatment. Nigeria is fairing somewhat better. The onset of the dry season will allow cocoa farmers to sun dry their cocoa properly.
There are 5,000 to 7,000 tonnes of cocoa ready for sale that are being held hostage by road conditions in Cameroon. Four months of heavy rainfall have left the dirt roads used for transporting cocoa and supplies in treacherous condition. Although the rain increased the size of cocoa beans produced in October, poor post harvest handling has negatively affected their quality.
The amount of cocoa flowing out of West Africa must be huge. As I write this Wednesday, December cocoa futures are down near a dollar, and London NYSE Liffe July cocoa futures touched their lowest level in more than two years. Broad based weakness in commodities is taking it’s toll on cocoa prices. According to NYSE Liffe’s latest commitments of traders report professional money managers have cut their short positions in cocoa to 3,821 contracts as of November 1st. The previous report indicated they were short 5,171 contracts. Timing is everything. And this time it appears the pro’s were out of step!
Weekly technical indications for Friday, Nov 11: At this time the week’s trading range was 27.40 – 25.00, the last print is 25.10. The stochastic remains is neutral. The market pierced the 9 bar average, but was unable to hold and broke to the week’s low and a hair above the lower Bollinger band. RSI at 36.44 is lower than last week’s reading of 42.14. The M.A.C.D. histogram at -24.70 is lower than last week’s indication of -23.67. A weekly close at or below 26.06 in December cocoa futures will turn the weekly trend down.
Trades on the ICE from 8:00 p.m. to 1:30 p.m. CDT (Next Day)
Cotton futures traded as high as $219.70 in March of 2011. As I write this Thursday morning December futures are trading at 99.62. You would expect U.S. cotton growers to be wringing their hands repeating woe is me under their breath, right? Wrong! According to the National Cotton Council decent profits are expected by the majority of Mid – South cotton growers in spite of the markets fall from spring’s extraordinary highs.
When cotton prices began their move higher last year many cotton growers contracted to sell their crops. This was prior to the March highs, but still at profitable levels. Cotton prices have remained above eighty five cents for the last year. Breakeven point for most cotton farmers is in the seventy five cent area. So, even though the cotton market has slid to lower levels, most cotton growers can profit. At the same time these profits will add six billion dollars to the Mid – South’s economy. This couldn’t have come at a better time.
U.S.D.A. forecasts expect Arkansas, Mississippi and Tennessee to produce 3.4 million bales of cotton this growing season. That’s 27 percent more than last year’s harvest of 2.7 million bales. About 75 percent of the Cotton crop is exported bringing in fresh capital from around the world. Far better than relying on local wages to support the region’s economy. Add the cotton production of Alabama, Louisiana and Missouri to the mix and you have a combined harvest worth upwards of $2 billion. Last year’s harvest came in at $1.4 billion. All things considered mid – south cotton growers had a very good year!
U.S. Cotton exports for the week ending November 3rd 2011 were 998,000 running bales. This is a huge number. Hopefully it will not be revised downward next week.
Weekly technical indications for Friday, Nov 11: At this time the week’s trading range was 100.78 – 95.96, the last print is 99.25. The stochastic is in neutral. RSI at 42.76 is a bit higher than last week’s reading of 42.23. The M.A.C.D. histogram at -0.46. is lower than last week’s indication of -0.34. This week’s trading took place between the 9 bar average and lower Bollinger band. A weekly close at or below 99.10 in December Cotton will turn the weekly trend down.
Trades on the ICE from 2:30 a.m. to 1:00 p.m.
Results of a study recently completed by Brazil’s University of Sao Paulo concerning the use of sugar cane to produce ethanol and generate electricity to power a worldwide fleet of hybrid cars is almost too good to be true. After considering it’s advantages and disadvantages the researchers found that only four percent of Brazil’s available cropland would be needed to do the job. The study was based on hybrid autos equipped with internal combustion engines powered by ethanol with fuel consumption of 35 miles per gallon. This would certainly put the brakes on oil consumption. This gives us something to think about before buying that next car.
The seemingly never ending barrage of negative economic news from Europe continues to pressure commodity prices. Many traders are concerned that the global economy will slow. If so, the end result will be a drop in demand for sugar as well as a host of other commodities. Large crops are on the horizon for India and Thailand. However, exports from those countries are not up to snuff. This is adding to the negative picture for sugar prices.
On Tuesday March sugar traded at it’s lowest level since October. The market then reversed and rallied sharply. This created an outside day that many are taking to indicate a bullish setup. Technicals are not correct 100 percent of the time. They are to be used as a guide. After all the bridge that collapsed further up the road won’t show on a road map! I prefer weekly studies. Past experience shows they are more reliable and give a better picture of a markets condition. March sugar continues to be in a down trend. And in my opinion it won’t take much in the way of bearish news to send this market lower.
Weekly technical indications for Friday, Nov 11: At this time the week’s trading range is 26.18 – 25.19, the last print is 25.40. The stochastic is in sell mode. RSI at 47.99 is lower than last week’s indication of 48.57. The M.A.C.D. histogram at -0.36 is a scant .03 higher than last week’s reading of -0.39. The market continues to trade between the 9 bar moving average and center Bollinger band. A weekly close at or above 28.57 in March Sugar will turn the weekly trend up.