Soft Commodity Market Summary - October 23, 2009
Soft Commodity Market Summary Presented By:
Broad Soft Market Summary: A rather mixed week for the softs. While the dollar is trading at 14 month lows and the CRB is at its highs, only cocoa broke to contract highs this week. OJ and coffee both sold off quite a bit going into the end of the week. Cotton and sugar were basically unchanged to slightly lower respectively. The CFTC's ruling to impose limits on large speculators should lead to the reallocation of ETFs assets into softs.
Coffee (DEC) For week: Opened 142.85 Closed 136.20
Coffee traded near contract highs for most of the week before selling off hard on Friday. Before the sell off Friday, coffee was at its highest prices since June. A firmer dollar, harvest and product coming to market, profit taking and technical selling led to over a 2% one day loss. For the most part, this was a rather slow week for fundamental news. Traders are still focused on Brazilian crop reports.
Cotton (DEC) For week: Opened 67.90 Closed 67.75
Fairly muted week for cotton, with less than a four cent range for the week. Cotton is still above old resistance/new support of 65.50 and is still trading near contract highs. The rains that pushed cotton above 65 seem to have subsided, for now. If cotton can hold these gains, it would mark the biggest single monthly in gain since September 2008. The USDA has lowered their estimates from 13.44 million bales to 13 million. Export sales fell to the marketing year low of 31000 bales.
Sugar (MAR) For week: Opened 24.09 Closed 22.95
Sugar was modestly lower this week due to the rains in Brazil easing, helping harvest quality as well as production. Sugar prices have more than doubled this year and are trading near 28 year highs. Unica reported that output in the Center South region of Brazil (where 80% of Brazil's production comes from) was up to 2.15 metric tones versus 1.63 last year. Even with a lower dollar coupled with the highest energy prices of the year, sugar wasn't able to push past the 26 cent mark.
Cocoa (DEC) For week: Opened 3271 Closed 3370
Cocoa futures pushed to 30 year highs on Tuesday before pulling back later in the week. Buying was attributed to stronger demand prospects and concerns over the West African supplies. Hershey's Q3 earnings rose 30% YOY. Analysts expect the crop to come in 100k tones lower than last year. Also, threat of strikes in Africa has lent support to the market.
Orange Juice (NOV) For week: Opened 114.80 Closed 110.45
After hitting contract highs of 118.20 on Wednesday, OJ closed the week almost eight cents lower. There is a gap from the 9th and 10th trading session at 108.65 to 109.65. Thursday was the largest single day sell-off in OJ since September 24. OJ prices are still higher almost 60% YTD, and are higher by 10% since the USDA report last week.
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