Cocoa Downtrend Weakens

Name: Jurgens Bauer Company: Jurgens Bauer & Associates

Favorite Movie: Shawshank Redemption and Rumblefish

Cocoa 

London is higher. December Cocoa has maintained itself above the 10 day moving average, while flirting with a slope change in the 20 day.  Although price action has been jittery, volume has been low.  And it still seems as if prices are attempting to bottom and turn around.  The downtrend is old and has weakened.  In my book, what’s needed is some good volume on an up move—sufficient to get Dec through 1825 ND, then maybe 1842. If that can happen, it will likely attract further interest and chase out shorts—stimulating values higher.

December is currently 1819 bid, offered at 1822.  The high for Dec so far is 1830 and the low is 1804, so prices are looking 15-20 higher this morning.  

Values continue to show resilience, rebounding from early losses to close up on the day.

November 18 straddles got crossed (the executing broker was on both sides), traded 25 times at 110.   Dec. 17.5 p/ 18.5 call strangle went for 85 250 times, and the Dec 24 calls went at 2 points. 

Volume was 812 futures in outcry, with 8003 in e-trading. 

Trend: Down 

Support: 1780, 1760, 1700-1685

Resistance: 1822-1828, 1842, 1865    

Coffee

I covered shorts and actually went lightly long, via some November 125 calls yesterday. I’m not convinced that prices are going higher, as I’m still very much concerned with December taking out 114.60. That means 110 in my book, but prices just seem unable to pick up any momentum on the downside, instead finding the ability to trade the range between 115 and 118-119. For the time being, I’ll play that range.

December is currently 116.45 bid, offered at 116.60.  The high for Dec so far is 116.60 and the low is 116.10, so prices are stuck in a narrow band so far, but looking 50 higher this morning.  

Trend: Sideways to down 

Support: 115.25, 115, 114.40

Resistance: 116.55, 117.65, 118.65-119.10

Cotton

U.S. Export Sales for Week Ending 8/30/2007

Net Upland sales of 276,900 running bales were 38% below the prior week.  The major buyers were China (116,700 RB), Turkey (44,300 RB), Indonesia (33,700 RB), Thailand (16,200 RB), South Korea (12,200 RB), and Mexico (11,900 RB).  Exports of 325,400 RB were 2% above the week earlier, but 3% under the prior 4-week average.  The primary destinations were China (139,100 RB), Mexico (38,000 RB), Turkey (36,400 RB), Thailand (24,500 RB), Indonesia (23,600 MT), and Pakistan (12,800 RB).  Net American Pima sales of 1,900 RB were primarily for China (700 RB) and Pakistan (600 RB).  Exports of 9,200 RB were mainly to Pakistan (3,100 RB), China (2,600 RB), and Italy (2,000 RB).        

At  the time of this writing, CTZ is currently 6050/6054, the high so far is 6079, the low is 6030, and the last trade is 6050.

Volume is low and only 127 this morning electronically.

The Dec/March spread is quoted 306/300

Technical: sideways to up

Support:  60.20-60.00, 59.50, 58.65,

Resistance: 61.30-61.40, 61.85-62.00, 63.50

The Information and opinions contained herein comes from sources believed to be reliable, but certainly not guaranteed as to accuracy or completeness. No responsibility is assumed with respect to any statement, nor with respect to any expression of opinion herein contained.  All views are the opinions of the author at the time of writing and are subject to change without notice.  No statement should be construed as an offer to buy or sell a commodity. This publication is for information purposes only.

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