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Old September 19th, 2011, 11:25 PM
pitgurufk pitgurufk is offline
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Soft Review for The Week of September 19, 2011

The Softs Review
For the week of September 19, 2011

By Jurgens H. Bauer


The soft complex has been on the defensive and I see no reason for that to change. Following the October option expiration sugar prices plummeted, dropping sharply and leaving the impression that there is more still ahead. Since Friday's drop was so sizable there may be a bounce, but don't expect bearish fundamentals to change - supply looks in good shape while demand does not.

Cocoa values have fallen over 300 points in the past two weeks and while a bounce may be in order, there is no fundamental reason to suggest demand will outstrip supply anytime soon. Since estimates remain high and in surplus, the down trend should remain intact in Cocoa. I will look to sell rallies.

After dropping sharply on Friday, Coffee prices bounced vigorously and yet that bounce couldn't hold. Prices may try and recover, but be wary of the bull side until provided with evidence that the lows Friday will continue to hold. Demand may be showing signs of being price sensitive and with prices historically high and big crops expected prices remain vulnerable.

Even Cotton looks poor now after the negative export numbers released late last week. Since then it has held declines, but the technical picture is rightfully raising concerns among longs.


**Chart courtesy Gecko Software’s Track n’ Trade Pro
Past performance is not necessarily indicative of future results.

Disclaimer: Past performance is not indicative of future results. Trading futures and options involves substantial risk of loss and is not suitable for all investors. Fundamental factors, seasonal and weather trends, daily news, and other current events may have already been factored into the markets. The use of stop loss or contingent orders may not protect profits and may not limit losses to the amount intended. Certain market conditions make it difficult or impossible to execute such orders.
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