December 26, 2014 - Issue #767

In This Issue

1. Holiday Greetings and New Year Schedule
2. Softs Market overview: What's ahead for Coffee, Sugar and Cocoa?
3. Economic Calendar

1. From all of us at Cannon Trading Company, to you and yours, we wish you a healthy and prosperous 2015 New Year.

May your holiday season and the New Year be filled with much joy, happiness and success. We look forward to working with you in the coming year!

New Year Schedule available at:

http://www.cmegroup.com/tools-information/holiday-calendar/files/2015-new-years-holiday-schedule.pdf

https://www.theice.com/marketdata/Calendar.shtml?calendars=Holiday&expirationEnabled=false&calendars=SpecialTradingHours

2. Coffee, Sugar, Cocoa and Cotton Outlook

What's ahead? Weather & Politics: Rain in Brazil; Dark Clouds over Russia Seasonal Swings and Spreads: Shifting Ahead to the New Year Market Sentiment & Other Indicators: Nibbling on Cocoa Fundamental Favorites: Don’t Bale on Cotton

by J. Ganes Consulting, LLC

After months of suffering from below normal rainfall, Brazilian farmers finally got soaking rains that have helped to improve soil moisture levels and have helped to revive coffee trees. The burning question is whether the rains came just in time to spare the crop or was the damage done and no matter how much rain has fallen, the flowers will not set properly creating losses of yet undetermined amounts? Timing is of course everything and the market has reacted bearishly assuming that the scare is now over and the rains will erase the damage from months of extreme moisture deficits coupled with high heat. While the recent rains in Brazil have finally brought necessary relief to the stressed trees it does not guarantee that the 2015-16 crops development will progress normally from here. Only in the next month or two will the full extent of the impact from the prior parched conditions will begin to become more apparent. The heavy rains certainly helped to replenish soil moisture levels that were at extreme hydro-deficits and for some plantations came just in time to keep blossoms from aborting, but this is not true across the coffee belt. The conditions were vary variable ahead of the delayed onset to the rainy season and even the volume of rain that fell was erratic with some areas receiving perhaps too much of a good thing and other regions not enough. On average, the numbers might appear satisfactory but one can’t mix and match to arrive at a beneficial outcome. The trees blossomed but it takes good flowers to make good coffee and the quality of the flowering in some regions was not good. The petals barely opened and showed unusual characteristics that suggest it will not bear fruit properly and should abort. Some of these factors are only first becoming evident. The Brazilian citrus trees are also showing visible signs of damage from the drought stress and there are reports of heavy losses from post blossom dropping of the young fruit. The physiology of both trees is similar and so it would not be unreasonable to conclude then that the probable outcomes may be the same.

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3. Economic Calendar

Source: Moore Research Center, Inc.

* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.

** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.

*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!