Sugar rebounds after large Iraq purchase


General Comments: Futures closed higher on news that Iraq has tendered for 50,000 tons of White Sugar and on some speculative short covering. It was the first demand news to hit the market in quite a while. Demand is there, but not in big amounts as most buyers are not worried about prices. Most statistical organizations continue to look for a big surplus production for the year. Production has been strong in Brazil so far this year, and reports say that the new crop production looks to be strong as well. Exports from Brazil continue to be very strong after the delayed start to the program. Futures trends are down. Big Brazil production remains negative to prices, and traders know that Indian and Thai production is in the market, too. The Thai crushing season is underway with good production expected, but the crushing pace remains slow. Traders wonder if and when India will cut offers to the market due to the lower prices and perhaps less than expected production due to some dry weather at the beginning of the growing season.

Overnight News: Scattered and light showers are expected in Brazil this weekend after a mostly dry week. Temperatures should be near normal. India expects to produce 24.3 million tons of Sugar this year, from its previous estimate of 24.0 million tons. Thailand sold 31,334 tons of Sugar overnight.

Chart Trends: Trends in New York are mixed to down with objectives of 1810 and 1760 March. Support is at 1800, 1770, and 1740 March, and resistance is at 1860, 1885, and 1905 March. Trends in London are mixed to down with objectives of 455.00 and 415.00 March. Support is at 480.00, 475.00, and 470.00 March, and resistance is at 495.00, 496.00, and 501.00 March.


General Comments: Futures were higher as speculators contemplated less planted area next year. Bull spreads were featured as the market tries to find some Cotton. Those looking for Cotton are having a tough time as supplies do not seem to be out there. Export sales have been strong for the last month to six weeks, and strong sales are expected to continue after the failed Chinese government auction a week ago. Buyers there said that the government wanted high prices for inferior Cotton and that they would continue to import even with higher taxes. The current low prices are bringing into question what farmers in Texas and the Delta and Southeast will plant this year. Some are wondering if planted area might be lower this year here in the US due to weak prices against competing crops. The area lost would go mostly to Corn and Soybeans. Current weather features some precipitation in Delta and Southeast areas, but western Texas was mostly dry. Delta areas will turn dry this week. Ideas are that the market can continue to work higher overall.

Overnight News: The Delta and Southeast will see mostly dry conditions, although a few showers are possible early next week. Temperatures will average near to above normal, then above normal starting on Sunday. Texas will get dry weather this week and a shower this weekend. Temperatures will average near to above normal. The USDA spot price is now 74.77 ct/lb. ICE said that certified Cotton stocks are now 0.108 million bales, from 0.108 million yesterday.

Chart Trends: Trends in Cotton are up with objectives of 9100 March. Support is at 78.00, 77.00, and 76.90 March, with resistance of 80.55, 85.25, and 87.00 March.

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