Sugar higher as Brazil said to increase ethanol in gas blends

SUGAR

General Comments: Futures closed higher again on ideas that demand is increasing. Most traders still note that big supplies appear to be available to the market, but Brazil said it will increase the ethanol in its gasoline blends in May. There are ideas that this could help work off a lot of the surplus production in Brazil and could tighten world balance sheets. India said it will pay its producers more to grow Sugarcane this year, and that might indicate that current production has been disappointing. Most buyers are still not worried about prices and are not chasing rally attempts. Most statistical organizations continue to look for a big surplus production for the year, although the surplus amounts in these forecasts seem to be dropping. 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. The Thai crushing season is underway with good production expected, but the crushing and export pace remain slow. It is possible that the crop size there has been overestimated. 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 through this weekend. Temperatures should be near to above normal.

Chart Trends: Trends in New York are mixed to up with objectives of 1910, 1950, and 1965 March. Support is at 1875, 1825, and 1805 March, and resistance is at 1905, 1920, and 1960 March. Trends in London are up with objectives of 510.00, 516.00, and 535.00 March. Support is at 490.00, 480.00, and 475.00 March, and resistance is at 503.00, 515.00, and 520.00 March.

COTTON

General Comments: Futures were higher as traders contemplate less planted area next year and strong export sales. Demand bulls noted positive economic data released last week as another reason to buy. Export sales have been strong for the last month to six weeks, and strong sales are expected to continue after another failed Chinese government auction held over the weekend. However, the export sales report was not bullish last week as the demand was down from previous reports. The report showed that China had cancelled some of its recent purchases. 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 featured some precipitation in Delta and Southeast areas, but western Texas was mostly dry. Delta and Southeast areas will turn dry starting today. Ideas are that the market can continue to work higher overall.

Overnight News: The Delta and Southeast will see mostly dry conditions. Temperatures will average near to above normal. Texas will get dry weather. Temperatures will average much above normal. The USDA spot price is now 77.45 ct/lb. ICE said that certified Cotton stocks are now 0.144 million bales, from 0.137 million yesterday.

Chart Trends: Trends in Cotton are mixed to up with objectives of 9100 March. Support is at 82.10, 81.40, and 80.20 March, with resistance of 84.00, 85.25, and 87.00 March.

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