Sugar trades higher on reports of Brazil port congestion

SUGAR

General Comments: Futures closed a little higher on reports that the port congestion in Brazil was starting to affect Sugar shipments. A weaker U.S. dollar also supported values. The market seems caught in a range between 1800 and 1900 basis New York May. Futures seem to uncover new consumptive demand every time the market moves below 1800 in New York and plenty of offers when a rally is made. Reports indicate that Brazil will start harvesting next month and that a big offer is expected. Brazil will start to offer a little less as mills there prepare for greater domestic Ethanol demand as blends for cars have been changed by the government. Reports from Brazil say that the new crop production looks to be strong, so the diversion into more domestic ethanol use will help offset increased sugarcane production. Exports from Brazil continue to be very strong overall despite the port problems.

Overnight News: Scattered showers are expected in Brazil. China imported 80,556 tons of Sugar in February, down 14.5% from last year.

Chart Trends: Trends in New York are down with objectives of 1810, 1750, and 1700 May. Support is at 1815, 1790, and 1780 May, and resistance is at 1850, 1865, and 1875 May. Trends in London are mixed to down with objectives of 522.00 and 507.00 May. Support is at 525.00, 523.00, and 518.00 May, and resistance is at 536.00, 540.00, and 544.00 May.

COTTON

General Comments: Futures were lower yesterday on news that India and China would sell into local markets from government supplies in an effort to keep prices down. The announcements had the desired effect yesterday. The market has already rallied a lot and now seems to be forming a congestion area. A sideways to lower trade could develop until the end of the month. Demand ideas remain strong overall based on the strong export paces seen in the USDA reports in recent weeks and on reports of tight domestic and world cash markets. Demand is still said to be strong, and sales for export have held up well given the price strength in recent weeks. Some producers in the Delta are noting the recent price rally and might decide to plant more Cotton this year. The plantings intentions report will be released at the end of the month.

Overnight News: The Delta and Southeast will see dry conditions until precipitation develops Friday and this weekend. Temperatures will average near to below normal, then turn warmer this weekend. Texas will get dry weather. Temperatures will average near to above normal today and below normal this weekend. The USDA spot price is now 83.82 ct/lb. ICE said that certified Cotton stocks are now 0.421 million bales, from 0.421 million yesterday. China imported 378,835 tons of Cotton in February, down 38.5% from last year. USDA said that net Upland Cotton export sales were 114,100 bales this year and 74,200 bales next year. Net Pima sales were 40,000 bales this year and 7,400 bales next year.

Chart Trends: Trends in Cotton are mixed to down with objectives of 86.25, 82.00, and 78.85 May. Support is at 88.20, 87.60, and 87.20 May, with resistance of 89.80, 90.50, and 91.80 May.

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