Sugar pressured by large Brazil supplies


General Comments: Futures closed lower in light volume trading. Traders are still talking about big production in Brazil and around the world. Traders remain bearish on supplies, especially from Brazil, and this has hurt New York prices. However, the market seems unable to sustain the down trend and might have factored in all the bearish news for now. Traders are keeping an eye on developments in Brazil and expect big production as the harvest moves forward. Brazil mills could concentrate on Ethanol production first and Sugar production second, and that could create some short term shortages for the market. Sugar producers in Russia said that the planting pace has turned slow there as producers wrestle with high costs of production against falling domestic and world prices. Demand is said to be strong from North Africa and the Middle East as buyers get stocks in hand for Ramadan in July. Chart patterns are mixed for the short term.

Overnight News: Mostly dry conditions are expected in Brazil. Temperatures should average near to above normal.

Chart Trends: Trends in New York are mixed. Support is at 1720, 1710, and 1680 July, and resistance is at 1775, 1800, and 1835 July. Trends in London are down with objectives of 486.00 and 481.00 August. Support is at 485.00, 482.00, and 479.00 August, and resistance is at 496.00, 502.00, and 504.00 August.


General Comments: Futures were higher yesterday in consolidation trading. Traders are looking ahead to the reports on Friday and also the export sales report on Thursday to see if more demand was found. Ideas are that the demand can continue for now as China moves to increase its stocks and as private buyers there reject offers from the government due to quality and price. Planting conditions for the next crop remain a problem in the US. Rains will move through the Delta and Southeast through the weekend to keep progress slow. Weather will be watched as more wet weather in the Delta and Southeast could create less interest in Corn and more in Cotton to avoid having Corn pollinate in the hottest time of the year. So far, planting of all crops is slow, and Cotton progress could slow down again with showers in the forecast for the Delta and Southeast this weekend. Short term trends are mixed.

Overnight News: The Delta and Southeast will see rains develop in all areas through Saturday, then dry conditions. Temperatures will average above normal. Texas will get mostly dry weather. Temperatures will average near to above normal, then below normal this weekend. The USDA spot price is now 82.77 ct/lb. ICE said that certified Cotton stocks are now 0.492 million bales, from 0.493 million yesterday. ICE said that delivery notices were 0 contracts today and now total 612 contracts for the month. USDA said that net Upland Cotton export sales were 117,300 bales this year and 84,000 bales next year. Net Pima sales were 1,300 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 86.25, 85.40, and 85.00 July, with resistance of 88.10, 88.50, and 90.00 July.

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