Sugar finds strength as Brazil uses more sugar for ethanol

SUGAR

General Comments: Futures closed higher on reports from private analysts that Brazil will use sugar to produce ethanol and use less to produce sugar. The same service said that more pests are hurting the next production. The market closed strong and could work higher in the short term, but is expected to find plenty of selling on the rally. Traders remain bearish on ideas of big supplies, especially from Brazil. Traders in Brazil expect big production as the weather is good. Demand is said to be strong from North Africa and the Middle East. ICE said that a Sugar storage facility in Paranagua, Brazil, was damaged by fire this week and that deliveries could be affected.

Overnight News: Showers are expected in Brazil, mostly in the south and southwest. Temperatures should average near to above normal.

Chart Trends: Trends in New York are up with objectives of 1770 and 1820 October. Support is at 1700, 1680, and 1665 October, and resistance is at 1760, 1790, and 1820 October. Trends in London are up with objectives of 495.00 October. Support is at 480.00, 472.00, and 469.00 October, and resistance is at 487.00, 491.00, and 494.00 October.

COTTON

General Comments: Futures were lower again on what appeared to be long liquidation from speculators and perhaps some farm selling. Ideas of better weather in production areas were once again negative for prices. Some storms are moving through western Texas and conditions there are improving. Good weather is being reported in the Delta and Southeast as well. The weather has improved, and looks to improve conditions generally through the rest of the week. Scattered showers are forecast for the Delta and Southeast, and wetter and warm weather is expected in Texas. Weather for Cotton appears good in India, Pakistan, and China. It is possible that futures made at least a short term high on Friday.

Overnight News: The Delta and Southeast will see some showers this weekend. Temperatures will average above normal. Texas will get showers today, and then dry weather. Temperatures will average above normal. The USDA spot price is now 82.49 ct/lb. ICE said that certified Cotton stocks are now 0.550 million bales, from 0.545 million yesterday. USDA said that net Upland Cotton export sales were 69,800 bales this year and 81,400 bales next year. Net Pima sales were 1,200 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are mixed to down with no objectives. Support is at 86.50, 85.60, and 84.75 October, with resistance of 88.20, 89.60, and 90.10 October.

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