Sugar falls on Brazilian real weakness, good weather

SUGAR (NYBOT:SBV13)

General Comments: Futures closed lower on weakness in the real against the U.S. dollar and on good weather for harvest in Brazil. The real keeps sinking and made new lows for the move against the U.S. dollar yesterday, and Sugar futures made new lows for the move. Brazil production could improve as the weather gets better. Forecasts call for warm and dry conditions into the weekend. Mills remain more interested in producing ethanol rather than Sugar due to price. Countries like Thailand and India also expect more production this year. Demand for ethanol has been good, but there is still a lot of Sugar and the supply side fundamentals seem to overwhelm any demand side strength over time.

Overnight News: Brazil could see dry weather and moderate temperatures

Chart Trends: Trends in New York are down with objectives of 1630, 1590, and 1580 October. Support is at 1610, 1595, and 1580 October, and resistance is at 1650, 1685, and 1700 October. Trends in London are down with objectives of 478.00 and 469.00 October. Support is at 478.00, 474.00, and 470.00 October, and resistance is at 488.00, 492.00, and 495.00 October.

COTTON (NYBOT:CTV13)

General Comments: Futures closed sharply lower for the second day on production estimates from India. The country expects to produce 37.2 million bales of Cotton in 2013-14, much higher than had been expected by about everyone. USDA is talking about much more production here in the US as well, and that added to the selling pressure. Buyers have pulled away from the market and will wait for some kind of bottom to form before buying in a big way. Very hot weather conditions in China continue, and the weather in Corron areas is not really improving right now in that country. US crops remain behind the normal pace. The poor planting conditions early in the year have made the crop progress behind normal. Texas is dry, but will turn cooler later in the week. Weather for Cotton still appears good in India.

Overnight News: The Delta will be dry and Southeast will see scattered showers and storms. Temperatures will average above normal in the Delta and near to below normal in the Southeast. Texas will see dry weather. Temperatures will average above normal. The USDA spot price is now 84.47 ct/lb. ICE said that certified Cotton stocks are now 0.037 million bales, from 0.040 million yesterday. USDA said that net Upland Cotton export sales were 81,000 bales this year and 0 bales next year. Net Pima sales were 10,800 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are down with objectives of 8300 October. Support is at 84.85, 84.00, and 83.55 October, with resistance of 86.00, 86.50, and 88.00 October.

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