Sugar rises on strengthening Brazilian real

SUGAR (NYBOT:SBV13)

General Comments: Futures were a little higher on a stronger Brazilian real. After the close, the Fed announced it was not tapering, and this caused a further rally in the real and a sharp move lower in the U.S. dollar. It is possible that sugar rallies a little more today. The crop there in India expected to be large and some will be exported. Futures are now falling back from the upper end of the trading range. Demand has improved, but there is plenty of Sugar to buy. Thailand expects more production this year, and is actively offering their supplies into the world market. Differentials there have been moving lower in the last few weeks, but are more stable now. Brazil and India are selling as well. Prices appear to be in a longer term trading range for now due to solid demand and big production.

Overnight News: Brazil could see dry weather and moderate temperatures. USDA has asked for more bids from Ethanol makers as it tries to move surplus Sugar from the market and avoid having to accept a lot of Sugar for payment on defaulted loans.

Chart Trends: Trends in New York are mixed to down with no objectives. Support is at 1740, 1710, and 1700 March, and resistance is at 1760, 1780, and 1810 March. Trends in London are mixed to down with objectives of 473.00 December. Support is at 479.00, 475.00, and 470.00 December, and resistance is at 487.00, 490.00, and 494.00 December.

COTTON (NYBOT:CTZ13)

General Comments: Futures closed higher in response to forecasts for heavy rains later this week and into next week that could hurt quality for the crop in open bolls. USDA showed that 37% of the crop had open bolls in the Monday report. It is possible for a couple of inches of rain to fall from Texas to the east. Georgia could get double that amount. US crop development remains behind due to delayed planting this year, but crop conditions right now are generally good with moderating temperatures and rains in the forecast for Texas this week and dry weather in the forecast for the Delta and Southeast. The weather forecasts and the crop progress and condition reports offer no concerns for production at this time. Weather for Cotton still appears good in India and Pakistan, and harvest should be starting there. Cotton in China is seeing rain that could hurt quality.

Overnight News: The Delta will see some storms on Friday and Southeast will see showers this weekend. Temperatures will average near to above normal. Texas will see scattered showers again at the end of the week. Temperatures will average above normal. The USDA spot price is now 81.50 ct/lb. ICE said that certified Cotton stocks are now 0.015 million bales, from 0.015 million yesterday. USDA said that net Upland Cotton export sales were 103,100 bales this year and 0 bales next year. Net Pima sales were 8,000 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 83.55, 82.95, and 82.45 December, with resistance of 85.15, 85.55, and 86.25 December.

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