Sugar gains after Brazil production estimates lowered

SUGAR (NYBOT:SBV13)

General Comments: Futures were higher on follow through speculative buying. Trends remain up on the charts. Production estimates have been lowered for Brazil this week to provide a fundamental reason to buy. India also might have production problems as the monsoon has been slow to recede. Traders also note the increased potential for more crop losses in Brazil and other countries due to rains in the forecast for this week. The rains have cut yields in Brazil and could do the same in India as the monsoon there has been very slow to recede. There is talk of increased offers from India and Thailand, and Thai differentials have been under some pressure in recent weeks, but are stable so far this week. Thailand expects more production this year, and is actively offering their supplies into the world market. India and Brazil are the same, so Sugar should be available at good prices for buyers.

Overnight News: Brazil could see scattered showers and moderate temperatures. .

Chart Trends: Trends in New York are up with objectives of 1880, 1940, and 1980 March. Support is at 1825, 1815, and 1790 March, and resistance is at 1870, 1880, and 1910 March. Trends in London are mixed to up with objectives of 473.00 and 499.00 December. Support is at 487.00, 478.00, and 476.50 December, and resistance is at 500.00, 504.00, and 508.00 December.

COTTON (NYBOT:CTV13)

General Comments: Futures closed moderately higher after a quiet session Traders are watching the weather for clues on crop potential as the harvest comes closer. The weather looks to be good for most of the week, but some showers could appear again on Friday and into the weekend. Traders also heard about monsoon rains in India that are slow to withdraw this year. The extra rains could really hurt quality there, and maybe yields. Worries about Chinese production are also heard after some big typhoons passed near important production areas. Some short covering was noted on ideas that the crop is less than expected in the US, in part due to the recent big rains. US crop conditions right now are generally good with moderate to warm temperatures and dry conditions in the forecast for Texas this week and dry weather in the forecast for the Delta and Southeast. Some showers are possible in all areas by this weekend to slow harvest down and possibly create some quality concerns. Moves higher today could set the stage for a new leg higher on the charts.

Overnight News: The Delta and Southeast will see mostly dry weather, but showers should develop on the Delta on Friday and over the weekend in the Southeast. Temperatures will average above normal. Texas will see dry weather. Temperatures will average above normal this week and below normal this weekend. The USDA spot price is not available today. ICE said that certified Cotton stocks are now 0.011 million bales, from 0.011 million yesterday.

Chart Trends: Trends in Cotton are mixed to up with objectives of 8940 and 9300 December. Support is at 85.80, 85.50, and 84.60 December, with resistance of 87.70, 87.85, and 89.40 December.

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