Sugar retraces gains made in wake of Brazil fires

SUGAR (NYBOT:SBH14)

General Comments: Futures were lower as prices continued to give back the gains seen from the fire in Brazil last Friday. Charts show that the market is now testing the support area left after the dramatic rally. Prices remain supported because of the fire to the Coopesucar warehouses in Santos port in Brazil. The loss of storage and problems with logistics is the major problem and the reason to buy futures. But, the overall fundamental of big supplies remains. Sugar prices had dropped until recently due to big world production and especially big production ion Brazil. The production in Brazil and around the world is still there, but the ability of Brazil to export just got to be more of a problem. Meanwhile, countries like India and Thailand have a little less competition for sales. Dry weather or scattered showers are now reported in production areas of Brazil. India should still have more than enough production to allow for exports and is offering. There are reports of strong offers from Thailand. Thai differentials are stable.

Overnight News: Brazil could see dry conditions with near to above normal temperatures.

Chart Trends: Trends in New York are up with objectives of 2020 and 2175 March. Support is at 1915, 1905, and 1865 March, and resistance is at 1975, 2000, and 2015 March. Trends in London are mixed. Support is at 507.00, 499.00, and 493.00 December, and resistance is at 517.00, 519.00, and 529.00 December.

COTTON (NYBOT:CTZ13)

General Comments: Futures closed sharply lower on harvest related selling. USDA showed that the harvest has been slow in its release Monday, but good weather has seen the harvest pace pick up quite a bit this week. Crop condition ratings were good. Traders should get more reports on demand next week. Brazil conditions are reported to be very good in Bahia. US crop conditions right now are generally good in Texas. The Delta and Southeast are reporting generally favorable conditions as well. Trends are mostly down on the charts and price action yesterday was very weak.

Overnight News: The Delta and Southeast will see dry weather. Temperatures will average near to below normal. Texas will see dry weather. Temperatures will average below normal this week and near to above normal this weekend. The USDA spot price is 77.78 ct/lb. today. ICE said that certified Cotton stocks are now 0.094 million bales, from 0.86 million yesterday. USDA said that net Upland Cotton export sales for the week ending October 3 were 44,000 bales this year and -4,400 bales next year. Net Pima sales were 25,400 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are down with objectives of 7920 December. Support is at 80.40, 80.10, and 79.00 December, with resistance of 81.20, 81.70, and 82.10 December.

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