Sugar falls as buying interest disappears on CFTC report

SUGAR (NYBOT:SBH14)

General Comments: Futures were lower on ideas that funds and other speculators got very long in the rally about 10 days ago and needed to exit the market. Buying interest has disappeared since CFTC showed more longs than anticipated in the reports issued last night. Prices could continue to work lower in the short term. The fire at the port warehouses of Coopersucar has hurt the overall export pace from Brazil, but other origins, mostly India and Thailand, have been happy to step in and fill the void. 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 is much more difficult now. Meanwhile, countries like India and Thailand have a little less competition for sales. Weather conditions in key production areas around the world are rated as mostly good.

Overnight News: Brazil could see light showers with near to above normal temperatures.

Chart Trends: Trends in New York are down with objectives of 1775 March. Support is at 1830, 1820, and 1815 March, and resistance is at 1880, 1905, and 1915 March. Trends in London are down with objectives of 471.00 and 442.00 December. Support is at 483.00, 478.00, and 470.00 December, and resistance is at 493.00, 498.00, and 500.00 December.

COTTON (NYBOT:CTZ13)

General Comments: Futures closed lower once again on demand concerns. Demand is poor at a time of expanding harvest, and for now the market is in search of some export sales. Traders worry that China will not be a big buyer this year as the government there has been buying a lot and might have enough. However that has been true in past years but the private mills bought here, anyway. The private buyers will not have to buy just from the US as there appear to be increasing supplies available from other origins like India and Pakistan. Good weather in US productions areas should be replaced by scattered showers over the middle of the week, but the crop should remain in good condition as the rains are not expected to be big. Traders should get more reports on demand this 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 down on the charts.

Overnight News: The Delta and Southeast will see rain develop today and tomorrow, then dry weather again over the weekend. Temperatures will average near to above normal. Texas will see dry weather. Temperatures will average near to above normal. The USDA spot price is 75.28 ct/lb. today. ICE said that certified Cotton stocks are now 0.146 million bales, from 0.141 million yesterday. USDA said that net Upland Cotton export sales were 612,300 bales this year and 13,300 bales next year. Net Pima sales were 78,600 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are down with no objectives. Support is at 78.30, 77.40, and 76.80 December, with resistance of 79.75, 80.10, and 81.20 December.

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