Sugar falls to contract lows amid supply overhang


General Comments: Futures were lower and made new contract lows. The market is still preoccupied about the large supply overhang in the market and price action remains weak overall. Thai offers are strong as the harvest is very active there and differentials have been weaker. India is active offering as well. Brazil is offering less now that the harvest season is over, but still has Sugar to sell and will most likely have a big crop next year. Demand might be getting better, but still have not been able to change the trend much as confirmed big deals have been almost impossible to find. Weather conditions in key production areas around the world are rated as mostly good.

Overnight News: Brazil could see dry weather and above normal temperatures through Wednesday, then scattered showers and near to above normal temperatures.

Chart Trends: Trends in New York are down with objectives of 1500 March. Support is at 1520, 1490, and 1460 March, and resistance is at 1550, 1570, and 1590 March. Trends in London are down with objectives of 411.00 March. Support is at 414.00, 411.00, and 408.00 March, and resistance is at 423.00, 428.00, and 432.00 March.


General Comments: Futures closed higher on ideas of increasing export demand for Cotton. Traders say that there is good demand just under the current price area as mills here and in other parts of the world need to get some coverage. China is the number one buyer of US Cotton, but others could be using the recent price weakness to gain coverage while China has been out of the market.. Export sales have been poor for the last few weeks, and China has been quiet. There have been some private sources releasing analysis that shows next to no imports of World Cotton by China in the coming year as it reorganizes its support programs and tries to move massive government stocks. The US economy is improving slowly and should support increases in demand over time as people start to buy clothes again. Brazil conditions are reported to be very good in Bahia with light precipitation and warm temperatures.

Overnight News: The Delta and Southeast will see dry conditions. Temperatures will average near to below normal this week and near to above normal this weekend. Texas will see dry conditions. Temperatures will average above normal. The USDA spot price is 81.10 ct/lb. today. ICE said that certified Cotton stocks are now 0.044 million bales, from 0.044 million yesterday. USDA said that net Upland Cotton export sales were 223,700 bales this year and 9,300 bales next year. Net Pima sales were 16,000 bales this year and 0 bales next year.

Chart Trends: Trends in Cotton are mixed. Support is at 83.80, 82.40, and 81.50 March, with resistance of 85.00, 85.30, and 85.50 March.

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