Futures closed higher in New York and Sao Paulo as a cold front entered Brazil. It will not get cold enough to damage crops, but it was a reminder that Winter is coming. The threat for a freeze might be elevated this year due in part to the dry conditions seen earlier in the year. Prices have been generally strong in reaction to estimates showing sharply lower production for Brazil and the potential for a significant supply against demand deficit for the coming year.
The Brazil harvest is underway and the market is looking for news on actual yields. Overall production is expected to be sharply lower after the drought in Coffee áreas during January and February. The harvest has started early due to advanced maturation of the beans. Vietnam has started to replant trees and is now expecting somewhat loer production for the next few years. Rains are appearing in Central America that should trigger a new round of flowers and also will help cherries as they start to appear for the coming crop.
Overnight News: Certified stocks are higher today and are about 2.580 million bags. The ICO composite price is now 176.30 ct/lb. Brazil will get mostly dry weather. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get some showers in most áreas, but mostly in Eastern Mexico and all of Central America. Temperatures should average mostly above normal.
Chart Trends: Trends in New York are mixed. Support is at 199.00, 195.00, and 189.00 July, and resistance is at 209.00, 212.00 and 219.00 July. Trends in London are mixed. Support is at 2140, 2110, and 2050 July, and resistance is at 2200, 2230, and 2260 July. Trends in Sao Paulo are mixed. Support is at 247.50, 238.50, and 231.00 September, and resistance is at 260.00, 264.00, and 267.00 September.
Futures were slightly higher after trading lower much of the session. Futures remain in a trading range, with the potential for crop losses in Brazil providing support and the current oversupplied market conditions keeping sellers active. It tested Support áreas yesterday and these held for the time being. Brazil is starting to harvest, and so far the mills are processing for more ethanol. That is positive news for Sugar producers who need to find all the alternative demand that exists. However, the move to Ethanol in Brazil has not been enough to rally Sugar futures. There is increased buying interest in world markets as Muslim countries get ready for Ramadan in June. Weather conditions in key production areas around the world are still rated as mostly good except for Brazil. The trading range can hold for the short term, but prices could work lower again once the Ramadan buying is done.
Overnight News: Brazil could see dry conditions and near to above normal temperatures.
Chart Trends: Trends in New York are mixed. Support is at 1720, 1710, and 1680 July, and resistance is at 1765, 1785, and 1800 July. Trends in London are mixed. Support is at 468.50, 461.00, and 458.00 August, and resistance is at 482.00, 485.00, and 491.50 August.