Will a strong crude market raise sugar prices?
General Comments: Futures were lower again as the U.S. dollar moved higher against most other world currencies. Ideas of big production potential for Brazil, Honduras, and Vietnam kept the trade bearish. The cash market seemed mostly quiet due to the price weakness. Reports of generally good growing conditions at this time in Brazil provided the best reasons to sell, but reduced exports from Brazil provide a good reason to buy. Ideas are that Vietnam also has a lot of coffee to sell. Internal prices in Vietnam remain at high levels compared to London and were higher last week. Producers are not offering and hope for higher prices with the approach of the Tet holiday next month.
Many are concerned about the potential for reduced Brazil production due to earlier drought and the cold and dry winter, and some are talking about reduced rains this year in Espiritu Santo and parts of Minas Gerais that could hurt production. There is plenty of rain in some areas this week, and producers in much of Minas Gerais expect good crops. There are also reports of short crops in parts of Central America and some areas in South America due to the lack of farmer investment from the low prices, but Honduras has production and has been selling as much as possible.
Overnight News: Certified stocks are higher today and are about 1.992 million bags. The ICO composite price is now 115.25 ct/lb. Brazil will get showers and storms each day, with best amounts and coverage in the second half of the week. Temperatures should be near to above normal. Colombia should get isolated showers. Central America and southern Mexico should get isolated showers or dry conditions. Temperatures should average near to above normal.
Chart Trends: Trends in New York are mixed. Support is at 124.00, 122.00, and 120.00 March, and resistance is at 128.00, 130.00 and 131.00 March. Trends in London are mixed. Support is at 1680, 1650, and 1620 March, and resistance is at 1720, 1740, and 1760 March.
General Comments: Futures closed a little higher in both New York and London. New York still appears to be putting a bottom together. London still displays a weaker chart pattern but did not extend losses yesterday or for the past few days. A stronger U.S. dollar was negative, but the West African main harvest will start to wind down soon. Arrivals have been good in West Africa and are reported to be good in Southeast Asia so far this season. However, arrivals in West Africa have been behind year ago levels when they were expected to be above year ago levels. Prices are weak overall due to the ongoing harvest, but have found some good buying interest at current levels as some are now viewing the market as cheap. World supply ideas remain high.
Overnight News: Mostly dry conditions are expected in West Africa. Temperatures will average above normal. Malaysia and Indonesia should see frequent showers. Temperatures should average above normal. Brazil will get dry conditions and near to above normal temperatures. ICE certified stocks are higher today at 3.546 million bags.
Chart Trends: Trends in New York are mixed. Support is at 1870, 1850, and 1840 March, with resistance at 1930, 1950, and 2000 March. Trends in London are mixed to down with no objectives. Support is at 1330, 1320, and 1300 March, with resistance at 1390, 1450, and 1460 March.