There are apparently some rains forecast for cane-growing regions of CS Brazil tomorrow,
but it’s hard to say how exactly the market will take this.
If the rain is too heavy, participants will worry that the sucrose content is affected, while light rains might assuage some fears about dryness. Besides this, the Indian monsoon is still behind schedule.
While both of these fears should weigh on the market’s mind, they may be deferred farther down the board which would explain why spreads down the board are not giving way to the same weakness seen near the front.
Otherwise, technically today’s close looks fairly weak.
With parabolics and MACD still sending bearish signals, ADX is rising closer to levels that would confirm trend, which could bring some sellers to the board.
From here, our next level of technical support is the 17.17 bottom of the continuation gap, while above here the market would need to see a good close over the 40 day moving average at 18.17 to bring some confidence back to the bulls. However, closing over 17.47 is constructive and we will need to test this level again tomorrow to move lower.