Sugar futures has been supported for the past two sessions as it has been reported Brazilian mills are losing ground against ethanol in the duel over sugar cane. Sugar futures are trading “unchanged” today settling near .1471 cents per pound at the InterContinental Exchange in London.
A Brazilian sugar-cane group reportedly released data showing sugar mills diverting just over 42% of their cane for the dedication of sugar rather than ethanol in the latter part of last month. The bullish aspect is that with more cane processed than anticipated for ethanol use, it is the fact that the need of sugar for food is outweighing the need for fuel (on the futures charts).
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the sugar futures market by stating, “The need for actual sugar does indeed compete with motor fuel in one of the biggest sugar producing nations in the world.” Plotkin added, “If the demand for ethanol fuel is extra high in the Southern Hemisphere, this could create a bullish market for sugar (futures) indeed.”
The technical trend for sugar remains “up,” but is somewhat at a crossroad. Sugar futures is testing its recent highs while the volatility is picking-up at these high levels.
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