Sugar futures are defying fundamental news such as favorable weather contributing to brisk production in Brazil’s south center sugar-belt region. Sugar futures are up 25 points today currently trading at $0.2023 per pound for October delivery at the Intercontinental Exchange in New York City.
Brazil’s “sugar council” Unica reports the south central sugar producing region was up just over 3M tons in the second-half of last month – that’s reportedly up 9.5% from the first-half of July and up 10.6% from the same time last year. With favorable weather in the region, it is allowing a good pace for sugar-cane cutting.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the sugar futures market by stating, “Besides the rapid pace in cane cutting, the price of sugar does not favor ethanol production at this time .” Plotkin adds, “We can expect sugar mills to produce more sugar because of these high gas prices.”
The technical trend for sugar futures remains “up” with a possible top in place, however. If sugar futures were to breakout below .1875 with lower lows, we could possibly see a new down-trend for this market.
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