Sugar futures have reversed course after an emerging uptrend Friday once USDA officials came to the conclusion sugar stocks will hit a nine-year high. Sugar futures are down 15 points today currently trading at .1606 per pound at the Intercontinental Exchange in New York.
It is estimated European Union sugar production will increase by 17% in the forthcoming season to 17.4M tons – 900T tons of it intended for commercial use – which compares to the EU’s estimate of 17.6M tons. The USDA Brussel’s bureau, however, revised down the current marketing year’s ending stocks to 1.27M tons, but still 562T tons greater than the official USDA estimate.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the sugar futures market by stating, “What is not being mentioned is the heavy carryover of sugar stocks from the bumper crop 2014-15 season.” Levy adds, “We may be seeing higher sugar (futures) prices because of the overall global shortfall in production this season.”
The technical trend for sugar futures has turned “up” late last week. Sugar futures will need to breakout above .17c per pound and demonstrate follow-through for the uptrend to most likely be sustained.
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