Sugar futures are quickly back at last year’s highs after sinking .03 cents by last month as a major investment bank claims fundamentals are lending more to support high sugar prices. Sugar futures backed off 10 points today with trading settling near .1532 per pound at the Intercontinental Exchange.
With hedge-fund selling out of the way, uncertainty about Chinese economic growth put aside, and multi-year low oil (delivery) prices now being realized, demand has reemerged into the picture with an increased forecast to this season’s sugar deficit. The investment bank claims the extent to which supply outstrips demand is 2.1M tons to 6.8M tons.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the sugar futures market by stating, “It didn’t take long for the fundamental situation to assert the role of the sugar market driving factor when technical selling ruled the day in January and February.” Craney adds, “Now other factors such as rebound of the US Dollar, a return to weakness in Brazil’s currency, or a stall in other commodity’s could weigh on sugar prices.”
The technical trend for sugar futures is clearly up with no top yet in sight. Sugar futures seemed to have claimed a wall from a downtrend in late February, and some kind of corrective pullback should be seen before hoping onboard the long side.
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