Sugar Futures—Sugar futures in the March contract settled last Friday in New York at 14.91 a pound while currently trading at 15.00 up slightly for the trading week continuing its bullish momentum. I have been recommending a bullish trade from around the 14.65 level and if you took that trade continue to place the stop loss at the spike bottom which stands around the 13.98 on a closing basis only as an exit strategy.
For the bullish momentum to continue prices have to break the November 3rd high of 15.23 in my opinion as I think that could happen in next week’s trade as there is still significant room to run as I see no reason to be short. At the current time I also have bullish recommendations in coffee and orange juice as I believe the whole sector will continue to move higher especially if adverse weather conditions persist.
Fundamentally speaking prices have inched higher over the past 6 weeks with NY sugar climbing to an 8-1/2 month high last Tuesday and London sugar rising to a new 8-1/2 month high Thursday on concern that Brazil’s dry conditions may curb sugarcane yields and reduce Brazil’s sugar production. Irregular rain in Brazil’s sugar-growing areas is keeping soil moisture levels below normal. Maxar recently said that Brazil’s sugar-growing regions had received only 5%-25% of average rain in the past few months.
Sugar prices are still trading above their 20 & 100 day moving average as this trend remains strong as I will be looking at possibly adding more contracts to the upside as risk/reward remains in your favor.
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