Sugar Futures— Sugar futures in the May contract settled last Friday in New York at 14.55 a pound while currently trading at 15.10 up about 55 points for the trading week as prices are right at a 2 year high. At the current time I’m not involved, but I do believe higher prices are ahead and if you are long a futures contract I would continue to place the stop loss under the 10-day low standing at 14.50 as an exit strategy, however the chart structure will not improve for another 6 trading sessions so you will have to accept the monetary risk.
Sugar prices are trading above their 20 and 100 day moving average telling you that the trend is to the upside as fundamentally speaking Thailand’s Office of the Cane and Sugar Board reported Wednesday that Thailand’s sugar production from Dec 1st through Feb 15th was 7.4 MMT, down -14.0% y/y. A drought in Thailand, the world’s 4th largest sugar producer is slashing the country’s sugar output.
The Thailand Meteorological Department said this year’s drought in Thailand is the worst in 40 years as the Thai Sugar Millers Corp said Feb 7th that Thailand’s 2019/20 sugar production might drop -35% y/y to 9 MMT from 14 MMT in 2018/19 as dry conditions reduce sugarcane yields.
CHART STRUCTURE: SOLID
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