Sugar Futures—Sugar futures in the March contract is trading lower by 24 points or 1.62% at 14.58 a pound as prices are right near a 3 week low. I’ve been recommending several bullish positions with an average price around the 15.00 level and if prices close below 14.66 which could happen in today’s trade as then it would be time to move on and look at other markets that are beginning to trend.
Fundamentally speaking prices dropped to 2-week lows after Unica reported that Brazil’s Center-South sugar production in the first half of November rose +57 y/y to 1.242 MMT, above expectations of 1.120 MMT. The percentage of cane used for sugar rose to 41.74% in 2020/21 from 28.42% in 2019/20. Another negative factor for sugar is the outlook for more sugar supplies from India. Meir Commodities India Pvt on Tuesday projected that India would export 1.5-2.0 MMT of sugar in 2020/21 without any government subsidy since neighboring countries can be expected to purchase Indian sugar rather than Brazilian sugar.
Sugar prices are now trading below their 20 day but still above their 100 day moving average as weather conditions obviously have improved, however I am still very bullish longer-term as I think prices historically speaking look incredibly cheap, however as a trader you must follow your risk management rules.
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