Sugar Futures—Sugar futures in the March contract is trading slightly lower this Monday afternoon in New York down 10 points at 14.81 a pound selling off despite the fact that crude oil prices are up nearly $4 a barrel on the news that there is a vaccine for the Coronavirus. I have been recommending a bullish position from around the 14.65 level and if you took that trade continue to place the stop-loss under the 10-day low on a closing basis only at 13.98 as the exit strategy.
Fundamentally speaking last Friday’s weekly Commitment of Traders (COT) report showed that funds increased their net-long NY sugar positions by +10,604 contracts the week ended Oct 27 to a 4-year high of 262,579 contracts, the second-highest ever. Maxar recently said that Brazil’s sugar-growing regions had received only 5%-25% of average rain in the past few months, leaving crops “extremely dry.” Also, a La Nina weather pattern could lead to prolonged excessive dryness in Brazil that cuts sugarcane yields.
Sugar prices are still trading above their 20 &100 day moving average as the trend remains to the upside as I still believe the risk / reward is in your favor so stay long.
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