Author: Michael Ferrari, PhD
VP, Applied Technology & Research
July ICE sugar futures still bouncing around in the 14/15 cent range, trying to find some sure footing. Going forward, there are factors to push futures in either direction, but our 2-3 month view is for sustained support to the upside. Weather has been favorable in the origins; the monsoon in India will get off to a better start than in 2009, and there has been a good deal of talk about India returning to the status of net exporter for the 2010/11 crop year. In addition, the global deficit appears to be shrinking and the consensus view is for the supply situation to slowly chip away at supply shortfall. Countering this is the fact that, while we are calling for a better monsoon than last year, we are not sharing the optimistic outlook for a complete recovery of the monsoon this year, and we therefore do anticipate lower than optimal complete recovery of the monsoon this year, and we therefore do anticipate lower than optimal seasonal moisture totals to inhibit sugarcane production in the coming months, hence the Weather Trends view for moderate upside support in the raw sugar futures market.
