Author: Michael Ferrari, PhD
VP, Applied Technology & Research
Here is the discussion of the world sugar markets that was communicated earlier this week:
World sugar futures continue to trade in the range that WTI has been discussing, as the market comes to grips with the fact that, while a global shortage in physical supply still exists, we are likely beyond the most difficult point with respect to market tightness, and the outlook going forward is one of cautious optimism. Last week’s move (Mar10 dropping from nearly 30 cents to the mid 26 cent range), puts sugar futures in a range that we feel is considered fair value, keeping in mind the current magnitude of the global physical balance, and the prospects of improvement as we move through 2010. As stated, we view this recent move as a mild correction, and still expect the longer range trend to remain constructive over the coming months. Our long range analysis is focusing on the Indian Monsoon onset and El Nino direction as the two key milestones in our supply forecast going forward; these two factors will shape our balance sheet expectations for the remainder of the Oct/Sep crop year.
Mar is currently at 26.34; May at 25.63.
