As most of the commodity sector has seen a pullback in recent sessions, sugar futures have retreated slightly, but still remain relatively strong.  The spot #11 contract is now just shy of 26 cents, which is still high when viewing the chart over the last six months.  The first reason for sustained prices in the mid 20s is related to the lower numbers coming out of Brazil and Thailand for the current marketing year – these have been discussed in previous reports and is already priced into July/Oct.  The second emerging factor is related to uncertainty around the strength of the Indian Monsoon, particularly in the early July time frame.  Readers should note that we have been focusing on a strong onset period for the 2011 Monsoon as it pertains to India’s sugarcane crop.  However, we have noted the risk for some dryness to limit progress and development in July; recent statements by the Indian Met Dept are now supporting this view for a ‘lull’ in early July.  Overall, we are still expecting favorable seasonal weather conditions which will help put additional supply from India during the 2011/12 season on the world market, but in a year where every available ton counts, there is some supply side risk, and this may be reflected by downward revisions to surplus numbers in the coming months.