In a note to clients on Monday, we stated that If the pattern that sugar has been following remains, we should expect another run at the 32/33 cent level to occur this week.  The market has come down a bit off of the highs from early Feb; recent reports that the global market will move to surplus and a statement forecasting a normal Indian Monsoon from the Met Dept have helped bring the market down slightly.  However, we have observed that even  when there has been positive supply news, the market seems to quickly absorb the information and then resumes the broader upward channel that has been in place since September (Tuesday’s chart above).

The map and inset below shows that the global La Nina conditions are weakening, but still in place.  The transition currently does not contain a significant signal for sugarcane (we noted last week that the Centre-South new crop should get off to a good start), but there are concerns for the broader commodity complex, which can support sugar trading at higher levels than what ‘should’ be considered fair value, even if the physical situation for the sweetener is turning favorable.