Raw sugar futures continue to exhibit strength on global supply concerns, helped by the weaker USD.  With nearly all analysts reducing their global crop surplus estimates for 2010/11, with most are now in the range of a 3-4 mmt net global surplus (down from between 6-8 mmt).  There are more concerns now circulating the wires which question the potential size of the Indian crop, a factor that we have been discussing nearly every week since the start of the Monsoon season.  In addition to the impacts that we have been discussing from Indian producers, weather over the past year has contributed to shorter crops in Brazil, Russia and Australia.  Most notably, Brazil’s dryness will likely limit yields, and the outlook for the next few months that ties into the current La Nina might be positive for the Northeaste region, but may still limit development in the Centre-South, which is the primary growing belt for Brazilian sugarcane.  March10 futures have risen to a range of 27-28.5 (cents/#) in recent weeks, and we do expect the 30 cent  barrier to be breached in the short term, as longer range global demand is still expected to remain strong, and uncertainty on the physical side will remain. 

(chart from FINVIZ.com)