Author: Michael Ferrari, PhD
VP, Applied Technology & Research
Hopefully, readers of the WTI weekly sugar report were able to take advantage of our thoughts conveyed in last week’s discussion. The deficit in global stocks notwithstanding, we did think that the market was due for a mild correction, as much of the speculation over increasing shortages seemed to be taking the negative crop outlooks a little too far. While the general trend is still overall a constructive one, we felt that the market moved to 30 cents a little too fast, and that a continued rally of this nature was not sustainable, given the current fundamentals. US dollar strength also helped in this recent move (March dropped to 26.7 cents in last Friday’s session), but the primary driver was a brief consensus that the rally was overdone, with some favorable long range supply expectations. With $74 crude, we expect strength in sugar futures to resume over the coming weeks, but at a more moderate pace.
