Author: Michael Ferrari, PhD
VP, Applied Technology & Research
July ICE sugar futures have broken through the 16 barrier, as the US dollar has been showing further declines; the current range is right where sugar was trading in late April. With a weaker USD, we are expecting the increases in purchases from non-US markets to continue this week. What is more important is that the contract has now showed a rise in 6 straight sessions, which is the longest streak of consecutive increases the sweetener has seen in approximately 9 months. Short covering will likely continue this week, possibly pushing futures to the 16.5-18 cent range for the next few weeks. The WTI view for sugar over the next two months is consistent with the message that we have been discussing in previous updates: moderate upside support, balanced by periods of sideways activity. While the current weather pattern in India should exert some downside pressure, this will start to erode as we get into July, when a more sustained upside channel becomes will likely dominate trading.
