Author: Michael Ferrari, PhD
VP, Applied Technology & Research
A stronger crude oil market and the weaker US dollar will lend support to ICE sugar futures at the start of the week; this coming after the spot contract dropped to the lowest levels seen since before the confirmation of last year’s failure of the Indian Monsoon, which put a premium on raw physical supply and kept the global deficit in check for several months more than many were previously anticipating. Our report that went out last week discussed what we are expecting for the critical onset period; the behavior of the monsoon rains has a higher level of sensitivity in the sugar market this season, coming after a year that saw world sugar prices doubled within a few months in 2009. WTI has been stressing that the outlook for the 2010 onset is favorable – this will help growers in both northern and southern growing belts. However, we still have some concerns for some dryness during the mid-crop period, so the view for the 2010 crop is cautiously optimistic. Now that the market is focusing more attention to India, our reports in the coming weeks will assess our view for the world’s largest producer, Brazil.
