Industrial-Energy Needs Boost Sugar Futures

A day after sugar futures made new lows to the 17.5c level (from 19.1c in mid-March), the market has finally rebounded.  There is a consensus that more of the new sugar-cane harvest in Brazil will be used for ethanol-based gasoline.

Sugar futures have dropped almost 10% this year as Brazil sugar authorities have forecasted a record bumper-crop.  Other sugar specialists in Brazil report over 1.8M tones of sugar awaiting export at their ports.            

Brazil’s efforts to boost the ethanol demand caused the sugar futures to rise in today’s market. Brazil begins (sugar) cane harvest in the month of April,” said Barb Levy, chief director for Futures & Options Xecution’s futures division in Chicago, regarding the current sugar futures situation. Levy adds, ” If demand continues to increase, the availability of cane supplies will tighten, continuing to support sugar futures prices.”

The technical trend for sugar futures is down and it came without warning.  I will await a pull-back higher in sugar futures before the next sell-signal is taken.

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