Sugar Futures Absorbing Biggest Supply in Decade

Sugar producing countries such as Argentina & Brazil are finding inflating output and contracting imports with the smallest since 2008.  This is proof enough the global sugar supply is extending into a third year – the biggest stretch in over 10 years.

As the Int’l Sugar Organization estimates, global sugar production is expected to exceed demand by almost 6M metric tons, starting in the fiscal year which began this month.  This is more than the US alone can consume in six-months, and this glut of sugar inventory is said to be the most ever.

Bara Levy, chief director for Futures & Options Xecution’s futures division in Chicago, stated today regarding the current sugar futures situation, “Sugar futures rose slightly today on some foreign buying, but the outlook is still poor for future rallies.”  Levy added, “A possible third consecutive annual surplus of raw sugar has been, and is likely to continue pressuring the sugar market.”

There was a hint of an uptrend for sugar futures that began at the beginning of the month.  I look for an extended sugar futures rally through the end of the week, and into the end of the month.

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