Sugar Futures Extend Gains After Brazil’s Output Cut

Sugar futures are extending their recent gains from news that Brazil will produce less sugar cane than previously forecasted.  Sugar futures haven’t seen these prices since late April/early May.

A Brazilian-based sugar industry group says now that there will be 1.3M metric tons less sugar produced for this current season that started six months ago.  Rains in Brazil’s center-south sugar growing region earlier this year is said to have been the reason for less yields.
           
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the current sugar futures situation,With the Brazilian sugar crush now about 75 percent complete, production figures are coming in lower than the April forecast. Additionally the cold wet weather earlier in the season has adversely affected the sugar content of the cane.”  Levy adds,Sugar futures are responding with higher trading sessions.”

The technical trend for sugar futures is up as of last month.  I am looking for a low-risk entry into this market, but think another pull-back for sugar futures is needed.

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