Sugar Futures Lower a Second Day on Brazil’s Currency Issue

Sugar futures have resumed their slide lower for a second day on the outlook of the Brazilian Real weakness will fuel more selling from the world’s largest sugar producer.  After reaching a high of .2016 cents per pound in Mid-October, sugar futures have extended their lows to .1810 as of this writing.

Just yesterday, the Brazilian currency lost almost 2% of its value against the dollar for a couple of reasons: concern that the gov’t isn’t controlling their budget deficits, and to avoid a credit-rating downgrade.  The Real has already slumped 3.4% in a month’s time.
           
Sugar prices have been retreating the past 24 hours due to the recent weakness in the Brazilian Real,” says Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current sugar futures situation.  Riordan added,The overarching concern about the Brazil’s currency is keeping a lid on the market these days.”

The technical trend for sugar futures is now down, but the market has been down with little, or no retracement higher since the mid-October high.  I am looking for some kind of pull-back higher for sugar futures as a way in.

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