Sugar Futures Lower on Global Glut of Sweetener

Sugar futures may be losing it’s sweetness.  Brazil, the world’s top producer of sugar, is realizing investments in sugar-cane are being cut amid a “global glut” of the sweet stuff.

The top producer of sugar in Brazil shares a joint venture with Royal Dutch Shell and they realize along with much supply of sugar plentiful, that Brazilian government policies actually hold down the price of ethanol.  The actual returns on capital from the ethanol & sugar collaboration have dwindled to less than 10%.

In my opinion, the short term picture for sugar futures looks bearish.  The Commitment of Traders (data) is still showing overbought conditions still in place.  Look for sugar (futures) to move lower,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current sugar futures situation.

The technical trend for sugar futures has been down (albeit choppy) since March.  Only last week did my work show a possible change in trend for sugar futures to “up,” but with absolutely no follow-up.  I am proceeding with caution with this market…

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