Sugar Futures May See Demand Soon

An Aussie-based research group claims global sugar surplus can be reduced by 23% than recently forecasted due to sugar mills in Brazil diverting more sugar-cane to ethanol.  Millers there are reportedly directing just over 45% of harvested sugarcane toward sweetener, down from an average 48% the previous two years.

Global sugar production is now expected to be almost 178M tons for the 2013-2014 season, and that is down from almost 182M tons from this past year.  Consumption, on the other hand, is expected to rise three million tons from the fiscal year that started in April.
            
Weather in production areas across the world have been favorable to strong (sugar) production.  Commodity markets in general have been week, and sugar (futures) is no exception,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current sugar futures situation.  Craney added, “Look for continued support at current (sugar futures) price levels though.”

The trend for sugar futures remains down with no bottom yet in sight.  This news should allow sugar futures to rebound at which time I will look again for shorting opportunities until a clear change in trend occurs.

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