Posts Tagged ‘sugar futures contract’

Brazilian Rains Help to Boost Sugar Futures

Sugar futures eased back a bit today following yesterday’s 3% rally on news of rains in South America helping to extend the current rally. Sugar futures closed down 13 points to settle trading today at .1130 cents per pound at the Intercontinental Exchange .

Despite the sentiment of sugar being more abundant than sand on the beach, bullish factors are emerging such as the Brazilian rains seen stalling the sugar-cane harvest in South America’s center-south growing region, and sugar output behind analysts expectations last month. Brazil is one of the world’s top producers of the sweet stuff and mills in that region are responsible for reportedly 90% of the country’s sugar output.

The technical trend for sugar is down, however sugar futures are at a crossroads at this time. A trade above .1165 in the near-term could push sugar futures to an uptrend while a trade down to .1084 could keep the lower prices intact – a plus for the consumer.

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Sugar Futures Expert Expects No Quick Recovery

Sugar futures were hit with a glut following multi-year highs in 2011 and has since given back two-thirds from its high prices, but one expert says sugar prices may recover in the 2016-17 season. Sugar futures are down 12 points from yesterday’s close closing the day near 10.61 cents per pound at the Intercontinental Exchange.

The top sugar producing and exporting countries (such as India & Thailand) actually subsidize sugar growers and this fact could keep a lid on higher prices short-term – says the CEO of a Brazilian sugar company. He goes on to say that investment has been rather low in cash-strapped sugar mills and this fact alone could see lower volumes of sugar production which will support values to the product.

The technical trend for sugar is down with no bottom yet in sight. Pretty soon holiday demand for sugar should pick-up, but I don’t see any fundamental issues that would change the overall trend happening any time soon – enjoy the low consumer prices while we can.

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Sugar Futures Extend Low’s With Oil’s Drop

Sugar futures have extended their lows, yet again, to prices not seen in years as demand for the sweet-stuff reportedly remains subdued. Sugar futures ended the day down 14 points at $0.1510 per pound on the ICE Exchange.

Sugar futures, as well as crude oil futures, are two (of “22” total) commodity futures markets that comprise the Bloomberg Commodity Index. These two markets have helped slide the commodity index to a five-year low.

The technical trend for sugar futures is down with no bottom yet in sight. I will be looking for a way back in the “short-side” of this market as I believe I was prematurely stopped-out very early this morning.

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Sugar Futures May Reverse on Looming Shortage in Brazil

With drought cutting into supplies in Brazil, the global sugar market is shaping up to be in its first deficit in half a decade (claims a top exporter and producer there). Sugar futures have recently climbed to .17 and one-fifth cent a pound in the larger rallies in two months.

Sugar futures have plummeted over 50% from their highs since 2011 as farmers planted more sugar cane, but now both Brazil and India are considering reducing sugar output (to reduce global reserves) for the first time in four years, the USDA estimates. Also, Brazil – which a forthcoming presidential election soon – has already raised the amount of sugar-ethanol used in fuel and may soon raise gasoline prices there.

The technical trend for sugar futures is at a crossroad. Sugar futures have technically crossed the uptrend threshold (in my work), but appear to be testing their recent lows. I must approach sugar futures with caution.

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Global Surplus Takes Sugar Futures to 2010 Lows

Sugar futures continue to find new lows as the world’s biggest sugar producer has stepped-up output of the product. Sugar futures are at prices not seen since 2010 now that Brazil has effectively expanded the global “glut” of sugar production.

Brazilian sugar industry group “Unica” claimed yesterday in a report their biggest sugar growing region in the country’s center-south is already producing 4.4% more sugar than this same time last year. Sugar futures have already declined over 27% from this year’s high in March.

Even though the (sugar) harvest in Brazil is starting to slow down, production for this season is still well outpacing demand.  Additionally this is the fourth consecutive season of oversupply of sugar,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her insight regarding the current sugar futures situation.

The technical trend for sugar futures remains down with no bottom yet in sight. We are short sugar futures since last week on this entire last leg down.

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Shortages to Ensure Recovery in Prices Still Not Enough for Sugar Futures

Sugar futures is in a unique situation with “price discovery” with supply and demand, according to the Int’l Sugar Org. They are of the opinion that before sugar prices can recover significantly, global sugar consumption needs to be more than three to four times what the projected supply will be.

The senior economist for the I.S.O. claims the global market should have a surplus of only 1.3M tons starting in October and a small deficit the following year. In October, it will start the fifth-year of a world-wide sugar glut.

Sugar supplies are so high that for sugar prices to recover in any significant way we will need close to a 3-4 million ton deficit in consumption versus supply,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his insight regarding the current sugar futures situation.

The technical trend for sugar futures remains down with no bottom yet in sight. This has become a tricky market in the fact that in can be weeks before sugar futures retraces enough to “sell the rallies.”

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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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Sugar Futures Lower as Kerry Mends US-Mexico Ties for Trade

Sugar futures finished “down” for a fifth day in a row as US Secretary of State Kerry is in Mexico to solidify details for a trading pact throughout the Pacific-Rim. There continues to be an underlying rift between Mexico & the US over sugar (and “steel” amongst other things) which is straining ties between our two countries.

If Secretary of State Kerry is successful in finding common ground in bolstering trade and security, not only with Mexico, but with 10 other Pacific-Rim nations, this will be an economic alliance that is the largest in history. Sugar futures have been in an overall down-trend since late last year in part because Mexico sugar producers are being accused of flooding the sugar market with their product at the US’s expense.

The technical trend for sugar futures is down with a possible bottom in sight. If sugar futures can retain the $0.17 cent support level, and trade higher from here, then this market will be at a crossroad.

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Sugar Futures Grind Lower as Exports From India Slowing

Sugar futures continue to pull-back as shipments of sugar from India – the world’s second-biggest producer of sugar – have slowed after sugar prices reached a 15-month high earlier this year. The largest sugar refiner in India said they are considering “export incentives” in an effort to promote their product, but so far no decision made.

To give you an idea of the sugar export slowdown, India’s exports may total nearly 300,000 tons in the six-month period into September, and when you compare this with the 1.5M tons exported in the six-month period prior, you can clearly see the concern. The slow exports may be supporting sugar prices temporarily, but there are forecasts for a global sugar deficit because of the adverse weather in Australia & Brazil.

The recent drop in sugar futures has begun to taper off as the supply situation remains in question. India’s sugar output for 2014-15 is expected to rise 3 percent but a growing domestic consumption expectation will result in tighter supplies,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the current sugar futures situation. Levy added, “Additionally sugar production out of Brazil shows a large amount of near term supplies but there is much concern over smaller harvest figures for the sugar still in the fields.”

The technical trend for sugar futures remains down. There seems to be volatility on the sugar futures charts down here at these levels that keeps me out of this market.

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Sugar Future Rally on Brazil Sugar Output Seen Cut by Drought

After South American sugar crops were damaged by drought, it appears the sugar output in the world’s largest producing region in Brazil will decline just over 5% this season. Sugar futures have rallied over two-thirds of one-cent since Monday morning.

According to a prominent meteorologist down there, the area that produces the most sugar and ethanol was hit with the driest & hottest summer in seven decades. Sugar mills are expected two lose almost two million metric tons od sugar production because of this.

Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the current sugar futures situation,Sugar futures are slated to rise due to drought conditions in Brazil. Sao Paulo is experiencing the worst drought in decades. Sugar mills are already seeing a 5.2% decline from last season, in the amount of sugar processed.” Levy added,The hope is that larger harvesting area will offset most of the drought difficulties.”

The technical trend for sugar is actually down right now, despite this current rally happening. With a clearer picture for sugar futures unfolding, if the rallying continues we could see a resumption of the overall uptrend on the weekly charts.

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