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August white sugar futures in London managed to push to the highest level since March overnight and strength in other commodity markets on less focus on European debt situation and more focus on potential growth in demand from emerging markets has helped support the rally this week. The strong gains in energy prices and news that ethanol production in the US is on the rise added to the bullish tone for the market. October sugar closed slightly higher on the session yesterday but well off of the highs. The market found support from outside forces with solid gains in energy markets, a strong rally in US equities and a sharp break in the US dollar helped to support. The USDA supply/demand update and a firm demand tone for spot sugar helped to provide some support. For the 2010/11 season, US ending stocks are expected to decline to 764,000 tonnes from 844,000 in May. This compares to 1.15 million tonnes for 09/10 and 1.499 million in 08/09. This may lead to increased import demand from the US for the coming season. Supply news is mixed as Brazil continues to see a surge higher in production for the coming season and weather remains favorable for cane harvesting. Industry executives in India have reported that 2009/10 sugar production in India could reach 19 million tonnes which is up near 3 million from expectations earlier this year and up near 1 million from recent views. Tightness in India was expected to be a driver of the market earlier this season but a steady revision higher in production since last fall has helped to ease tightness concerns. China tightness may take over in the 2010/2011 season if sugar production does not begin to improve. China refined sugar production in May fell 14% to 184,000 tonnes which pushed January to May production to 7.96 million tonnes, down 18% from last years pace.
TODAY’S GUIDANCE: With better outside market forces and higher energy prices, sugar has seen solid buying support this week as end user buyers are more active. There are longer-term supply issues with this market but short-term pent-up demand looks solid and supply is still relatively tight.
TODAY’S MARKET IDEAS: Aggressive short-term traders can look for a continued bounce. Short-term support comes in at 15.33 for October sugar with 15.88 and 16.40 as near-term resistance. Look for rally to the 16.40-16.58 zone.
Sugar Market Commentary – 2010.06.11
by Terry Roggensack on June 11, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
August white sugar futures in London managed to push to the highest level since March overnight and strength in other commodity markets on less focus on European debt situation and more focus on potential growth in demand from emerging markets has helped support the rally this week. The strong gains in energy prices and news that ethanol production in the US is on the rise added to the bullish tone for the market. October sugar closed slightly higher on the session yesterday but well off of the highs. The market found support from outside forces with solid gains in energy markets, a strong rally in US equities and a sharp break in the US dollar helped to support. The USDA supply/demand update and a firm demand tone for spot sugar helped to provide some support. For the 2010/11 season, US ending stocks are expected to decline to 764,000 tonnes from 844,000 in May. This compares to 1.15 million tonnes for 09/10 and 1.499 million in 08/09. This may lead to increased import demand from the US for the coming season. Supply news is mixed as Brazil continues to see a surge higher in production for the coming season and weather remains favorable for cane harvesting. Industry executives in India have reported that 2009/10 sugar production in India could reach 19 million tonnes which is up near 3 million from expectations earlier this year and up near 1 million from recent views. Tightness in India was expected to be a driver of the market earlier this season but a steady revision higher in production since last fall has helped to ease tightness concerns. China tightness may take over in the 2010/2011 season if sugar production does not begin to improve. China refined sugar production in May fell 14% to 184,000 tonnes which pushed January to May production to 7.96 million tonnes, down 18% from last years pace.
TODAY’S GUIDANCE: With better outside market forces and higher energy prices, sugar has seen solid buying support this week as end user buyers are more active. There are longer-term supply issues with this market but short-term pent-up demand looks solid and supply is still relatively tight.
TODAY’S MARKET IDEAS: Aggressive short-term traders can look for a continued bounce. Short-term support comes in at 15.33 for October sugar with 15.88 and 16.40 as near-term resistance. Look for rally to the 16.40-16.58 zone.
Tags: Softs, Sugar
About Terry Roggensack