This week’s comment finds July sugar futures continuing to consolidate. Midweek price action showed the July contract giving back almost all of the previous days outside up move, closing at 16.50, well into the lower half of the previous day’s range. A surprisingly large number of fund contracts remain on the long side according to the last COT report. How low this market will have to go to get the holders of these contracts to capitulate cannot be known. But, the chart is indicating that the July sugar futures contract is consolidating in preparation for the next leg lower. Without some change in the fundamental situation, discounted though it is, or until the July sugar futures contract can find a way to close over the 18-day moving average more than one day in a row the path of least resistance is lower.
Jul ’17 Sugar Daily Chart