Sugar Fundamentals Read Bullish, Chart Action Markedly BearishPosted 07/03/2019 7:30AM CT |
This week’s comment finds the October sugar futures contract under pressure technically. Fundamentally, the bullish case is well known and on display in the wire services. Hightower today, laid out how sugar cane continues to be converted to ethanol in Brazil. Also, dryness in sugar producing regions in India could likely impact totals for the year there. The wild card in this well-defined fundamental picture is near record large deliveries of physical sugar against futures contracts, according to Hightower. For long time sugar watchers this is a familiar scene. Projections for less sugar in the future countered by ample sugar supplies in the present. Pressure from the energy markets rolling over today did not help buoy sugar prices. At last glance crude oil was down well over 2 full points on the day. Technically, sugar has been bouncing around the 50-day moving average, 12.49. The October sugar futures contract appeared to be on the verge of an upside breakout but is now taking out swing lows three sessions later. We will see for sure in coming sessions, if sugar is just under the influence of this large physical delivery or a new down-trend is in the works.
Sugar Oct ’19 Daily Chart