Softs

Sugar Futures Building Strength on Production Concerns

Posted 07/31/2019 2:54PM CTEric Scoles

October’19 sugar futures start the day continuing to fight for gains after the July 23rd hammer down and rally, supported by production uncertainties. The top two sugar producing nations (India and Brazil) both are demonstrating issues. India has been struggling notably with weather related issues and Brazil is 3.99% behind last season on cane crushing with overall sugar production behind by 10.80% behind last season and recent gains in the energy markets supporting a drive towards ethanol production. With an anticipated growth in global consumption and a decline in production there is a solid possibility that there will be a sizeable deficit. The charts indicate the trend is becoming bullish having a close over the 18-day moving average, and divergence between the price trend and momentum suggest there could be an impending breakout. Sugar futures could become a strong performer for bulls if prices break resistance in the short term and production uncertainties start becoming realities.

Sugar Oct ’19 Daily Chart

Eric Scoles

Eric entered the workforce during the summer of 2007 as an apprentice tradesman just before the big crash and recession which followed. The impact of which strongly inspired his interest in the financial industry and began him as a student of the markets. Eric worked throughout the following years developing strong communication skills and risk management practices in the aviation and marketing industries before ultimately getting licensed and turning his passion into a career as a market strategist with RJO Futures.