Sugar Futures Building Strength on Production ConcernsPosted 07/31/2019 2:54PM CT |
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.