Mar ’20 sugar futures follow through yesterday’s negative reversal amid crashing oil prices and Coronavirus precautions. Yesterday’s prices poked higher before reversing down closing negative which is a bearish indicator. The weekly chart looks likely to show a negative reversal as well, an even more significant bearish indicator. This Reversal is strongly tied to the washout in crude oil prices as that impacts the demand for ethanol, and ethanol requires sugar for its production. Sugar has been ready for a correction having become overbought from a technical perspective, the viral outbreak and its impact on related markets was simply the catalyst. From a fundamental perspective this market is still very bullish, and prices are currently holding at a support level (14.43), but we are likely to see prices fall further as many take profit and cover their long positions. In my opinion this pullback could be a great bullish opportunity to buy in at a better price, just be patient and let this situation play out a little further first.
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