Sugar Rallies on Dryness in Brazil, Strength in CrudePosted 01/08/2019 8:36AM CT |
The sugar market started the week spiking higher on Monday, closing at 12.63 and wiping out last week’s loses. Support for sugar came from strength in crude oil with news of Saudi Arabia planning to cut exports as well as continued strength in stocks. Dry conditions in key growing regions of Brazil also added strength with the possibility of a decrease in production for this year. India’s sugar exports are behind government projection levels for the year, a sign of lower production as well. If continued, these events could cut into world supply and cause a longer-term move higher. Funds held a net short position that would accelerate a move higher on short covering. March sugar has put in a near term low, and has reverse the short-term trend to the upside. Resistance comes in at 12.95 with support around 12.50. A close below 12.30 would reverse the trend back to the downside with the most recent low of 11.69 as the target. Look for sugar’s strength to continue as the market builds a longer term trend higher and tests the October highs of 14.24.
Sugar Mar ’19 Daily Chart