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The technical action in sugar looks weak, especially when considering the strong gains this week in many other commodity markets. Sugar seems to have the fundamental setup to push higher this year, but speculative long liquidation selling seems to be an obstacle. The lack of urgency from buyers may be seen as a negative force. Russia has set the import tariff for raw cane at $140 per tonne for February, which is unchanged. March sugar saw a strong rally early in the session yesterday to its highest level since January 4th before long liquidation selling emerged to drive the market sharply lower on the day. The volatility continued into the second half of the trading session, as the market then saw a rally of 110 points off of the lows into the close. Futures ended the session closing moderately lower on the day but near the middle of a 243 point range. Even a sharp break in the US dollar and higher energy and agricultural markets failed to provide much support, as traders indicated that technical selling was active. In the US Supply/Demand report, a lower production estimate pushed the new stocks/usage ratio for the 2010/11 season to 12.6%, down from 13.4% last month and 13.3% last year. Ideas that India is backing away from aggressively exporting sugar and talk that China will need to be a more aggressive buyer ahead has helped to provide some underlying support.
TODAY’S GUIDANCE: Perhaps the fund long liquidation and rebalancing selling will slow after today and the market will be in better shape to see a resumption of the uptrend. Support for March sugar is at 31.52 with resistance at 32.76 and 33.85. A resumption of the uptrend leaves 36.78 as next upside objective.
TODAY’S MARKET IDEAS: Consider buying into support.
Sugar Market Commentary – 2011.01.13
by Terry Roggensack on January 13, 2011
Below is a sample of The Hightower Report’s Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
The technical action in sugar looks weak, especially when considering the strong gains this week in many other commodity markets. Sugar seems to have the fundamental setup to push higher this year, but speculative long liquidation selling seems to be an obstacle. The lack of urgency from buyers may be seen as a negative force. Russia has set the import tariff for raw cane at $140 per tonne for February, which is unchanged. March sugar saw a strong rally early in the session yesterday to its highest level since January 4th before long liquidation selling emerged to drive the market sharply lower on the day. The volatility continued into the second half of the trading session, as the market then saw a rally of 110 points off of the lows into the close. Futures ended the session closing moderately lower on the day but near the middle of a 243 point range. Even a sharp break in the US dollar and higher energy and agricultural markets failed to provide much support, as traders indicated that technical selling was active. In the US Supply/Demand report, a lower production estimate pushed the new stocks/usage ratio for the 2010/11 season to 12.6%, down from 13.4% last month and 13.3% last year. Ideas that India is backing away from aggressively exporting sugar and talk that China will need to be a more aggressive buyer ahead has helped to provide some underlying support.
TODAY’S GUIDANCE: Perhaps the fund long liquidation and rebalancing selling will slow after today and the market will be in better shape to see a resumption of the uptrend. Support for March sugar is at 31.52 with resistance at 32.76 and 33.85. A resumption of the uptrend leaves 36.78 as next upside objective.
TODAY’S MARKET IDEAS: Consider buying into support.
Tags: Softs, Sugar
About Terry Roggensack