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The fact that there was an upside breakout yesterday may attract increased technical buying over the near term, as fears of further damage to the Australian cane crop and a lack of reasons to expect much change in the tight world supply for the coming year lend support. A firm US dollar trend and concerns with increased violence in Egypt helped to pressure the market overnight into giving back part of yesterday’s strong gains. March sugar closed 135 higher on the session yesterday, up 3.97% to a new 30-year high. Fears of damage to the young cane crop in Australia due to a massive cyclone hitting Queensland helped to spark increased buying and strong gains in the US and London futures. A firm tone in the US dollar was offset by higher trade in energy as well as other agricultural markets. The world stocks/usage ratio is already extremely tight, and the damage to Australia’s cane crop could tighten the outlook further. In addition, the recent tendency for nations to want to increase their stored supplies of food commodities like sugar, rice, vegetable oils and wheat has added to the positive tone. March sugar prices are up as much as 20.1% over the past 10 trading sessions. Traders see about one third of the cane crop in Queensland as vulnerable to the cyclone. That state accounts for about 90% of Australia’s cane production. With the poor weather already seen prior to the cyclone, exports from Australia for the 2010/11 season had been expected to fall to around 2.4 million tonnes from previous estimates of 3.2 million. India’s production is not coming in as well as anticipated in some of its growing areas, offering further evidence that the government there may not allow unrestricted exports anytime soon.
TODAY’S GUIDANCE: The uptrend looks to continue over the near term, as Brazil is in the off season and the new crop is still months away and end users are likely to be a bit more active. This should allow for better commercial buying interest on setbacks.
TODAY’S MARKET IDEAS: Buying support for March sugar comes in at the 34.77-34.52 zone with 36.78 as the next upside objective.
Sugar: Uptrend Looks to Continue Near-Term
by Terry Roggensack on February 3, 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 fact that there was an upside breakout yesterday may attract increased technical buying over the near term, as fears of further damage to the Australian cane crop and a lack of reasons to expect much change in the tight world supply for the coming year lend support. A firm US dollar trend and concerns with increased violence in Egypt helped to pressure the market overnight into giving back part of yesterday’s strong gains. March sugar closed 135 higher on the session yesterday, up 3.97% to a new 30-year high. Fears of damage to the young cane crop in Australia due to a massive cyclone hitting Queensland helped to spark increased buying and strong gains in the US and London futures. A firm tone in the US dollar was offset by higher trade in energy as well as other agricultural markets. The world stocks/usage ratio is already extremely tight, and the damage to Australia’s cane crop could tighten the outlook further. In addition, the recent tendency for nations to want to increase their stored supplies of food commodities like sugar, rice, vegetable oils and wheat has added to the positive tone. March sugar prices are up as much as 20.1% over the past 10 trading sessions. Traders see about one third of the cane crop in Queensland as vulnerable to the cyclone. That state accounts for about 90% of Australia’s cane production. With the poor weather already seen prior to the cyclone, exports from Australia for the 2010/11 season had been expected to fall to around 2.4 million tonnes from previous estimates of 3.2 million. India’s production is not coming in as well as anticipated in some of its growing areas, offering further evidence that the government there may not allow unrestricted exports anytime soon.
TODAY’S GUIDANCE: The uptrend looks to continue over the near term, as Brazil is in the off season and the new crop is still months away and end users are likely to be a bit more active. This should allow for better commercial buying interest on setbacks.
TODAY’S MARKET IDEAS: Buying support for March sugar comes in at the 34.77-34.52 zone with 36.78 as the next upside objective.
Tags: Softs, Sugar
About Terry Roggensack