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!
With solid support from outside market forces such has high energy prices and a weakening US dollar, the market has been able to resist another leg down for now. Talk of the oversold condition of the market and some talk that the Brazilian harvest will be delayed have helped to support prices. The sugar market managed a higher high yesterday but was unable to fully return to this week’s high. The market also saw some minor buying off concerns of delays in the Brazilian harvest, as that might serve to tighten supply up front. Other traders think that the eventual flow of Brazilian sugar will quickly limit near term gains and perhaps facilitate a return to the general pattern of weakness that has been in place since the February highs. The latest forecast calls for rains to continue across the main sugar growing areas in Brazil, which would continue to delay the harvest. There are also concerns that the cloudy and rainy weather that the region has experienced since the second half of February could have hindered the crop’s growth. Technical traders are pointing to a reversal on the charts, with the May contract making a new low for the move and then closing higher with an outside day up. The European Union has approved the export of 650,000 tonnes of out-of-quota sugar for the 2011/12 season. This move could encourage beet planting this season.
TODAY’S GUIDANCE: The market seems to have the supply fundamentals to trend lower over the near-term, and speculators still hold a hefty net long position, so selling could increase if support is violated. However, outside market forces are positive, and the action yesterday argues for some consolidation just ahead.
TODAY’S MARKET IDEAS: May sugar support comes in at 26.55 with 28.26 and 28.92 as resistance.
Sugar: Near-Term Bearish Supply News Facing Bullish Outside Forces
by Terry Roggensack on March 25, 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!
With solid support from outside market forces such has high energy prices and a weakening US dollar, the market has been able to resist another leg down for now. Talk of the oversold condition of the market and some talk that the Brazilian harvest will be delayed have helped to support prices. The sugar market managed a higher high yesterday but was unable to fully return to this week’s high. The market also saw some minor buying off concerns of delays in the Brazilian harvest, as that might serve to tighten supply up front. Other traders think that the eventual flow of Brazilian sugar will quickly limit near term gains and perhaps facilitate a return to the general pattern of weakness that has been in place since the February highs. The latest forecast calls for rains to continue across the main sugar growing areas in Brazil, which would continue to delay the harvest. There are also concerns that the cloudy and rainy weather that the region has experienced since the second half of February could have hindered the crop’s growth. Technical traders are pointing to a reversal on the charts, with the May contract making a new low for the move and then closing higher with an outside day up. The European Union has approved the export of 650,000 tonnes of out-of-quota sugar for the 2011/12 season. This move could encourage beet planting this season.
TODAY’S GUIDANCE: The market seems to have the supply fundamentals to trend lower over the near-term, and speculators still hold a hefty net long position, so selling could increase if support is violated. However, outside market forces are positive, and the action yesterday argues for some consolidation just ahead.
TODAY’S MARKET IDEAS: May sugar support comes in at 26.55 with 28.26 and 28.92 as resistance.
Tags: Softs, Sugar
About Terry Roggensack