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The sugar market remains in a steady downtrend, and supportive outside influences have been more than offset by increasing supply on the world market and long liquidation by speculators. The combined spec net long position in the last COT report was still 122,158 contracts but was down from well over 200,000 just a few months ago. India approved 30,000 tonnes of unrestricted sugar exports, which is the first of a total of 500,000 which the government approved on April 19th. India’s production is expected to reach around 25 million tonnes this year, compared with usage of 22-23 million. Thailand’s premiums of cash to futures have slipped to their lowest levels in two months on sluggish demand and a much larger than expected supply from last year’s crop. Thailand officials now expect a record production of 9 million tonnes for the 2010/11 season, up 30% from last year. July sugar closed lower for the third session in a row yesterday, as the market continued to see little benefit from positive outside market forces. The focus is still on a higher supply outlook and sluggish short-term demand. A surge higher in gold and silver and another new low in the US dollar failed to provide support yesterday or overnight. Good weather in Brazil has traders inching up their estimates of Brazil’s sugar production for the coming year. The USDA attache in Brazil pegged the new cane crop at 631 million tonnes, up 2% from last year. Brazil’s weather looks favorable for active harvest over the near-term, with only scattered light storms expected through the weekend.
TODAY’S GUIDANCE: On April 14th, open interest was 636,290 contracts. This has dipped to 597,076, as spec long liquidation selling persists. The short-term technical picture turned more negative with the hook reversal on Monday, and the market looks poised for another move down.
Sugar: Declining Open Interest and Technical Picture More Negative
by Terry Roggensack on April 28, 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 sugar market remains in a steady downtrend, and supportive outside influences have been more than offset by increasing supply on the world market and long liquidation by speculators. The combined spec net long position in the last COT report was still 122,158 contracts but was down from well over 200,000 just a few months ago. India approved 30,000 tonnes of unrestricted sugar exports, which is the first of a total of 500,000 which the government approved on April 19th. India’s production is expected to reach around 25 million tonnes this year, compared with usage of 22-23 million. Thailand’s premiums of cash to futures have slipped to their lowest levels in two months on sluggish demand and a much larger than expected supply from last year’s crop. Thailand officials now expect a record production of 9 million tonnes for the 2010/11 season, up 30% from last year. July sugar closed lower for the third session in a row yesterday, as the market continued to see little benefit from positive outside market forces. The focus is still on a higher supply outlook and sluggish short-term demand. A surge higher in gold and silver and another new low in the US dollar failed to provide support yesterday or overnight. Good weather in Brazil has traders inching up their estimates of Brazil’s sugar production for the coming year. The USDA attache in Brazil pegged the new cane crop at 631 million tonnes, up 2% from last year. Brazil’s weather looks favorable for active harvest over the near-term, with only scattered light storms expected through the weekend.
TODAY’S GUIDANCE: On April 14th, open interest was 636,290 contracts. This has dipped to 597,076, as spec long liquidation selling persists. The short-term technical picture turned more negative with the hook reversal on Monday, and the market looks poised for another move down.
Tags: Softs, Sugar
About Terry Roggensack