Jul09 ICE sugar futures are back above the 14 cent mark (which is the highest since Oct08) as more uncertainties surrounding India’s stocks, as well as their domestic requirements, have been getting more attention from traders. Increased Indian imports will serve to take additional available sugar off of the physical market by mid year, and this could widen the S-D gap for the end of 2009 into 2010, increasing the global deficit further.

In the short term, the weaker USD will also support sugar; while this should be supportive for most ags, the swine flu outbreak is generating a lot of uncertainty for all commodities. The case could be made that this should be a supportive factor in sugar, but the recent run should temper upside potential. Positions that were entered in mid April should have proven profitable. We do not see long term support for July to remain above 14 cents, and expect profit taking to bring the market back down to a range of 13.5 to 13.8 (Jul) over the coming week.

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This entry was posted on Monday, April 27th, 2009 at 3:04 pm and is filed under Agriculture, Global Commodities, Sugar. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.