World Sugar Update
Sugar futures seeing short term support as part of the broader strength in the global commodities complex; raw sugar still in the mid to high 15 cent range. Long positions have increased with most news on the fundamental side still being driven by the shortage in India’s crop, and the subsequent difficulty for the country to meet their domestic demand via increased imports. While dryness in India has moved the market in recent months, we are seeing the opposite.
Early convective activity is signaling and early start to the monsoon season; we discussed the early onset last week, and while this should be a favorable factor for the current crop, adding to balances for both this crop year and the next, the market is taking this as a bullish signal, reasoning that a better crop will further stimulate domestic demand, further exacerbating the domestic supply shortage. While we do not buy into this argument, activity in the short term is likely to remain supportive. The short term view is below the market, keeping Jul09 sugar between 15.25 and 15.5 cents; we still expect to see sub 15 cents well ahead of the July expiration.
More on this topic
(What's this?)
So Much for Workers in India Being Cheaper
(naked capitalism, 8/18/10)
Pour Some Sugar On Your Portfolio
(Investment U, 8/4/10)
Imperial Sugar (NASDAQ:IPSU): One Sweet Sugar Stock
(Wealth Daily, 6/22/10)
