MUMBAI(commoditiescontrol) – Raw sugar prices on the Intercontinental Exchange ended up last week with on forecast of production deficit in 2019/20 but gains were limited due selling by Brazilian producers due to weak Real. On the other hand, ICE London white sugar was almost unchanged from the previous week close.
The most tracked, Sugar no 11 or the March 2020 contract ended up 16 points at 12.57 cents, while the London Mardh20 white sugar ended up $.4/MT at $336.70 a tonne.
Brazil was an aggressive seller in the global market for October due to weak real. In the month of October were 1.791 million tonnes the highest for the year. But this pace is likely to slow down as crushing for most of the mills is stopped by now fo this season. With funds holding huge short position this factor could trigger short covering and we may sea break out from thThis could be supportive of the prices.
The latest CFTC data showed that managed money traders’ continued to reduce their short position this week also. This week they reduced their net short position by 20,126 contracts to 1,96,609 contracts. Whereas trade added 9,145 contracts to their previous week's net short position to 25,848 contracts.
Since February 2018 to date market is trading in the range of 13.42 in the upper side and 10.85 cents/lb on the lower side. Prices were in the consolidation phase because of excess production and stocks in the global market, mainly in India. Now with the global deficit in production this excess stock is likely to get absorbed. Decreasing global supplies may trigger short-covering by funds who are holding a huge short position if it happens so we may see a break out from this range in the coming months.
Support and resistance for the March contract are 12.06-12.93 cents/lb .
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