Is sugar still in a bull market_ _ seeking alpha

The price of sugar had more than doubled since August 2015 when it traded at 10.13 cents per pound. History of sugarcane At that level, sugar sold at the lowest price since June 2008 when the price moved to lows of 9.44 cents. Australian sugar industry In October 2016, the price of the sweet commodity peaked at almost 24 cents per pound and then entered a correction period where it found a bottom at 17.84 cents and then consolidated between 20 and 21 cents from early January through late February.

Sugar is a staple commodity that many governments around the world subsidize making funds available for producers. Sugarcane juice for diabetic patient Sugar production comes from two sources, sugar beets and sugar cane. Sugar cane press for sale The world’s leading producer of sugar cane is Brazil where there are no subsidies, and the growers depend on the world free market price for the agricultural commodity.

Sugar number 11, or world sugar, trades on the Intercontinental Exchange and the price of the sweet commodity can be highly volatile.

Sugarcane bagasse uses Over the course of history, sugar futures have traded as high as 66 cents per pound in 1974 and reached peaks of 45.75 cents in 1980, and 36.08 cents per pound in 2011. Sugarcane bagasse composition In 1985, the price of sugar futures fell to lows of 2.29 cents per pound. Sugarcane ethanol As you can see, the free market price of sugar is subject to volatile price swings, so the move from just over 10 cents to just under 24 cents from August 2015 through October 2016 is more of the norm rather than the exception.

Recently the price of sugar has run into some selling, and it now appears that the rally to the 24 cent level has failed over recent months. Process of making sugar from sugarcane in sugar factory The question has become: is sugar still in a bull market?

The bull market that took sugar from 10.13 cents to almost 24 cents per pound since the August 2015 lows ran out of steam in early October 2016. Picture of sugarcane plant Source: CQG

As the weekly chart illustrates, ICE sugar futures fell from highs of 23.90 cents in October to lows of 17.84 cents per pound during the week of December 12, 2016. High fructose corn syrup vs cane sugar A rebound and period of consolidation followed, and the sweet commodity found itself in a trading range from 20 to 21 cents from the beginning of 2017 through late February. Uses of sugarcane juice The price has since failed, falling below the low end of the range and was trading at just over 18 cents per pound on March 14.

Significant support for sugar currently stands at 17.84 cents per pound. Is sugarcane juice fattening The slow stochastic tells us that the weekly trend is now lower and we could see a test of those lows or perhaps even a new low in the market in the weeks ahead. Growtopia sugarcane Source: CQG

On the monthly chart, the trend shifted to the downside in October when sugar failed to climb above the 24 cents per pound level. Sugar cane machine price in india The weekly and monthly charts are signaling a downtrend in the price of the sweet commodity after the fantastic rally that caused the price to double in value. Is sugarcane juice healthy However, on the weekly chart, notice that open interest has declined from over 866,000 contracts to under 770,000 during the March-May roll period for the futures. Is sugarcane healthy Declining open interest and falling prices do not present technical validation for an emerging bearish trend which means that we are likely in a corrective period. Raw sugar vs brown sugar The supply and demand fundamentals for sugar tend to favor a correction rather than a bear market for the price of the soft commodity at this time.

Perhaps the main reason that sugar doubled in price was that the lowest price since 2008 at the 10 cent level caused production to slow and demand to rise. Raw sugar vs refined sugar Recently, Green Pool Commodity Specialists, a research firm specializing in soft commodities, forecasted a surplus for the sugar market in the 2017-2018 crop year that begins in October. Benefits of sugarcane juice for weight loss The surplus will come from improved output in Brazil, India, and other parts of Asia. Sugarcane juice machine price in mumbai The European Union will also lift its caps on sugar exports in October adding to supply. Largest producer of sugar in the world 2015 However, the prospects for bumper sugar supplies depend on the cooperation of Mother Nature. Candy cane sugar scrub Meanwhile, action in other markets continues to weigh on the price of sugar as well.

The high level of the U.S. Sugar cane train maui dollar is a negative for all commodities prices and sugar is no exception. Sugar cane alley There is a historical inverse relationship between the price of sugar and the dollar which is the benchmark pricing foreign exchange instrument for most commodities. Plant sugar cane minecraft Source: CQG

As the monthly chart of the dollar index highlights, the dollar has been in a bull market since 2014. Sugar or honey At 101.625 the dollar is about 2 points off its January 2017 highs which was the highest level since 2002. Caster sugar vs cane sugar A strong dollar is one factor that weighs on the price of sugar; another is the price of crude oil.

In the United States, corn is the primary ingredient in ethanol production because the nation is the world’s leading producer of the grain. Sugar and cancer 60 minutes However, in Brazil, the world’s leading sugar producer, the input for ethanol production is the sweet commodity. Sugar and cancer mayo clinic Source: CQG

Crude oil had been trading above the $50 per barrel level since late November, but recently it broke down from its trading range and fell to under $48 per barrel. Sugar liquid As the price of oil moves lower, the demand for sugar-based ethanol in Brazil is likely to decline which will make more of the sweet commodity available for export causing the expected surplus to increase.

Sugar is facing lots of bearish factors that could send the price below critical support at the 17.84 cent level in the trading sessions ahead, and it could fall as low as 15 cents per pound, a level not seen since April 2016. Sugar and cancer link However, Mother Nature will be the ultimate arbiter of the price of sugar cane over coming months.

Like all agricultural commodities, sugar cane depends on favorable growing conditions. Sugar and cancer cells Drought, floods, excessive heat or cold can damage a crop and each year is always a new adventure when it comes to sugar production.

Right now, all signs are that sugar futures are heading lower for a test and a potential break below critical support at just under 18 cents per pound and the bull market is in jeopardy. Sugar cosmetics review However, that could change if a sudden period of bad weather causes a change in harvest forecasts for the coming year. Sugar eyeliner Expect lots of volatility in the sugar market over the coming weeks and months. Sugar pines apartments Now that it has broken out of the 20-21 cent trading range, the trading ranges in this commodity that has a long tradition of high volatility are likely to get wider and wilder.

I have introduced a new weekly service through Seeking Alpha Marketplace. Sugar pine realty Each Wednesday I will provide subscribers with a detailed report on the major commodity sectors covering over 30 individual commodity markets, most of which trade on U.S. Sugar pine christian camp futures markets. Sugar pine reservoir The report will give an up, down or neutral call on these markets for the coming week and will outline the technical and fundamental state of each market. Sugar pine campground At times, I will make recommendations for risk positions in the ETF and ETN markets as well as in commodity equities and related options. Sugar pine cones You can sign up for The Hecht Commodity Report on the Seeking Alpha Marketplace page. Sugar sugar games free Additionally, check out my website for more information about commodities.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. Corn syrup vs sugar I am not receiving compensation for it (other than from Seeking Alpha). Sugar pine tree I have no business relationship with any company whose stock is mentioned in this article.

Leave a Reply

Your email address will not be published. Required fields are marked *