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Weekly: ICE Sugar Ends Up On Bullish USDA Data; Short Covering

24 Nov 2019 9:31 pm
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MUMBAI(commoditiescontrol) – Raw sugar prices on the Intercontinental Exchange ended marginally up last week on bullish supply and demand report published by USDA and short-covering by speculators. On the other hand, ICE London white sugar was also up from the previous week close.

The most tracked, Sugar no 11 or the March 2020 contract ended up 7 points at 12.57 cents, while the London Mardh20 white sugar ended up $3.2/MT at $339.90 a tonne.

Sugar prices rallied to a 1-week high on Friday after the USDA in its bi-annual sugar report on Thursday afternoon forecast that global 2019/20 sugar production will drop 3.2% year on year to 174.1 MMT and that global 2019/20 sugar ending stocks will fall -9.9% y/y to 49.58 MMT. The USDA projects that global 2019/20 sugar consumption will climb 0.8% y/y to 174.684 MMT.

The latest CFTC data showed that managed money traders reduced their short position substantially this week. This week they reduced their net short position by 57,880 contracts to 1,38,729contracts. Whereas trade added 55,623 contracts to their previous week's net short position to 81471 contracts.

With news of global deficit in production in 2019/20 getting prominence managed money is gradually covering their short position last week they reduced their short position by almost 29%. We may see further short covering by managed money and in fact, we may see them going net long in near future this will be supportive for the market. Along with this factor stability in Brazil Real may help markets to rally in the coming weeks.

Support and resistance for the March contract are 12.50-13 cents/lb .


       
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