Mumbai (Commoditiescontrol): ICE raw sugar futures edged lower this week on forecasts for rain in Brazil. The most active October contract closed with loss of 42 points at 19.62 cents per lb. The March contract settled lower by 36 points at 20.32 cents per lb last trading session on Friday.London white sugar was down 0.5% at $506.5/Mt
ICE raw sugar prices cooled off during the week on falling crude oil prices amidst forecast of rains over major cane growing regions of CS Brazil. Somar meteorological has predicted consistent rains in coming week which weighed on the sugar prices in the global market. The rains will aid carry out planting activity and to improve the crop growth and development for late harvest cane as well as next season crop.
Dealers said, sugar is consolidating after hitting a 4-1/2-year high last month, noting weak demand as indicated by spot month raws and whites futures trading at a wide discount to those further out.They added that the sweetener still had a bullish bias, with strong consensus the market will see a deficit in the upcoming 2021/22 season thanks to falling output in Brazil.
Lesser fall in the white prices during the week have helped to improve the White premium as compared to last week. However, with the demand concern for whites due to surging COVID cases in US, EU and Asian countries is likely to keep pressure on the white premium in the short term. On the w/w basis white premium is quoting at 58.7 USD per MT versus 53.6 USD per MT of last week. Moving ahead, White premium is likely to be under pressure in the short term.
CFTC Analysis:
As per the latest Commitment of Traders report net long positions of non commercials are declining trend after a rise for 5 consecutive weeks. Improvement of weather over cane growing regions of CS Brazil has led to log liquidation. As on 31stThe open interest for the week was registered at 1,290,057 vs 1,279,609 contracts last week.
The U.S. dollar fell to a one-month low Friday. To that end, given the jobs report, the Fed may have to place its tapering program on indefinite hold. Moreover, if next week’s reconvening Congress were to pass its $3.5 trillion social/infrastructure bill, it would be seen as highly inflationary and could put more pressure on the dollar.Weak dollar will be supportive for commodities including sugar.
Immediate support and resistance for Sugar #11 lies at 19.33 and 20.05 cents per lb, respectively.
(By Commoditiescontrol Bureau: +919820130172)
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