Mumbai (Commoditiescontrol): ICE raw sugar futures climbed higher this week on reports of lower sugar production in India, Thailand, and China, resulting in heavy short covering in the market. The rally was further supported by new long positions taken by managed money.
ICE July raw sugar finished with a gain of 54 points and a fifth positive weekly close in a row. On Friday, it touched an intraday high of 25.09 cents/lb before giving up most of the gains to close at 24.35 cents/lb. On the other hand, London white sugar August contract closed with a loss of $19.30/MT at $676.40/MT after touching a high of $695.50/MT on Friday.
The surge in sugar prices is partly driven by lower-than-expected production in India and several other major Asian countries. Delays in early harvesting in Brazil, the top exporter, have also contributed to keeping supplies tight. Rabobank noted in a report that if it continues to rain in Brazil, the country may be unable to supply the current red-hot spot market.
The USDA forecasted an 11% increase in China's upcoming 2023/24 sugar production from this season's output, which weighed on sugar prices as it may limit their imports during the second half of this year. Likewise, Brazil's 2023/24 Center-South cane harvest is expected to bring fresh supply to the global export marketplace.
The Commitments of Traders for the week ending April 18 showed that Managed Money traders are net long 226,058 contracts after net buying 5,805 contracts. CIT traders were net long 157,836 contracts after increasing their already long position by 8,429 contracts. Non-Commercial No CIT traders added 2,601 contracts to their already long position and are now net long 157,747.
While the markets are overbought and may witness a correction in the coming days, managed money's fresh long positions suggest that this rally is far from over. The uptrend is likely to resume after a brief correction.
(By Commoditiescontrol Bureau)
0 Comments 
Post Comment 
