Sugar #11 Futures Market News and Commentary
Mar NY world sugar #11 (SBH20) on Friday closed down -0.18 (-1.24%) and Mar London white sugar #5 (SWH20) closed down -2.50 (-0.62%).
Sugar prices retreated on Friday and posted 1-week lows on weakness in crude oil prices. Mar WTI crude fell -2.8% Friday to a 2-3/4 month low. Weaker crude prices undercut ethanol prices and may prompt Brazil's sugar mills to divert more cane crushing to sugar production rather than ethanol production, this boosting sugar supplies.
A rally in the dollar index on Friday to a 1-1/2 month high also fueled long liquidation pressure in sugar futures. An extremely large net-long position held by funds makes the sugar market vulnerable to long liquidation pressure. Friday's weekly Commitment of Traders (COT) data showed funds boosted their long positions by 6,510 in the week ended Jan 21 to a record net-long positions of 34,400 (data from 2011).
Sugar prices have rallied sharply over the past three weeks on aggressive fund buying due to... Read more