How Low Are Sugar Prices Going ?

Sugar Futures---Sugar futures in the July contract is currently trading lower by 17 points at 11.45 continuing its bearish momentum hitting a fresh 8 month low despite the fact that crude oil prices continue their bullish momentum which generally supports sugar, but that is not the case at this time.

Conab projects that Brazil 2019/20 sugar production will climb by +17.4% which is one of the main reasons for the bearish trend coupled with the fact of weak demand as this trend is getting stronger on a weekly basis. I have been recommending 2 short positions with an average price of 12.06 and if you took those trades place the stop loss above the 10 day high which now stands at 12.15, however in Thursday's trade that will be lowered to 12.06 as the monetary risk also will be reduced.

The Commitment of Traders report was released last Friday and it showed that the large money managed funds increased their net short position which now stands at 157,000 contracts as they added nearly 35,000 more last week as they still believe lower prices are ahead and I agree with them so continue to play this to the downside while placing the proper stop loss.

As I have talked about in many previous blogs as I think the September 27th low of 11.10 will be tested soon and if that is broken we could hit the multi-year low around the 10.00 level in the coming weeks ahead is there is room to run.

TREND: ---LOWER

CHART STRUCTURE: IMPROVING

VOLATILITY: LOW

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