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Sugar No. 16 Futures

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Decoding Sugar: Unraveling its Economic Impact and InterconnectiSugar is undeniably more than just a sweet additive to our food and beverages. It's a global commodity, instrumental in shaping economies and triggering intricate financial behaviors. But what makes sugar a commodity? How does it interact with major economic poles like oil stocks or the inflation rate? Let's dive into the intricacies of sugar as a powerful market commodity. At the core, sugar is considered a commodity due to its widespread use and significant economic implications. Predominantly used in the food and beverage industry, it is equally essential in non-food industries. For example, it is employed as a raw material in biofuel production. Additionally, it is used in pharmaceutical production and textile industries. Such multiplicity in application across varied sectors and geographic regions gives sugar its weight as a globally traded commodity. But, how does sugar, a carbohydrate used primarily in our kitchens, interact with something as significant as oil or the stock market? This might seem perplexing. In financial terms, the price changes in major resources like oil or sugar often form a reflection of the economic health. The interaction of sugar prices with oil stocks, or the stock market in general, is due to commodity indexation where commodities' futures are directly linked to financial markets. Consequently, any fluctuation in the sugar prices implies broader economic changes, including in oil and stocks. Delving deeper into sugar’s price behavior, a unique pattern makes itself apparent. It commences at a significant high, marking between $26 and $30, which aligns with wave B in the Elliott wave principle, a tool often employed in financial forecasting. A transition is projected - a substantial longer-term fall towards $9 that can be mapped out as wave C. In accompaniment with the Elliott wave theory, the Fibonacci retracements offer further insight into this journey. Significantly, the 78.6 and 88 zones in the Fibonacci sequence gravitate as crucial focus points at this low. This dip can be translated into a sharp decline of approximately 70-75% - a striking transformation in the sugar pricing landscape. In contrast, oil walks a different path. Post identifying the peak in the area above $90, a correction of about 50% is anticipated. These meticulously calculated principles not just trace the sugar price trajectory, but also invite us to peek into the strategic interplay between major economic players like sugar and oil. Deciphering these shifts and understanding their significance is vital in appreciating the broader puzzle of the global economy and how sugar, as a commodity, subtly orchestrates it. Now, what about inflation? This stealthy economic culprit has a grip on sugar prices. Sugar prices are subject to inflationary impacts, steering the price trends of this essential commodity. So, any rise or dip in sugar pricing is a strong economic indicator that can inform inflation-related forecasts. Thus, the story of sugar as a commodity is complex, weaving into the fabric of global economy, touching industries far and wide, from food to energy production, from influencing inflation to oil prices and market stocks. The sweet crystals reaching us is but the tip of the iceberg in the intricate economic saga of sugar. Sugar, without question, has a sobering influence on our global economy and daily lives. But, wouldn't it be intriguing if the sugar commodity, in its silent economic language, reveals our shared economic future? Only vigilant observation and comprehensive understanding can tell. Hence, decoding sugar is not just a necessity but an art with potential economic revelations. The bitter-sweet truth is, in the economic labyrinth, we're all part of this sugar story. ChartScope is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber. Technical Analysis Update - Not Financial Advice It's important to note that the following insights are intended for informational purposes only and should not be construed as financial advice. We'll be examining key indicators, chart formations, and potential trends. Remember, making informed decisions requires a comprehensive understanding of the market landscape. Stay informed, stay cautious, and as always, this is not financial advice.
ICEUS:SB1!Short
by ChartScope
Sugar #11; Dire StraitsIt is the case once again for the typical, alternating, virtually daily news bites, decrying "world sugar deficits", "Brazilian yield collapse (due to drought; El Nino)", "record Brazilian Real strength", "rising crude oil prices" versus "record Brazilian harvests", "strengthening USD" and "falling crude prices due to recession fears". The song remains the same. In reality; - Brazilian harvest prospects are doing just fine; - The recent Brazilian Real strength is likely experiencing it's end of days; - Crude oil prices, fundamentally and technically, have a far better chance to turn south than otherwise. (See this post; ) Now, factor in the clearly (very) bearish technical outlook while also noting significant short covering, as of late. E.g., the makings of very favorable SHORT Entry here. The Daily; With last week's 5 strait days of breaking lower.
ICEUS:SB1!Short
by Nemo_Confidat
On a sugar high, owing to weak supplySugar prices have soared this year, up +21.6%1 owing to concerns about tight global supplies. Lower Indian supply coupled with weaker than expected output from Thailand, (at the second and third largest sugar exporters respectively) continue to provide a tailwind for sugar prices. While Brazil’s harvest in the coming months is expected to be strong, logistical hurdles owing to higher exports of soybean and corn could restrict supplies over the coming months thereby supporting sugar prices higher. Net speculative positioning on sugar is 139% above the 5-year average2. Over the past month, short positioning has declined 16% highlighting the improvement of sentiment on the sugar market. Weaker sugar supply from India India is one of the largest exporters of white sugar, but shipments are controlled by quotas. The Indian Sugar Mills Association (ISMA) latest report indicate that Indian sugar production fell marginally to 28.2mt so far this season through 15 March3. ISMA cut its sugar production estimate for 2022/23 crop year to 33.5mn tons from 34.5mn tons on account of lower output and more use of sugarcane for biofuel. Sugarcane processing in Maharashtra, the most important growing state, could end 45-60 days earlier than last year because heavy rainfall has reduced the availability of sugarcane. Sugar production in Maharashtra is likely to total a mere 12.8mn tons according to the chief of State’s sugar commission, nearly 1mn tons less than previously anticipated. Lower sugar output is raising concerns that the India government could restrict additional exports. More use of sugar diverted to India’s Biofuel program At the same time, Indian Prime Minister Narendra Modi is pursuing an aggressive biofuel program that will see more sugar cane diverted to make ethanol to help curb air pollution and reduce oil import bill. The biofuel program also lies in the interest of farmers by making use of excess local production and boosting their incomes. This season, the government plans to divert 5mn tons of sugar to make ethanol, up from 3.6mn tons a year earlier4. The eventual goal is to divert 6mn tons annually toward fuel production by 2025. Lower sugar production in Thailand remains price supportive for sugar Thailand’s Office of the Cane and Sugar board confirmed that Thailand crushed 93.88mt of sugarcane in 2022/23, lower than the initial estimates for more than 100mt of cane5. As a result, the bumper crop expected in Thailand is also falling short, resulting in 2022/23 total sugar output in Thailand will be at around 11mn tons (versus the 12mn tons expected earlier in the season)5. Lower than expected output from Thailand combined with less supply from India remains price supportive for sugar. The front end of the sugar futures curve remains in backwardation yielding a positive roll yield of 2.9% reflecting tightness in the market for short term balances. Logistical bottlenecks could restrict supply from Brazil Looking ahead, progress of the sugar crop in the Centre- South region of Brazil remains a key headwind for sugar prices. Brazil sugar production is expected to be over 36.5mn tons in 2023/24, only slightly less than the all-time high of 38.4mn tons seen in the 2020/21 marketing year6. However, shipping Brazilian sugar could face delays in the Port of Santos as it competes with exports of other Brazilian grains such as corn and soybean. Road freight is also likely to face significant price increases. Santos terminals receive sugar and grains by trains and trucks. However, competition from transporting soybeans has been taking space away from sugar in train cars. Higher freight prices impact the margins of the mills. Likelihood of El Niño, if realised, remains price supportive for sugar With La Niña over, there is now a chance the Pacific Ocean surface could warm later this year and spark what is called El Niño. The US Climate Prediction Centre has raised the likelihood of an El Niño emerging between August and October to 74% from 61% a month ago. One common knock-on effect is higher precipitation volumes which would be positive for sugar prices over the medium term with fewer milling days and sugar production. El Niño could bring relief to drought parched areas of Argentina and southern US, but it could also lead to hotter and drier conditions in parts of Asia and Australia. Conclusion Restricted supply from India alongside lower supply from Thailand have helped sugar along its upward journey so far. Looking ahead, with the Argentinian soybean crop forecasts struggling in the face of the ongoing drought, we expect Brazil to do a lot of the heavy lifting by offsetting the shortfall in supply of both soybean and corn. This is why, logistical hurdles are likely to impede the supply of Brazilian sugar thereby supporting sugar prices higher over the medium term.
ICEUS:SB1!
by aneekaguptaWTE