Sugar is one of the world’s most traded commodities.
Since the beginning of 2019 Sugar prices increased a merely 2.35% or 0.28 Cents/LB.
10 Year chart
Sugar No. 11 is an extremely popular global sugar product, used in food and candy, rum, and even the fuel additive ethanol. The biggest producer and exporter of sugar in the world is Brazil followed by India, European Union, China, Thailand, and the United States.
Sugar is expected to trade in a range $11 to $12 this year, according to analytics.
You need to take deeper dive and look at additional drivers of sugar prices, such as global sugar stocks (inventory), inflation, the USD UD, weather conditions, oil prices etc.
For instance, oil is an important factor that affects the price of sugar because sugar can be considered an energy source. The value of an energy source depends on the caloric value of the source and the energy price. The latter is dominated by the oil price.
Ethanol competes with gasoline in the transport fuel market. Thus, a decrease in gasoline’s price will also mean a decrease in ethanol prices and hence less demand for sugar cane to produce ethanol, thus potentially an oversupply of raw sugar and an abundance of raw sugar will bring sugar prices down.
Our most recent view on oil is to be found here.
How are the Technicals looking for sugar?
On a monthly chart, we can notice a triple bottom technical formation, suggesting a possible trend reversal, but the downtrend remains strong.
Fibonacci levels in the chart above worthy attention are 23.6 and 38.2
On the longer-term chart, we see a strong support line (yellow), RSI on the big 50 level, and it is possible that RSI and price movement have formed divergence. Historically, sugar reached an all-time high of 65.20 in 1974 and a record low of 1.25 in 1967, 52W High is 14.6 and 52W Low is 11.18