• After moving higher due to technical (computer driven) trading the market has struggled to remain supported. 
  • We saw selling from Thai producers in the rally and think Indian refiners would be hedging above USD350/mt. 
  • While there has been little fresh bearish news, crops in India and Thailand are progressing at a record pace with stocks increasing to problematic levels in both origins. 
  • On top of this, if prices strengthen Brazilian mills will produce more sugar from their available cane at the expense of ethanol. 
  • It is therefore difficult to see the market move past highs seen in October.

 

 

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Oliver Chapman

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