Time for Sweet Talk: Sugar Futures

January 23, 2024

Mish's Daily

By Mish Schneider

The biggest mover so far in one month’s time is sugar futures, up over 16%.

As I am a big follower of weather patterns and have predicted weather could be a huge factor on several crops this year, one major concern for sugar is that the current El Nino weather pattern will curtail global sugar output.

Furthermore, India's ban on sugar exports will continue to keep global supplies tight.

This comes after India announced a 50% export tax on molasses from sugar refining.

Monsoons in India (Jun-Sep) fell 6% below average, the poorest monsoon rainfall in 5 years.

Additionally, the Thai Sugar Millers Corp on Nov 1 projected that Thailand's 2023/24 sugar production would fall by -36% y/y to a 17-year low due to a severe drought.

I love to watch sugar as a barometer for food prices (it’s in practically every processed food product) and as a bellwether for social unrest and inflation.

Folks will fight over sugar when there are shortages, and it is not even Valentine’s Day yet.

As more and more reports claim inflation is over, the sweet white stuff is worth watching.

CANE, the ETF for sugar has rallied into some resistance at the 200-day moving average.

However, it has handily cleared the January 6-month calendar range high making the trend higher for longer seem obvious.

CANE outperforms SPY and while momentum has been just ok, with further price rises, we could see momentum kick in.

On the March 2024 futures chart, 23.00 is support while 24.00 is resistance.

Most noteworthy is the notion of super cycles.

Sugar is a great example of a 400% move higher since 2020, followed by a near 40% move lower. And currently, a 20% move up since it reached the nadir of 20.00.

Volatility-yes-the inherent nature of a super cycle.

Has the next wave begun?

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Coming Up:

January 24 Yahoo Finance

January 25 Live Coaching

January 25 F.A.C.E with Dale Pinkert

January 25 CNBC Asia

February 2 Benzinga Pre Market Show

February 5 Money Show Life with Chuck Jaffe

February 21-23 The Money Show in Las Vegas

Weekly: Business First AM, CMC Markets

ETF Summary

S&P 500 (SPY) 480 now the pivotal zone

Russell 2000 (IWM) 195 pivotal, 190 support to hold