World Sugar Update

ICE world sugar futures hit 13.25 cents on Friday. Our post last week (as well as many others in recent weeks) stressed the low to mid 12 cent range as a good entry point to increase long positions for March/May, even if only for a short term move.

In our weekly update to clients last week, we noted the crop problems in Brazil's Centre-South as an additional reason to look for these short term opportunities. From our Tuesday update: "Our extended view through March, however, is still calling for less precipitation relative to last year, and this should start to raise a flag when we are setting supply expectations for both current and next crop year. In the near term, the WTI range for fair value March09 sugar is in the 12.55 to 13.1 cent range, and the view for May09 is now between 12.95 and 13.4 cents, with additional short term upside potential."