FUNDAMENTALS

Sugar markets remained quiet with prices steady at the lower levels on lack of offtake and subdued trading activity. Prices are expected to crash further once the crushing gains momentum and market is weighed down by fresh supplies. However, delayed crushing, anticipation of a lower crop next season and fresh export orders are supporting the prices in the short term. No major price advances are likely till 2009 as the domestic and global market reels under surplus supplies. The global prices are finding support in the rising crude oil prices, which would result in diversion of more cane to ethanol, surging Asian demand and sluggish Brazilian sugar outlook.

TECHNICALS

A bullish marubozu formed in the charts with prices closing well above the short term EMAs suggest firmness; as does breaching the resistance level of 1283. The uptrend is supported by an upward bound RSI and Stochastic in the overbought zone. MACD is rising in the positive territory, indicating increase in bullish momentum. Overall, technicals suggest a firm market. Sugar is likely to trade firm in the next session with some late profit booking. However, the market is extremely overbought and a technical correction is due any moment. Hence, trade with caution.

WEATHER

Late season rains in the north and south India aid developing sugarcane crop.

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