This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sugar Prices Rebound

NEW YORK ( TheStreet) -- Sugar prices were rebounding Monday morning as long speculators held onto hope of more upside potential for sugar -- though their patience may be wearing thin.

"Despite the decline in sugar prices, many long speculators appear to have been slow to liquidate their long positions," said optionsXpress analysts Mike Zarembski and Rob Kurzatkowski.

"The most recent Commitment of Traders Report shows large non-commercial traders holding a net-long position of 118,862 contracts as of April 26th" -- much less than the record-long positions seen in 2008, but nevertheless a large position.

July sugar futures were rising 1.5% to 20.78 cents a pound, but were down more than 20% year-to-date on stronger supply expectations for Brazil, the world's leading sugar producer, as well as the possibility of more shipments out of India.

"Thailand is looking to sell nearly 177,000 metric tons of raw sugar [this week], and many traders will be awaiting the results of the tender to see how aggressive pricing will have to be to attract buyers," adds Zarembski and Kurzatkowski.

In its latest forecast, the Brazilian Sugarcane Industry Association (UNICA), in conjunction with the Center for Sugarcane Technology (CTC) and other sugar and ethanol producer associations in South-Central Brazil, forecasts that the sugarcane harvest for the 2011 to 2012 period will rise 2.11% to 568.5 million tons from 556.74 million tons in the previous harvest.

However, UNICA cautions that the average productivity could still decline due to aging cane fields, a reduction of sugar cane that has been growing for nearly two years to less than 3% of the total planted area this harvesting year versus 14% this past year, and unfavorable weather.

According to Rabobank's CFTC Commitment of Traders report on May 9, total open interest in agricultural commodity futures and options has declined for a fourth consecutive week to 6.5 million contracts -- the smallest since September 2010.

Meanwhile, money managers registered the largest weekly reduction in their net long position since March 15, down 76,063 contracts. They pared back in all agricultural commodities except sugar, according to Rabobank.

Managed money increased their net long position in No. 11 raw sugar on the Intercontinental Exchange by 2,572 contracts to 98,284 contracts, increasing their share of total open interest to 17.7% -- the largest since August 2010, according to Rabobank.

"Although sugar futures seem poised for further declines, the market may have become a bit oversold in the near-term," said the optionsXpress analysts. Still, "these large speculators may eventually throw in the towel and spark further weakness as their long positions are liquidated."

Food and drink stocks were trading in mixed territory. Kraft Foods (KFT) was down 0.5% to $33.91, The Hershey Company (HSY - Get Report) was flat at $56.06, Magnum chocolate Unilever (UL) was down 0.3% to $32.15 and PepsiCo (PEP - Get Report) was rising 0.6% to $69.71.

Pepsi rival Coca-Cola Company (KO - Get Report) was flat at $66.87 and smaller peer Dr Pepper Snapple Group (DPS - Get Report) was trading sideways at $39.27. Natural soda company Hansen Natural Corporation (HANS) was falling 0.5% to $64.44.

>>Search for Highest Dividends by Rate or Yield
More on Earnings
Today's Top Earnings
Earnings Calendar

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

>To follow the writer on Twitter, go to Andrea Tse.

>To submit a news tip, send an email to:
Copyright 2011 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DPS $89.79 0.00%
HSY $86.91 0.00%
KO $43.36 0.00%
PEP $100.50 0.00%
UL $43.69 0.00%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs