SUGAR

After reversing from 35 levels in the beginning of 2011, Sugar price spent the past two years in a correction by pulling back to its long-term trend line. 9 year-long trend support met the price at 19 levels. As price reached the long-term support, downward momentum weakened and relative strength index generated positive divergences on the weekly scale chart. From a long-term perspective sugar prices might be close to forming a major bottom. While it is still early to call for a reversal and a rebound from the long-term support, we should keep a close eye on this commodity for a strong technical action in the following weeks. Breakdown below 19 levels will be negative in the medium/long-term. For the long-term uptrend to resume, sugar price needs to put a bottom at these levels.