July 2 (Bloomberg) -- Raw sugar, up 50 percent this year, may extend gains to levels not seen since 1981, Mizuho Corporate Bank Ltd. said, citing trading patterns.
Raw sugar may undergo a “dramatic squeeze” through the Feb. 3, 2006, high of 19.73 cents a pound to the 20.25/21.50 cents area or higher, before a “dramatic reversal,” Nicole Elliott, London-based senior technical analyst at Mizuho, wrote in a note yesterday.
Raw sugar has traded around a mean of 10 cents per pound for almost 40 years, Elliott wrote. “Though overbought, bullish momentum is close to some of its strongest levels this decade and we therefore feel it has further rallying to do,” she said, without giving a timeframe.Speculation about declining output in India, the world’s second-largest producer and biggest consumer of the sweetener, has helped boost prices this year. Monsoon rains, the main source of irrigation for India’s 235 million farmers, were 54 percent below normal between June 1 and June 24, the country’s weather office said June 25.
Raw sugar last rose above 20 cents a pound in 1981, reaching 33.85 cents that year. The benchmark number 11 futures contract in New York climbed to 66 cents on Nov. 21, 1974, the highest since at least 1960. The most-active contract for October delivery fell 0.6 percent to close at 17.75 cents a pound yesterday.
Last Updated: July 1, 2009 22:37 EDT FUTURES AND OPTIONS TRADING INVOLVES SIGNIFICANT RISK OF LOSS AND IS NOT SUITABLE FOR EVERYONE. VFM tracking number 132210
