SUGAR: Technical Analysis – Brazil reduced sugar shipments

By IFCMarkets

Brazil reduced sugar shipments

In February 2018, Brazil reduced sugar exports to 1 mln tonnes, which is by 0.5 mln tonnes less compared to the same month in 2017. Will sugar quotes advance?

The decrease in exports in February was 19% compared with January of this year. Earlier, the International Sugar Organization (ISO) reduced the forecast of the world sugar production in the 2017/18 agricultural season to 178.7 mln tonnes, compared with 179.45 mln tonnes in the previous review. According to ISO, the main increase in sugar production will be observed in China, the EU, India and Thailand. Accordingly, weather changes in these countries may affect its quotes. Recall that sugar prices began to advance on February 28, when March futures contracts expired. It was assumed that some traders had to close Short positions on the ICE stock exchange. Currently, no price changes are expected and sugar quotes are mainly influenced by the parameters of demand and weather conditions.


On the daily timeframe, Sugar: D1 is rising from its 8-month low. It came out from the downtrend. The further price increase is possible in case of weather worsening in major producer countries.

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  • The Parabolic indicator gives a bullish signal.
  • The Bollinger bands have narrowed, which means lower volatility. They are tilted up.
  • The RSI indicator is above 50. It has formed a positive divergence.
  • MACD indicator gives a bullish signal.

The bullish momentum may develop in case Sugar exceeds the last high at 13.8. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the 8-month low, the lower Bollinger band and the Parabolic signal at 12.8. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level at 12.8 without reaching the order at 13.8, we recommend cancelling the position: the market sustains internal changes that were not taken into account.

Summary of technical analysis

Buy stopabove 13,8
Stop lossbelow 12,8

Market Analysis provided by IFCMarkets