It's been a manic start to the week for commodities and currencies...deflation was "back" yesterday, with investors running back to the dollar...and today inflation was the focus, with the dollar getting dumped!
Last evening, we observed that sugar was standing tall amidst an across the board selloff in commodities. Well today, that strength carried through in a big way - with sugar up nearly a full cent on the day!
July sugar futures closed the day a shade under 16-cents, which was exceeded briefly this April and May. The October contract closed near 17-cents, a high on the year. If this jump holds, we'll be looking at picking up an October sugar contract on this mega-breakout.
Sugar me sweet, baby. (Source: Barchart.com)
What are the fundamentals driving this? The supply/demand deficit that has been on the radar screen since earlier in the year.
Caution is warranted, though, as a pullback in oil could send some of the hot money to the exits just as fast as it appears to be pouring into sugar. But for now, the market seems to be telling us that the sugar bull is back!