Sugar To Average USc17.50/lb in 2010

We see potential for front-month (July) sugar to bounce strongly in the short term. The contract looks to have established a double-bottom reversal pattern and recently broke above key resistance in the USc16.00/lb area. A weekly close above USc16.00/lb would further improve the technical picture and open the door for a more pronounced bounce towards USc18.00/lb. Given the persistent tightness of the global sugar market, we expect trading to remain volatile in the coming weeks.

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