“Sugar futures have rallied off recent lows the past several weeks on concerns that the market would return to a deficit this season. However, the rally may be facing some headwinds, as dry weather in Brazil, the world’s leading Sugar cane producer, has allowed producers to get a good start to the harvest for the 2016-17 season,” according to OptionsExpress.

Moreover, Brazilian producers are also converting more sugar into ethanol to meet rising demand for biofuel, especially after the steep depreciation in the Brazilian real has made U.S. dollar-denominated crude oil costlier for domestic users.

“The market is still generally in a bullish trend, as prices remain above both the 20- and 200-day moving averages. The 14-day RSI has begun to level-off from much stronger momentum readings the past several sessions and is now reading a more neutral 55.94. Chart support is seen at the April 20 low of 15.01, with resistance found at the April highs at 16.09,” adds OpionsExpress.

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iPath Bloomberg Sugar Subindex Total Return ETN