SaxoTV

Hansen: Sugar tasting sweeter while coffee gets a brea

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Saxo's Ole Hansen says the weakness seen in the Brazilian real is starting to fade. That's helping commodities like sugar which have been hit over the last nine months. He explains that demand for this soft is on the rise as demand for ethanol in Brazil increases. He also points out that it's driven by weather related worries over production in both Brazil and India.

Hansen says the market has witnesses the largest long position in sugar in 14 months and looks at the key levels.

Coffee is also starting to recover, he says, but he points to the differences between these two softs. While sugar is being driven by new longs, coffee is being supported by short covering. But as some have been scaled back, he wonders whether there's enough 'gas left in the tank' for coffee to move higher.