Sugar Price Bounce Off Lows On Weather ConcernsOptions Xpressupdated Jun 08, 2012TweetAt GET.com we maintain complete editorial integrity on our content & provide transparent & unbiased information. Companies don't pay us to include their products although we receive a compensation when you successfully apply to products from our partners. See how we make money here.At GET.com we maintain complete editorial integrity.Friday, June 8, 2012 Both front month world raw Sugar futures (traded in New York) and white Sugar futures (traded in London) are now trading at a premium to the next contract month out. This may be a sign that global supplies are becoming tight and prices may need to rise, at least in the near-term, to draw out supplies to meet current demand.Fundamentals Sugar futures have rebounded sharply during the past few sessions, with the lead month July futures once again attempting to trade above the 20-cent level. Heavy rainfall has put a halt to the Brazilian sugarcane crush, and many traders now fear that near-term supply issues may occur. This is being reflected in the spread market, as the soon-to-be-expired July futures are now trading at a premium to the October futures, which can be viewed as sign that supplies are becoming tight and buyers are willing to pay a premium to obtain immediate supplies. In order to extend the price rebound, traders likely will need to see signs that the global economic environment is stabilizing, which so far has not necessarily been the case. However, the recent announcement of an interest rate cut by the People's Bank of China and possible stimulus measures by the Federal Reserve may start to steer traders back towards commodities and other "risk" assets. Small speculators have been holding a record net-short position in Sugar futures, and should we start to see prices forming a bottom, a significant short-covering rally may not be out of the question.Technical Notes Looking at the daily chart for July Sugar, we notice prices attempted to move above the 20-day moving average, however late session selling sent prices back below this widely-watched indicator the market closed back below the 20-cent level. Trading volume was extremely high on Thursday, mostly due to a move above 2-week highs, but also due to a high volume of spread trading, as positions are being rolled out of July and into the October contract. The 14-day RSI has moved to neutral territory, with a current reading of 43.61. The recent high made on May 7th at 21.17 looks to be the next major resistance point for July Sugar, with support found at the June 4th low of 18.86. Mike Zarembski, Senior Commodity AnalystEditorial Disclosure: Any personal views and opinions expressed by the author in this article are the author's own and do not necessarily reflect the viewpoint of GET.com. The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the companies mentioned, and have not been reviewed, approved or otherwise endorsed by any of these entities.