Sugar futures continue to show strength alongside the rest of the tropical commodities market. Sugar has led the bull market in this sector, setting multi-decadal highs as cotton, cocoa, and coffee also test the upper boundaries of their historical ranges. As the sugar producing countries of the world contend with domestic shortages and rationing, the world market is holding steady near 30 cents per pound, more than three times the price of just 2 years ago.

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With virtually no technical indications of weakness in the tropical commodities markets, the potential for a resumption of the uptrend in sugar remains quite high. With previous all-time highs well above 50 cents per pound set back in the 1970's, there is precedence for the futures to run higher if the world demand remains strong and supplies remain low.

The recent price action has been volatile but generally range-bound trading around the major pivot level now well established at slightly above 30 cents per pound. This range has been gradually narrowing over the month of February, and the result has been the formation of a very well defined Triangle chart pattern, which can be seen here on the Autochartist 240-minute time interval with the key support and resistance levels indicated.

Last week's trading appears to have been a successful retest of the Triangle's support trend line, and this may be followed by a rally back to the upper end of the pattern,

The Triangle chart pattern is now approaching the apex, where the two trend lines converge. This means the market is likely to initiate a breakout in the near future. If this proves to be a continuation pattern as is currently suggested, the breakout will come with a violation of the upper resistance level. This could set in motion yet another major move higher in the sugar market, with a possible run to the mid-30's and even 40 cents during the next leg of this impressive bull market.

A breach of the support tested last week, however, would be seen as bearish and set traders to looking for a possible near term correction. While this seems the less probable direction as of the latest market moves, the support level is now very well defined, allowing for a clear technical picture if the level does fail in the sessions to come.

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