The sweetener hit its highest prices in more than a decade this February, ahead of planting season and in time to encourage the planting of a record crop. Global production is expected to surpass demand by anywhere from 4.2 million tons to 8.4 million tons, according to reports from various market analysts.
With such a surplus, a Bloomberg survey found nine out of 13 traders expecting a decline in sugar futures. The last such negative outlook preceded a 7.6 percent decline in the soft commodity.
"If you are a strategic buyer and not a speculator, you’re going to wait for the market to go down because everyone is expecting a surplus," Renier Swanepoel, an analyst at UBS, told Bloomberg. "The only question is how big."
Yet, Bloomberg notes the market in Europe looks quite different, with prices reaching a two-year high because of production shortfalls in the region coupled with import limits.
As of 10:44 a.m. Friday sugar rose 0.26 percent to 26.87 cents per pound, a 0.07 cent rise.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.