Commodity Chart Of The Day: Sugar

 |  Includes: CANE
by: Matthew Bradbard

Commodity Chart Of The Day

Daily Sugar

(click image to enlarge)

Click to enlarge

After a near 25% appreciation since the beginning of June, sugar futures have likely hit an interim top just below 24 cents. Prices have started to roll over, having backed off 1.5 cents this week.

My take is that prices are headed south, as my target would be the 61.8% Fibonacci level just above 21 cents in the October contract.

Use any advances as selling opportunities. For option traders, I like the 22 and 21 cent strike for put options. For futures traders, I suggest gaining short exposure while simultaneously selling out-of-the-money puts. If we do see prices roll over, I would exit 75% of the trade on a move to 21.50 and roll the die with the remaining 25% position.

Risk Disclaimer: The opinions contained herein are for general information only and not tailored to any specific investor's needs or investment goals. Any opinions expressed in this article are as of the date indicated. Trading futures, options, and Forex involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.