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Sugar Consolidates Between 12 And 13 Cents Per Pound

Feb. 05, 2019 6:30 AM ETTeucrium Sugar ETF (CANE)DBA, SGG, RJA, DAG-OLD, JJA, AGA-OLD, FUD, UAG, USAG, AGF, TAGS, ADZ


  • A drop below 10 cents for the first time since 2008.
  • A recovery takes sugar over 40% higher in one month.
  • A dip holds above 11.50 cents.
  • Sugar consolidates as each year is a new adventure for production - watch Brazil.
  • SGG and CANE for those who do not participate in the futures market.
  • Looking for more? I update all of my investing ideas and strategies to members of Hecht Commodity Report. Get started today »

Sugar is one of the most volatile commodities that trade on the futures exchange. Since the 1970s, the range in the sweet commodity has been from a low at 2.29 cents per pound to a high at almost twenty-nine times that level at 66 cents. The price of sugar depends on a collection of factors including the weather conditions in critical growing regions around the world. Currency volatility in producing nations can also influence the price. In many countries, governments subsidize sugar production as they view the soft commodity as a staple and essential food product. Changes in government policies can also impact the price of the sweet commodity. Most recently, the price of March world sugar futures was trading at the 12.77 cents level on February 4. Meanwhile, the price of US government subsidized sugar close on the same day at double that price level at 25.55 cents per pound.

The world sugar futures contract on the International Exchange reflects the supply and demand for the sweet commodity around the globe. In 2018, supplies rose to a level that caused the price to move to its lowest level since 2008.

We witnessed lots of volatility in the world sugar futures market over the recent months, and the price variance is likely to continue in 2019. The most direct route for a trade or investment position in the sugar market is via the Intercontinental Exchange. However, the Teucrium Sugar ETF product (NYSEARCA:CANE) and the iPath Bloomberg Total Return ETN product (SGG) do excellent jobs tracking the price of sugar futures.

A drop below 10 cents for the first time since 2008

In August and September 2018, the price of sugar did something it had not done in a decade when the price dropped below the 10 cents per pound level. Critical support

The Hecht Commodity Report is one of the most comprehensive commodities reports available today from the #2 ranked author in both commodities and precious metals. My weekly report covers the market movements of 20 different commodities and provides bullish, bearish and neutral calls; directional trading recommendations, and actionable ideas for traders.

This article was written by

Andrew Hecht profile picture
Weekly commodities commentary and calls, from a Wall Street veteran
Andy Hecht is a sought-after commodity and futures trader, an options expert and analyst. He is the #2 ranked author on Seeking Alpha in both the commodities and precious metals categories. He is also the author of the weekly Hecht Commodity Report on Marketplace - the most comprehensive, deep-dive commodities report available on Seeking Alpha.

Andy spent nearly 35 years on Wall Street, including two decades on the trading desk of Phillip Brothers, which became Salomon Brothers and ultimately part of Citigroup.

Over the past two decades, he has researched, structured and executed some of the largest trades ever made, involving massive quantities of precious metals and bulk commodities.

Andy understands the market in a way many traders can’t imagine. He’s booked vessels, armored cars, and trains to transport and store a broad range of commodities. And he’s worked directly with The United Nations and the legendary trading group Phibro.

Today, Andy remains in close contact with sources around the world and his network of traders.

“I have a vast Rolodex of information in my head… so many bull and bear markets. When something happens, I don’t have to think. I just react. History does tend to repeat itself over and over.”

His friends and mentors include highly regarded energy and precious metals traders, supply line specialists and international shipping companies that give him vast insight into the market.

Andy’s writing and analysis are on many market-based websites including CQG. Andy lectures at colleges and Universities. He also contributes to Traders Magazine. He consults for companies involved in producing and consuming commodities. Andy’s first book How to Make Money with Commodities, published by McGraw-Hill was released in 2013 and has received excellent reviews. Andy held a Series 3 and Series 30 license from the National Futures Association and a collaborator and strategist with hedge funds. Andy is the commodity expert for the website about.com and blogs on his own site dynamiccommodities.com. He is a frequent contributor on Stock News- https://stocknews.com/authors/?author=andrew-hecht

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.

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