Medium term
Trade view / 29 June 2016 at 13:57 GMT

Short-term sugar bulls to face a medium-term shock

Managing Partner / Spotlight Group
United Kingdom
Instrument: SBV6
Price target:
Market price:

All the time-based technical measures for sugar (SBV6) read as “strong buy”. The spot price at US cents 20.39/lb (1249 GMT) is at the highest level since November 2012.
Sugar Source: Spotlight Ideas

Therefore, if one is a short-term horizon trader I would advocate being a buyer of sugar. However, it should not be assumed that sugar prices will shoot higher indefinitely.

More sugar supply

I say this because even with strong sugar prices forecast into Q3 there is a threat posed by enhanced Brazilian output that can counteract a squeeze on supplies from two seasons of disappointing rains in India.

Significantly higher sugar production is expected in Brazil which will most likely see more sugar supply reaching the market from Brazil in the coming months. Expectations from official Brazilian crop bureau Conab of a 3.0 million tonne rise to 34.3m tonnes of sugar output from the country's key Centre South region in 2016-17. In Brazil, 11% more sugar cane is expected to be turned into sugar than last year.

This would imply a lower sugar price of US cents 17.5/lb by year's end.
Source: Spotlight Ideas

Management and risk:

Parameters: Sugar October 16 SBV6 US cents/lb
Entry: Sell 20.62 13:30 GMT
Targets: 18.12 … 17.75 … 17.50
Stop: 22.85
Time horizon: Medium-term

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail