Short term
Trade view / 23 May 2017 at 12:54 GMT

Sugar looks set to fulfil its technical potential

Managing Partner / Spotlight Group
United Kingdom
Instrument: SBN7
Price target: 16.62
Market price: 16.38

Sugar prices have risen indicating they may be able to overcome China's import tariff.  
As the top sugar buying country, China yesterday unveiled a significant increase in tariffs on sugar imports. Planned is an extra tariff of 45%, above the current 50%, on imports of sugar above the quota of 1.95m tonnes enforced by World Trade Organization rules. However, this did not prevent futures in the sweetener rising on international markets.

The 12-month chart shows New York futures have threatened to break their 50-day moving average for the first time in three months.
 Source:, Spotlight Ideas 

Market expects renewed demand 

Sugar futures rose despite the announcement. The gains were partially attributed to the negative reaction of Chinese sugar futures to news of the levy. It has been introduced as part of a drive to boost the country's own sugar industry.

Zengzhou sugar futures for September dropped 0.5% to 6,688 Yuan a tonne; the decline was viewed as evidence that Chinese investors were disappointed that the levy was not higher. The proposed levels are still offering a chink of hope to exporters.

There is an idea that a clampdown Beijing ordered on the illegal imports of sugar will struggle meaning that source of demand will remain largely intact. China has made similar efforts in the past, but usually the effect only lasts for a week or two before things revert to normality.

Sugar 6-Year Chart:
Source:, Spotlight Ideas    

The technical measures through to one week all show strong buying to buying signals, however, I am aware that this is quite a speculative proposition and so I am taking a short-term approach to the trade.

Management and risk:

Parameters: Sugar US Cents/lb (SBN7) July 2017
Entry: Buy 16.38 12:41GMT
Targets: 16.47 ... 16.57 ... 16.62 ... 16.72
Stop: 16.10
Time horizon: Short-Term

— Edited by Clemens Bomsdorf

Non-independent investment research disclaimer applies. Read more
A compiled overview of Trade Views provided on is found here
Raneta Leonid Raneta Leonid
Stephen we have to short that Euro ;-)
Stephen Pope Stephen Pope
Hi there Raneta,
It is a muddled technical outlook and can turn at any moment. I do not like the Euro as I think there is far too much complacency about the depth of the recovery.

Germany is mature, France will disappoint, Italy is highly problematic and the Greek issue is a perennial problem.

I am minded to sell with a an approach of taking short-term profits.

Raneta Leonid Raneta Leonid
Tnx, I'm still shorting with a wider stop, didn't get stopped out yet, I'll stick with it, because I'm interpreting this move as corrective, so aiming to the south... will see.
Ryan786 Ryan786
Is the buy still valid now? Trading at nearly 59 week low
Stephen Pope Stephen Pope
No...I was stopped out and as I will be away from tomorrow for 11 days I am not looking to reactivate.


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

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