July sugar futures (SBN26) present a buying opportunity on more price strength.
See on the daily bar chart for July sugar futures that prices are trending up and this week hit a 5.5-month high. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture as the blue MACD line is above the red trigger line and both lines are trending up. The sugar bulls have the near-term technical advantage.
Fundamentally, sugar prices have risen due to reduced supply, higher production costs and geopolitical events. Major exporters like India and Thailand have seen reduced production due to droughts, while rising energy costs are increasing refining expenses and encouraging the use of sugar cane to ethanol production instead of sugar production.
A move in July sugar futures above chart resistance at this week’s high of 16.05 cents would become a buying opportunity. The upside price objective would be 18.50 cents or above. Technical support, for which to place a protective sell stop just below, is lcoated at 15.00 cents.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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