Sweet or Sour for Sugar ETNs

Some agriculture exchange traded products are starting to keep pace with their energy and precious metals counterparts, which have led this year’s exchange traded funds commodities resurgence.

The PowerShares DB Agriculture Fund (NYSEArca: DBA) is higher by nearly 2% over the past month. The PowerShares DB Agriculture Fund tries to reflect the performance of the Diversified Agriculture Index Excess Return, which is comprised of futures contracts on the most liquid and widely tracked agriculture commodities.

Within the world of agriculture commodities and softs, some or performing betters than others and there some concerns regarding sugar. After soaring more than 5% last Friday on heavy volume, the iPath Bloomberg Sugar Subindex Total Return ETN (NYSEArca: SGG) is up nearly 7% this year. The Tecrium Sugar Fund (NYSEArca: CANE) is higher by 10.5%.

Earlier this year, sugar futures jumped after the International Sugar Organization calculated that world production in the 2015 to 2016 period would fall short of production by 5.02 million metric tons, compared to previous estimates for a 3.5 million deficit, Bloomberg reports.

“A statistical deficit is clearly supportive for world prices,” the ISO said. Prices “can be expected to trend generally higher in the remaining months of 2015/16.”

ISO’s worst-than-expected projections comes a week after INTL FCStone anticipated a global supply deficit of 7 million tons. Sugar prices may be gaining momentum after the strong El Nino weather phenomenon hurt plantings in India, Thailand and Brazil, the world’s top producer.