Agriculture commodities have been solid though overshadowed performers this year. The same sentiment can be extended to sugar exchange traded notes (ETNs), including the iPath Bloomberg Sugar Subindex Total Return ETN (NYSEArca: SGG) and the Teucrium Sugar Fund (NYSEArca: CANE).
India, the world’s second-largest sugar producer, could turn into a net importer for the 2016 to 2017 season after a wetter monsoon this year was unable to offset the previous two dry years., with production falling to less than 23.5 million metric tons. Heat and drought due to the worst El Nino weather in six decades have decimated Thailand’s sugar production, which officials now expect to be reduced by 14% compared to last season, the Wall Street Journal reports.
Related: Sweet or Sour for Sugar ETFs?
SGG and CANE are other tactical, but sometimes volatile offerings in the agriculture commodities space.
SGG’s “recent close near the trendline is creating an extremely lucrative risk-to-reward setup and many will likely use it as a guide for placing their buy and stop-loss orders,” adds Investopedia.[related_stories]
Sugar futures have been one of the best markets for trend following traders this year, as prices have been in a sustained up-move since February. This performance has garnered the attention of large speculative traders who have amassed a huge net-long position in the Sugar market while adding to positions as prices move higher,” according to OptionsExpress.