Sugar is traded on the Intercontinental Exchange with the ticker symbol SB. The contract size is 112,000 pounds. Contract expiration months are March, May, July, and October. Sugar is considered a soft commodity in the same category as cocoa, coffee, and orange juice. Sugar is produced from sugarcane which accounts for about 75% of sugar production and sugar beets that make up the rest. Brazil is the world's largest sugarcane producer and Europe is the world's largest beet producer.
Weather should be watched in Brazil, India and the United States. Heavy rains, especially around harvest time, can cause crop losses to sugarcane, which may cause the price of sugar futures to move higher. Weather, political issues, the value of Brazil's currency, the real, ethanol production and other factors all need to be monitored for their impact on world sugar prices and trade. Hurricanes in the Caribbean, which can devastate sugarcane crops in the United States, Cuba and elsewhere around the rim of the Gulf of Mexico if they strike at harvest time, can also send sugar futures prices higher. The bulk of Brazil's sugarcane crop is harvested between March and December in the south, which accounts for about 90 percent of the country's output. Around 70 percent of worldwide sugar production is consumed in the country that produced it. Sugar futures tend to move higher at harvest time from September to December.
The increased production of ethanol from sugar in Brazil is a positive factor for prices to move higher over the long-term. Ethanol is generally available as a byproduct of sugar production. It can be used as a bio-fuel alternative to gasoline, and is widely used in cars in Brazil. As an alternative to gasoline, it may become the primary product of sugarcane processing, rather than raw sugar. If the price of crude oil moves higher, that should also support sugar futures prices giving ethanol product more incentive to produce bio-fuels. On the other hand, sugar has been subject to increasing competition from alternative sweeteners such as high-fructose corn syrup used in soft drinks and elsewhere.
A recent inflationary environment has caused nearly all commodity prices to rise to either record or near record highs. Sugar though seemed to hit it high early around January and has been on a slight downward trend since then. It seems though that it may be under priced at this time based on rising oil prices. If crude does hit its' projected price of $140 to $170 a barrel we will see sugar climb as well probably even to new highs. My long term prediction for sugar is to hit 50 cents a pound before the end of the year.
If you're interested in learning more about futures and options trading check out http://www.ctfutures.com
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ctfutures.com
Article Source: http://EzineArticles.com/?expert=Jarrod_Barber
Article Source: http://EzineArticles.com/6193205
Weather should be watched in Brazil, India and the United States. Heavy rains, especially around harvest time, can cause crop losses to sugarcane, which may cause the price of sugar futures to move higher. Weather, political issues, the value of Brazil's currency, the real, ethanol production and other factors all need to be monitored for their impact on world sugar prices and trade. Hurricanes in the Caribbean, which can devastate sugarcane crops in the United States, Cuba and elsewhere around the rim of the Gulf of Mexico if they strike at harvest time, can also send sugar futures prices higher. The bulk of Brazil's sugarcane crop is harvested between March and December in the south, which accounts for about 90 percent of the country's output. Around 70 percent of worldwide sugar production is consumed in the country that produced it. Sugar futures tend to move higher at harvest time from September to December.
The increased production of ethanol from sugar in Brazil is a positive factor for prices to move higher over the long-term. Ethanol is generally available as a byproduct of sugar production. It can be used as a bio-fuel alternative to gasoline, and is widely used in cars in Brazil. As an alternative to gasoline, it may become the primary product of sugarcane processing, rather than raw sugar. If the price of crude oil moves higher, that should also support sugar futures prices giving ethanol product more incentive to produce bio-fuels. On the other hand, sugar has been subject to increasing competition from alternative sweeteners such as high-fructose corn syrup used in soft drinks and elsewhere.
A recent inflationary environment has caused nearly all commodity prices to rise to either record or near record highs. Sugar though seemed to hit it high early around January and has been on a slight downward trend since then. It seems though that it may be under priced at this time based on rising oil prices. If crude does hit its' projected price of $140 to $170 a barrel we will see sugar climb as well probably even to new highs. My long term prediction for sugar is to hit 50 cents a pound before the end of the year.
If you're interested in learning more about futures and options trading check out http://www.ctfutures.com
wsj.com
ctfutures.com
Article Source: http://EzineArticles.com/?expert=Jarrod_Barber
Article Source: http://EzineArticles.com/6193205
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