Today people are more and more aware to the dangers of sugar, and look for alternatives such as corn syrup and others. This could lead to an fluctuations of sugar prices and more people looking for a new sweetener for their food and drinks. Supply and demand are, as usual, important to the process of determining the price of sugar. However, as mentioned, sugar is used by almost everyone so more people have access and effect the price. In most developed countries, sugar has a reputation for causing various illnesses and ailments.
For traders, the disadvantage of trading futures includes an expectation that the physical commodity will be delivered – which they don’t want. Therefore, it’s necessary to ensure rollover arrangements are in place. Sugar is often nonfarm payrolls forecast traded using futures – contracts in which you agree to exchange a set amount of the underlying commodity at a set price on a set date. These contracts are traded on futures exchanges, such as the Intercontinental Exchange .
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- Another would be the price of oil, which is heavily influenced by consumer and industry demand.
Compare this with China, the third-largest consumer and producer of sugar, where sugar consumption is increasing but starts from a comparatively low level of about 7 kg per year. It’s easy to see that this represents a huge possibility for growing demand. Commodities which are grown such as sugar are known as soft commodities while those that are extracted are known as hard commodities. As sugar beets are grown in cool temperate areas, it is mainly cultivated in the Northern Great Plains, Germany and France. The sugar is contained in the root of the beet but is identical to the sugar in canes. Sugar beets are annuals grown from seeds and are planted in the spring to be harvested in the fall.
Many traders will choose to trade the most active month, also known as the “front” month, as this will typically be the contract with the most trading volume. Speculators buy or ‘go long’ on sugar futures when they believe that prices will go up, and they’ll sell or ‘go short’ on sugar futures when they think that prices will fall. Futures trading involves the substantial risk of loss and is not suitable for all investors. Sugar futures are traded under the name sugar no. 11, with prices quoted in U.S. dollars per pound, and a minimum fluctuation of $0.0001 per pound. Currently, 69 percent of the world’s sugar is consumed in its country of origin, while the rest is traded on international markets. James Chen, CMT is an expert trader, investment adviser, and global market strategist.
Trading Conditions on Sugar CFD – #C-SUGAR
CFD and Forex Trading are leveraged products and your capital is at risk. Please ensure you fully understand the risks involved by reading our full risk warning. Sugar is an interesting commodity, and because there are so many uses for it the price of sugar can become quite volatile. This is especially true whenever there is a disruption in supply from any of the major sugar cane producing countries. Monsoon season in India is likely to cause a spike in sugar prices when it is particularly bad.
Another would be the price of oil, which is heavily influenced by consumer and industry demand. Like any investing the greater your knowledge of the instrument you want to trade the better your chances are of success are, especially long-term. It’s important to understand to what extent these factors will alter the price of a commodity. Trailed stop losses on the Feeder Cattle and Sugar positions to lock in gains and stopped out in both for a profit. View the latest top stories from our trusted partners, with a focus on today’s futures and commodity markets.
Find the latest Sugar #11 prices and Sugar #11 futures quotes for all active contracts below. Exports from India, the world’s biggest producer of sugar, could weigh on global prices , but augment supplies across Asia. All sugar entering the United States under the FY 2022 raw cane sugar TRQ will be permitted to enter U.S.
Once you’ve opened an account, you will have access to our trading platform . For example, in 2018, the UK government introduced a tax on the producers of soft drinks which contained sugar above a certain threshold. Sugar as a product dates back as far as fourth century India and was once so rare it was referred to as “white gold”. Sugar cane, which was the first source of sugar, is a perennial grass that is grown in tropical and subtropical areas.
Sugar Commodity Market Trades, Charts
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date.
He believes that small changes in weather patterns could be the catalyst for a supply disruption and a rise in prices. Traders looking to speculate on short-term bottlenecks in supply might see sugar as an attractive trade. The demand for sugar is heavily impacted by population growth and income levels, and so links to long-term political and population trends. As the population of developing nations receives and gets accustomed to increasing income levels, this greatly increases demand for sugar. Unlike exports, imports of sugar are diversified in nature, among more than 100 countries.
Trading in sugar provides a way to diversify a portfolio and smooth out trading returns. The CME contract trades globally on the CME Globex electronic trading platform and has expiration months of March, May, July and October. If you started trading in the last two decades, you’ve only known a world in which the euro is worth more than the US dollar.
Therefore, poor conditions such as drought, frost and insufficient rainfall can reduce its supply. If demand for sugar outweighs the supply, it can lead to limefx a run on sugar and push the price up. Sugar futures are traded at the InterContinental Exchange in contract months January, March, May, July and October.
When oil prices drop it is no longer competitive to produce ethanol using sugar cane, and the price of sugar is likely to fall. Of course weather can also impact sugar prices, especially in Brazil and India, where roughly half the world’s sugar cane crops are grown. Since its launch, Sugar Trading Manual has established itself as the definitive information source for the sugar market worldwide. It is compiled from contributions by some of the most senior and widely respected figures in the international sugar trade. This edition takes into account changes in all aspects of the business including production, markets, pricing, contracts, administration and management, and the influence of the major trading blocs.
The Sugar No. 11 futures contract is considered the benchmark for trading raw sugar around the world. Sugar production is concentrated in tropical and subtropical areas, so the performance of Sugar No. 11 can also be used as an economic data point for countries that are heavy producers. The contract prices the physical delivery of raw cane sugar, free-on-board the receiver’s vessel to a port within the country of origin of the sugar.
Trading Sugar using CFDs
As a derivative of the previous factor, many bodies fight the usage of sugar – as it is a cause of diabetes, obesity, teeth related issues and more. Countries want to narrow sugar induced health problems can change their policy regarding sugar, which can bring about a massive change in its demand rate. Sugar crops, much like coffee and cocoa crops, require plenty of sunshine and rainfall. Naturally, poor weather conditions have a troublesome effect on sugar supply.
The advantage of CFDs is that traders can have exposure to sugar prices without having to purchase shares, ETFs, futures or options. Sugar prices Monday posted moderate gains, with NY sugar climbing to a 5-1/2 month nearest-futures high and London sugar posting a 2-month high. There are reports that some Indian sugar mills are threatening to default on sugar contracts, possibly forcing traders to cover positions in the cash market, which would boost prices.
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The sugar processed from beets make up 25% of total sugar production. March NY world sugar #11 on Monday closed up +0.19 (+0.97%), and Dec London white sugar #5 closed up +2.00 (+0.35%). Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts. Commodity futures & options are bought and sold for both speculative and hedging purposes. The price of Sugar No. 11 is impacted by a range of factors that impact supply and demand for the commodity. Stay informed with real-time market insights, actionable trade ideas and professional guidance.
There are virtually no pure-play global public companies engaged in the production and sale of sugar. Imperial Sugar was a public company before being acquired and taken private in 2012. Because of the different climate requirements, countries mainly grow one or the other. The United States is the exception to this, growing cane in Florida, Hawaii and Louisiana, and beet in Minnesota and California. Where European meets Southern, our brunch ranges from fresh buttermilk biscuits, stuffed French toast, shrimp & grits and much more.
All trading involves risk, especially if you’re trading using leverage, which is why you need a risk management strategy to protect against unnecessary losses. There are ways in which you can minimise your risk, which includes attaching stops to your positions. Stops will close your trade at a certain point if the trade all crypto market moves against you, to prevent you losing more than you’re prepared to. You can trade sugar using a wide range of financial instruments, including futures, CFDs. Tariffs that are in place to look after farmers and producers sometimes cause producers to make much more sugar than is needed in the market.
Its shares are heavily influenced by the price of the commodity, but can offer good value compared to trading sugar itself. Sugar can be used to produce ethanol – a chemical compound that can be used as an alternative to fossil fuel. The demand for ethanol is on the increase, which could mean higher sugar prices in future. One thing that will always remain completely unpredictable is the weather.