A Sweet Trade

Mar ‘22 sugar futures start the day slightly negative on the charts as price action nears resistance. Overall the technical action on this market is still bullish driven by fundamentals and supportive outside markets. Reports indicate a potential further tightening of supplies with the major producing nations and some up and comers looking to increase ethanol production in the face of rising energy prices. The commitment of traders report indicates both managed money and retail traders are adding to their long positions which is bullish. Sugar has had a little volatility while being mostly stuck in a fairly sideways trading range since early August. The top of this trading range (which we are nearing) has been pretty firm and lines up with a resistance point on the monthly bar chart looking back to 2017. There is still a lot of potential for bullish opportunity in this market driven by both production issues and increasing demand for using more sugar in ethanol. While resistance is strong and much is likely already factored into prices, a continued rise in energy prices or weakening US dollar could be enough to push sugar through resistance (See charts below) and see the next leg up. However, if you don’t have any positions on and are watching for that breakout, it will be wise to wait for confirmation with prices closing above resistance to avoid being caught by any possible reversals.

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Eric Scoles

Market Strategist


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Blue Line Futures LLC

141 W. Jackson #2845

Chicago IL 60604

Futures trading involves substantial risk of loss and may not be suitable for all investors. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.

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