RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Softs

Sugar fully sideways but setting the stage for directional breakout?

Posted 10/04/2017 2:10PM CT | Joe Nikruto

This week’s comment finds sugar futures marking time. The March contract is almost smack dab in the middle of the range sugar has carved out since the lows in late June. 13.42 and the swing high posted on August 1, 15.84. Sugar fundamentals continue to weigh on the market. Technicals which were looking constructive a few weeks ago have since eroded. One look at the chart shows sugar has been treading this ground for some time. Funds continue to add to their short position of about 82k contracts as of the September 26 COT reading, an increase of about 10k contracts. Hightower group research this morning pointed out that European production forecasts have increased as much as 25% as European Union output quotas have ended. As this news has been digested, sugar has found support. The last few days of higher prices have helped March sugar alleviate the oversold technical condition present on the chart. With the 18-day moving average looming overhead at 14.46, we could well have an answer to whether new lows may be in the offing. An inability of March sugar to take out the 18-day moving average could signal an imminent move lower. With only 86k contracts short the funds have ammo to press the downside should sugar continue to look heavy.  

 

Mar ’18 Sugar Daily Chart

Mar '18 Sugar Daily Chart

Joe Nikruto

Joe Nikruto attended Indiana State University and DePaul University in Chicago with a major concentration in economics. "It was during college that I got a job as a runner at the Chicago Board of Trade. I was immediately hooked," he says.He adds that he also enjoys futures trading because anyone can do it. "Your success depends on how you handle the risk and how much work you are willing to put in. You don't need a big-time Wall Street connection, or a degree from an Ivy League school to get started. Your success largely depends on you and what you put into it." In 1992, he started as a runner and back office clerk for a very large futures commission merchant (FCM). He moved up to pit clerk, then research associate working on the trading floors directly for a grain and livestock concern based in Memphis. He spent time on various trading desks for a large retail FCM and then became Series 3 registered in 1997. He also helped develop an online trading platform and consulted on development and trading of mechanical trading systems. He has always worked to assist his clients with all types of trading-from option strategies and hedging to complicated mechanical trading systems. His advisory background includes Floyd Upperman, McMaster, Walter Bressert, Ken Roberts, Tech Guru, Hightower, Helms and Barry Rosen. As for his involvement with RJO, Nikruto says, "R.J. O'Brien has been in operation for more than 100 years. That is a century of supporting customers. You have to be doing something right for folks who use futures to choose to do business with you for that long."