RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Softs

Sugar Trading Sideways

Posted 04/25/2019 9:19AM CT | Joe Nikruto

This week’s comment finds sugar trading sideways, trapped within a range bounded by 13.00 to the upside and roughly 12.20 to the downside. July sugar has tried to breakout, both to the downside and to the upside, yet here we sit at 12.90, again. On Wednesday morning, Hightower spoke of two fundamentals that caught me by surprise.  Chinese imports way down. According to the widely read commentator, Chinese cumulative imports for 2019 were down over 50% vs the same time in 2018. Additionally, in Brazil, a record low amount of sugar cane used for sugar vs used for ethanol, 36.45%, according to Hightower. Less sugar demanded by a top five global importer. Less sugar produced by the world’s largest producer. These two fundamental factors may point to exactly what we see on the chart. July sugar is trading in a range and will likely do so until something changes fundamentally. Intermediate- term trend followers look to get long above 13.30 and short below 12.30. At this point, it is difficult to see the catalyst for a sustained move in either direction.

Sugar Jul ’19 Daily Chart

Sugar Jul '19 Daily Chart

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Joe Nikruto

Senior Market Strategist
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."
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