FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.

posted on 28 September 2016

90% Rally In Sugar Prices Since Late 2015

from Elliott Wave International

Imagine that the world's leading commodity markets were cars speeding down a two-lane highway. Who do you think is in the driver's seat controlling which direction prices go?

Well, if you follow the mainstream school of wisdom, the answer to that question is simple: Outside factors, or "fundamentals," drive price trends in commodity markets. That can be a countless number of external factors related to the market itself, such as supply/demand data, weather patterns, political unrest in growing regions, other markets, and on.

We see the picture quite differently. In our opinion, fundamentals are in the passenger seat, at best. And behind the wheel is investor psychology, which unfolds as Elliott wave patterns on price charts.

Nothing makes this distinction clearer than the recent history of one single commodity: sugar.

In mid-2015, sugar prices were about as sweet as curdled milk. The market was mired in a multi-year bear market with prices circling the drain of an 8-year low.

According to the mainstream experts, the sugar "car" was being driven by several bearish factors, such as:

  • The currency of the world's no. 1 sugar producer -- Brazil -- was at a 12-year low
  • Oil prices were plunging, reducing demand for alternative, ethanol-based fuels
  • The European Union was ending its "Quota system" which helps shield against outside competition
  • China was flooding the market with artificial sweeteners
  • The U.S. dollar was soaring
  • And Brazil was experiencing a bumper sugar crop

Factors like these, many said, were destined to steer sugar prices Thelma & Louise style straight over a cliff -- as these news items from mid-2015 make plain:

"Sugar Bears Still in Charge" (Wall Street Journal)

"Global sugar prices have been on a downward trend, and there's no end in sight." (Food Navigator)

"The futures sugar market in New York behaves like an endless rerun of a horror movie." (Wall Street Journal)

"Such is the state of the sugar cane market that local media in India have reported a rise in the number of sugar farmers committing suicide. The market is expected to remain in surplus into next year." (The Telegraph)

Now, for our take on the situation. According to our chief commodity analyst Jeffrey Kennedy, that same sugar "car" was about to make an abrupt U-turn -- U as in "UP."

In our July 2015 Monthly Commodity Junctures, Jeffrey Kennedy outlined a very bullish scenario for sugar, including these details:

"I've noticed over the years that significant turning points tend to occur in years ending 0 and 5... as we move into 2015, I'm actually anticipating a significant low. I'm looking for prices to bottom this year.

"I believe we're in the very late stages of the initial move down. Ideally, say as move into the fourth quarter of 2015, the [decline] will terminate ant that will give way to an advance where I expect sugar prices to actually double.

"Once we do finish this move down, I will be looking for a sizable move, something that will easily push prices back up to 18, 20, even as high as 22."

From there, the next chart shows what happened:

  • Sugar prices bottomed in late September, 2015, the "fourth quarter" time window that Jeffrey identified.
  • Then, sugar prices exploded upward in a 90%-plus rally to the 22 cents/pound price target that Jeffrey identified.

When markets present Elliott wave counts as strong as the one that helped Jeffrey anticipate sugar's dramatic 2015-6 comeback -- it captures all of our analysts' attention.

In fact, in our September 19 Short Term Update, we gave a special commodity update to address the next likely move in sugar -- one that may make a dramatic appearance soon:

"As for other markets, if you have any experience in commodities, Sugar is a candidate for a [major move]."

Get 32 pages of actionable trading lessons, hand selected by EWI's Chief Commodity Analyst Jeffrey Kennedy, designed to help you become a better trader. Absolutely free!

All you need is to create a free Club EWI profile. Here's what else you'll learn:

  • How to Make Yourself a Better Trader
  • How the Wave Principle Can Improve Your Trading
  • When to Place a Trade
  • How to Apply Fibonacci Math to Real-World Trading
  • How to Integrate Technical Analysis into an Elliott Wave Forecast

Download your copy of Commodity Trader's Classroom now.
(Already a Club EWI member? Get your free trading lessons here.)

This article was syndicated by Elliott Wave International and was originally published under the headline This Commodity Has Perked Up its Investors' Portfolios.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing

Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.

You can also comment using Facebook directly using he comment block below.

Econintersect Contributors


Print this page or create a PDF file of this page
Print Friendly and PDF

The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.

Take a look at what is going on inside of
Main Home
Analysis Blog
Comments on Feyerabend’s ‘Against Method’, Part II
Comments on Feyerabend’s ‘Against Method’, Part III
News Blog
Rail Week Ending 15 October 2016 Paints A Negative Economic View
What Is The New Normal For U.S. Growth?
Affordable Care Act And Its Effect On Part-Time Employment
The Speed Of Filling Jobs Is Declining
First Working Eggs Made From Stem Cells Points To Fertility Breakthrough
Infographic Of The Day: Mega Machines
Online Platforms Double Down On TV Programming
A History Of Mars Missions
How Tesla Out Innovates Traditional Carmakers
Schiaparelli's Descent To Mars In Real Time
September 2016 Existing Home Sales Still Not Excellent
September 2016 Leading Economic Index Improves Indicating Moderate Growth Ahead.
October 2016 Philly Fed Manufacturing Survey Declines But Remains In Expansion.
Investing Blog
Options Early Assignment - Should You Worry?
The 401k Plan Manager 17 October 2016
Opinion Blog
Prop. 51 Versus A State-Owned Bank: How California Can Save $10 Billion On A $9 Billion Loan
Obama's Middle East Policy Has Been A Complete Failure - Or Has It?
Precious Metals Blog
How Will The Election Outcome Impact Precious Metals?
Live Markets
20Oct2016 Market Close: US Indexes End Flat After Choppy Session, Nigeria Slashes Oil Prices, Crude Prices Continue To Slip, Bullish Investors Not So Bullish Anymore
Amazon Books & More

.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Middle East / Africa
USA Government

Crowdfunding ....



Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day


Asia / Pacific
Middle East / Africa
USA Government

RSS Feeds / Social Media

Combined Econintersect Feed

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution



  Top Economics Site Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved