Sweet Sugar In June

Agricultural crops have always been strongly influenced by the vagaries of nature and weather. It is true that smaller acreages are producing bigger crops and the world has become smaller enabling easier food export-import. But, it is also true that the production, storage and consumption of agricultural products vary greatly by season. So it not surprising that the seasonal effect is visible in the price-action of agricultural futures.

Sugar is produced across both sides of the equator and in the Eastern and Western Hemisphere but it still goes through seasonal price swings. The most pronounced being in the summer months. Stock Trader’s Almanac credits this to uncertainty created by sugarcane harvesting in the tropics and the sugar beet planting in the Northern Hemisphere in May/June time-frame. This enables the sugar prices to rally in the June.

We applied our proprietary algorithm for entry and exit signals to develop a ‘sugar trading’ strategy in June. Our strategy produced 24 winners in last 41 years. The average returns has been 5.8% for an average holding period of 53 calendar days giving an annualized return of 40.5%.

Since 2000, the seasonal tendency has become even more pronounced. The success rate climbs to 86%, average gains rises to 14.9% for an annualized return of 170%.

We can also trade SGG, iPath DJ-UBS Sugar TR Sub-Idx ETN, instead of trading the commodity futures. The TEN was introduced in last 2008. Trading it has been 80% successful. The average return has been 23.4% with a 64 calendar day average holding period giving an annualized return of 133%.

When June rolls around we start looking for trading signals. Once they are generated we will send out alerts to our members.

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