Home > Commodities
The Star of SUGAR’S Story: Bull or Bear?
True or False -- Crude oil prices move in step with sugar prices. Reason being, the higher the cost of oil, the greater the demand for alternative fuels such as cane-based ethanol.
Answer: That depends on whom you ask. According to the mainstream financial experts, the above statement is 100% spot on -- as the following news items affirm:
- “Soaring oil a blessing for sugar industry… The prices of the two commodities are highly synchronized. When oil climbs in price so does sugar as you realize there is a global shift towards cleaner fuels.” (AllAfrica.com)
- “Sugar appears poised to reap the records of high energy prices.” (Reuters)
- “Sugar Up On Positive Outside Markets. Gains were supported by key outside markets that turned bullish: Crude Oil futures rebounded from lower levels…” (Futuresource.com)
According to historical data and actual fact-based reality, however, crude and sugar prices are about as synchronized as a dolphin and a duck-billed platypus. Case in point:
- From a fresh contract high on March 7, 2008, sugar prices turned down in a three-month long sell-off that slashed 40% off its value. All the while, Crude oil enjoyed an uninterrupted winning streak above the record setting height of $100-, $110-, $120-, and $130-per barrel.
- Flash ahead to today: Sugar’s most recent descent to a five-week low got started on May 26, even as crude oil prices continued to soar.
As it's often the case, the only thing that is consistent about fundamental analysis of the world’s leading financial markets is its inconsistency. As for objective, original, and disciplined insight into where SUGAR prices could be in the days ahead, the June 17, 2009 Daily Futures Junctures has exactly that. Elliott Wave International’s senior commodity analyst Jeffrey Kennedy identifies THREE main traits of the decline from late May that match the DNA of one kind of trend; those traits are: The number of Elliott waves, the Fibonacci retracement level of the decline, and a relationship of equality between waves.
And, in the June 17 Daily Futures Junctures,Jeffrey also reveals whether the star of sugar’s near-term story is a bull or bear. Get on board before the sweet opportunity is gone via a risk-free subscription today.