The Sugar etf (SGG) suffered one of its largest one day losses in years yesterday (5/5/16). There was nothing in the news to suggest the reason for this massive sell-off (at least that I could find), so I asked my friend, Edgard Cabanillas–a commodities trader specializing in agricultural commodities, if he might have an explanation.
Here is his response sent via email:
“Fund selling to an extreme with upcoming NFP and stronger USD in the last few days. Long-term things to consider are that Wilmar and other cash players (along with funds) are bullish and taking appropriate position in the futures and physical markets. Outlook for tighter balance sheets into 2017 are still present so I am still long the spreads in sugar and will do so. USDA releasing a special sugar outlook next week should help to shed light. They say that funds are almost record long sugar, that to me is supportive to being long myself.”
If you wish further information, please contact Edgard directly via the contact info below. He publishes a weekly newsletter along with his trade recommendations so that you can either trade along with him or he’ll do it for you. Last year his fund did very well and for those who are looking to diversify some of their portfolio into commodities, you may wish to consider his fund. And no, I am not receiving any compensation for mentioning him except for the occasional newsletter.
President, Alpine Trading LLC
Tel: + 1 949 357 4948 U.S.
+ 41 76 785 4487 CH