For the week ended June 30, the near-month futures on average for both number 11 and number five sugar contracts reversed their momentum and were trending downwards week-over-week. Note that the numbers 11 and five are related to the way shipping costs are calculated for these commodities. Sugar number five is traded in London while sugar number 11 is traded in the US.
On June 30, the near-month sugar number 11 futures stood 5.2% higher at 13.7 cents from 12.8 cents on June 23. However, the weekly average for the week ended June 30 for the near-month sugar number 11 futures fell by as much as 1.8% to 13 cents from the weekly average of 13.22 cents in the week ending June 23.
Similarly, the near-month futures of sugar number five stood 2.1% higher at $403.9 per metric ton from $395.5 per metric ton on June 23. However, the average weekly near-month futures for sugar number five futures fell by as much as 1.4% to $393.7 per metric ton from the average of $399.4 per metric ton a week ago. Year-over-year, sugar number 11 futures are trading 32% lower, while the number five sugar is trading 27% lower.
Forward curve shifts higher
In the above chart, we see that the forward curve for all the maturities for number 11 sugar has shifted to higher levels. A similar shift (not shown above) also occurred for sugar number five futures. This would mean that if companies that buy sugar (SGG) went long on sugar number 11 or sugar number five futures in the week ending June 23, they would have benefitted from those contracts.
Next, we’ll discuss cocoa futures.