Sugar ETN: Where Is It Headed?

Considering that sugar is a key ingredient in thousands of widely-consumed food products, sugar futures sure don't get the fanfare that gold, oil and other commodities do. That might explain why the iPath DJ-UBS Sugar TR Sub-Index ETN

is so thinly traded, but light volume or not, SSG has turned in a solid performance in the past month, adding 6% while the S&P 500 is down 1%. Even after that run, there may be some gas left in SSG's tank as the ETN is trading just $10 above its 52-week low, but almost $40 below its 52-week high. Brazilian sugar cooperative Copersucar SA said sugar prices could surge 30% this on robust demand, weak crop yields and transportation issues. There's a point in favor of the sugar bulls. On the other hand, researcher F.O. Licht said sugar prices could be headed for a fourth-quarter tumble as Brazil and India deliver more supply to market, creating a potential surplus. Futures in New York may decline to between 13 cents and 15 cents a pound between October and December, Bloomberg News reported, citing F.O. Licht. There's a point in favor of the sugar bears. Here's what the Professor knows: You don't want to be on the wrong side of a trade with SGG. The ETN was trading above $85 in January. By late February, SGG was under $50. In the near-term, SGG should take out $50 and move to the mid-50s, so the Professor is cautiously bullish for now. Learn how to find the best

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