What I Need to Know to Make a Profit on Sugar No. 11

Posted by OliverPearson 0

Sugar No 11

Many world’s financial institutions and investors watch closely changes in the price of sugar. Sugar belongs to the category of strategic and the most important commodities. Sugar No. 11 futures are traded on the most popular markets including the ICE Futures U.S. (the Intercontinental Exchange). A total monthly volume of the traded sugar futures exceeds $3 billion.

Sugar No. 11 futures are traded on the Intercontinental Exchange (ICE) under ticker symbol SB.

Cane and beet sugar is in the most demand in developing countries. The economies being on the peak or highly developed prefer sugar substitutes.

The world’s leading sugar-producing country is Brazil. It accounts for 23 percent of the world total production. According to the data the United States Department of Agriculture, in 2011,  Brazil produced over 35 million tons of sugar.

sugar3Canada, Japan, and Western Europe are the price leaders; sugar is the most expensive there (about $2).  In China, the price of sugar is the lowest (less than $1).

The worldwide price of sugar depends on the futures quotes. They mirror supply and demand balance and hence affect the price of sugar.

 

Quite a few countries produce sugar.  For instance, sugar cane grows in tropical countries. In the regions having various climate zones, sugar is manufactured from sugar beet.Unlike sugar cane being a perennial plant, sugar beets require planting every year. Therefore, sugar cane as a raw material for sugar production prevails over sugar beets.

Along with Brazil, large sugar producers are China, India, and the European Union. You need to have this in mind doing analysis. The point is that the factors influencing the price of sugar include weather conditions in the countries growing this plant.

Also, the price of sugar No. 11 futures is affected by the policy pursued by a government and stock piles.

Sugar 11It should be noted that demand for sugar steadily rises due the growing population and a rise in living standards in low developed economies. The price may be also impacted by the producers of beverages, confectionary. If the manufacturers start using sugar substitutes, this will cause a decrease in the price of sugar.

Typically, binary options brokers offer options on SUGAR (11). And this is the sugar No. 11 that is used as a benchmark. Sugar No. 14 is traded mainly in the United States.  If a small volume is supplied to the world market, change in the price can be expected.

From its inception, sugar No.11 futures was aimed to hedge risks bore by large producers, buyers, and supplies. However, these futures’ high liquidity and volatility attracted traders later on.

Coming back to weather conditions as one of the factors influencing the price of sugar, a rise in prices typically follows extreme rainfalls or drought.  Besides, the price is affected by the news that the area of sugar beet or cane is reduced. In 2008, for instance, area of sugarcane reduced by 20 percent in Brazil.

How to Make a Profit on Sugar No. 11

As you see, binary options on sugar return the highest profit if you invest in this commodity. To make a profit on binary options, you just need to do a precise forecast of the price action during a certain period.

One of the brokers offering sugar No. 11 is TopOption. This is a modern reliable and time-tested broker.

I browsed the broker’s webpage and selected SUGAR (11) as an underlying security. Then, I set expiration of the binary option to 11:45 a.m., typed the amount of investment $110 and clicked the UP button expecting the price to rise:

sugar

At that moment it was 11:36 a.m. meaning that I invested in sugar for a period of 9 minutes.

I knew that if the price increased even by a tick, I would make a 75 percent profit.

After a little while, I checked the result:

sugar2

The price has increased in line with my forecast, and I’ve made a net profit of $82,5. As you see, any can make money on SUGAR (11).  By the way, along with sugar, TopOption offers options on other commodities like crude oil, gold, stocks of the world’s leading companies, and underlying assets traded during the Asian session.

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