London sugar has broken below the key level of 500 — see chart below. The sugar collapse continues, and this is effectively adding to my existing short position in New York sugar. Significant upgrades to Indian production expectations seem to be driving this latest fall. Sugar has fallen a long way and, as I posted yesterday, some people seem to be speculating on a bounce. But sugar is a volatile market (in part because much sugar is traded under international agreements — the open market deals only with the minority of trade that does not happen under such agreements), and the downward momentum is very strong.
The market opened this morning in a very small range — it was very quiet for some time. Because there had already been a decent pullback in the downtrend, and the intraday trend seemed to be up, I decided to buy on a downside breakout from the opening range, and left an order to do just that. The order was filled on the recent spike down on the intraday chart. I have had to put the stop a little closer than I would have liked — above 500 rather than 510 — in order to make the trade worthwhile.