Shorting Sugar - Risk Management Update

Position: Short Sugar via the ETN SGG

We added a short position in sugar via the ETN SGG in the Hedgeye Virtual Portfolio. This move may seem surprising as we have been frequent buyers of sugar, which is up +28.6% over the last six months.  We have entered five long positions in SGG since June of last year, with our cumulative performance netting a +22.14% gain while riding an inverse correlation to a weakening dollar.


However, that correlation has changed quickly.  Although sugar has a -0.79 inverse correlation to the US Dollar over the past year, it has a +0.24 positive correlation to the dollar over the last six weeks.  As a reminder, we remain bearish on the US Dollar over all three of our durations: TRADE, TREND, and TAIL. While sugar’s inverse correlation to the US Dollar is broken, we see this as a nice opportunity to be short the soft commodity.


This comes against a bearish supply backdrop in which the world is well-stocked with sugar – one of the few soft commodities that we can currently say that about.  The USDA recently projected world sugar production in the 2010-2011 growing season to be 8% greater than the 2009-2010 season, totaling 164 million tonnes.


A short position in SGG was added into the portfolio at $84.63. From a quantitative perspective, sugar is broken and bearish on the immediate term TRADE and intermediate term TREND durations, with upside resistance at $90.92 and no downside support.


Daryl Jones

Managing Director


Shorting Sugar - Risk Management Update - suga suga

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more

REPLAY: Review of $EXAS Earnings Call (A Hedgeye Best Idea Long)

Our Healthcare Team made a monster call to be long EXAS - hear their updated thoughts.

read more

Capital Brief: 5 Things to Watch Right Now In Washington

Here's a quick look at some key issues investors should keep an eye on from Hedgeye's JT Taylor and our team of Washington Policy analysts in D.C.

read more

Premium insight

[UNLOCKED] Today's Daily Trading Ranges

“If I could only have one thing of the many things we have it would be my daily ranges." Hedgeye CEO Keith McCullough said recently.

read more

We'll Say It Again: Leave Your Politics Out of Your Portfolio

If your politics dictates your portfolio positioning, the Democrats and #NeverTrump crowd out there have had a hell of a week.

read more

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more