this news article talks about upward movement in sugar which I feel can only possible if funds pour in money in anticipation of shortfall in production from 2008-09 onward. I hope that actually happens b'se that will regenerate the interest of many traders and fund managers back in this commodity, making Sugar one great place to judge one's trading skills.
Maize, sugar and cotton may gain the most among agricultural commodities in 2008 because of a shortage of farmland, says Diapason Commodities Management SA, the Swiss-based fund manager overseeing US$75 billion, according to Bloomberg. “We're seeing a war for acreage right now,” Stephan Wrobel, chief executive officer of Diapason, said in a telephone interview from London. These commodities have just been through corrections and the catalysts for change are now appearing.” He declined to forecast prices. Sugar, the second-worst performing commodity this year after orange juice, has plunged 17% because of a glut in world supplies. Maize is down 6.3% from a 10-year high in February, while cotton has dropped 3.4% this year. Standard & Poor's GSCI Agriculture Index has advanced 33% this year as wheat rose to a record and soybeans climbed toa 34-year high. Droughts in wheat producing nations hurt crops, while farmers cut soybean plantations to sow maize. Rising demand from emerging economies such as China and India and worsening supply constraints will help buoy agriculture prices in the next several years, Wrobel said. Pension funds and other money managers still have limited investments in commodities, he said.Commodities should make up 5% to 10% of an investor's holdings, compared with about 1% to 3% now, he said. “The shakeout following the subprime mess is making people realize that their commodity allocations are still pretty low,” Wrobel said.
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