Sugar futures are down 10.8% this year, ending Wednesday at their lowest level since July 2010. Sugar prices are tumbling as investors brace for a rush of supply from Brazil this year.
Even as prices plumb nearly three-year lows, investors are betting that they will drop even more. Positions that profit when sugar prices fall hit an all-time high of 212,419 contracts—worth about $4.5 billion—on April 9.
The number of these “short” contracts held by investors is up 65% from the start of the year.
The wager is that Brazil, the world’s biggest sugar producer, will report a record crop this year, leading to a huge global surplus.
via Traders Bet on a Sugar Rush – WSJ.com