For investors seeking momentum, iPath Series B Bloomberg Sugar Subindex Total Return ETN is probably on radar. The note just hit a 52-week high and is up 24.30% from its 52-week low price of $52.79/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

SGG in Focus

The underlying Bloomberg Sugar Subindex Total Return reflects the returns that are potentially available through an unleveraged investment in the futures contracts on sugar. The product charges 45 bps in annual fees.

Why the Move?

Sugar futures rose to the highest level since January of 2017, thanks to a stronger Brazilian real as well as supply crunch. “As industry groups point to the end of the crushing season, heavy rainfall in top producer and exporter Brazil caused mills to leave millions of tonnes of sugarcane crops untouched in fields to be harvested next year, significantly reducing supply,” as quoted on Tradingeconomics. Plus, inclement weather in other producing countries like Thailand, Australia, and Central America also delayed harvests.

More Gains Ahead?

Currently, SGG has a Zacks ETF Rank #3 (Hold), with a Medium risk outlook.

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