Wt Sugar Discussion Threads

[energyi] 29/12/2002 16:58

QUOTES... screen dump:

Sugar #11 (World)
Symbol Month. ..Date.. ..Time*. Open High Low. Last. .Chg Volume OpenInt DTE
SBF03 Jan '03 12/27/02 12:26:47 7.45 7.45 7.35 7.40s -0.01 2 119 367
SBH03 Mar '03 12/27/02 12:26:48 7.48 7.48 7.41 7.43s -0.04 2307 123133 61
SBK03 May '03 12/27/02 12:26:48 6.86 6.87 6.84 6.85s -0.04 526 29677 122
SBN03 Jul '03 12/27/02 12:26:48 6.27 6.28 6.25 6.25s -0.04 466 23786 183
SBV03 Oct '03 12/27/02 12:26:48 6.11 6.11 6.07 6.07s -0.03 375 24365 275
SBF04 Jan '04 12/27/02 12:26:48 6.10 6.10 6.10s -0.20 6 397
SBH04 Mar '04 12/27/02 12:26:49 6.10 6.10 6.05 6.05s -0.02 426 10152 458
SBK04 May '04 12/27/02 12:26:49 5.88 5.88 5.88 5.88s -0.02 16 2769 519
SBN04 Jul '04 12/27/02 12:26:49 5.64 5.66 5.64 5.65s 0.00 144 4170 579
SBV04 Oct '04 12/27/02 12:26:49 5.65 5.65 5.65s 0.00 81 2620 670
:SOURCE:

- - -
IS it very RISKY to
BUY: May'04 Sugar at 5.88 cents?
with:
1. Dollar under pressure
2. Commodity prices looking stronger
3. The possibility of a strong cyclical upswing sometime in next 18 months
4. An apparent "floor" at 5cents
5. May being the seasonally "best month" to own

[energyi] 29/12/2002 15:16

Jim Wyckoff Discusses Trading Options on Futures
By Jim Wyckoff

Purchasing options on futures is a way to participate in futures trading with limited financial risk. You can also sell (write) options on futures contracts, but your financial risk is not limited like it is when you buy a put or call option. I won't get into selling options in this feature.

Many beginning (and even veteran) traders may think options trading is too complicated, and they don't have a clue about the vega, theta, delta and gamma pricing formulas--or the strangles, straddles, butterflies and other such options trading methods. Well, don't worry. I'm not going to get into those strategies in this column.

Entire books have been written on options and options-trading strategies, but I will only focus on a few basic low-risk and limited-risk trading strategies for beginning traders (and veterans, too). I'll also briefly talk about using options to "hedge" winning straight futures trading positions in volatile markets. I do suggest that if you are interested in trading options, you should read a book or two on options trading. Again, you don't have to be a rocket scientist to employ simple options-trading strategies.

First, I am going to assume readers know the definition of an option on a futures contract, and also the difference between a put option and a call option and "in the money" and "out of the money." (If you don't know the meaning of these terms, that's okay. Just go to one of the big futures exchange websites, and you can find a glossary of trading terms, digest the options terms and then read this article.)

A couple years ago when crude oil futures prices were rallying to sharply higher levels, it was tempting for many traders to want to short that market at those lofty price levels. However, remember that to successfully trade futures you not only have to be right on market's price direction, you also have to be correct on the timing of the market move. Furthermore, you can be right on market direction and very close to being right on timing the trade, but still lose your trading assets because of market volatility. In crude oil, for example, a trader could have established a short position two days before the top in the market was in, and still be stopped out and lose his trading assets because of the high market volatility.

Purchasing options allows you to limit your financial risk and let's you ride out volatile market swings without the worry of increased margin calls.

Buying a put or a call that is "out-of-the-money" is a relatively inexpensive way to wade into futures trading. The money the trader lays out to his broker for the option purchase is all the trader has to worry about losing. No margin money. No margin calls. He can sleep well at night. And he is still trading futures, learning the business, honing his trading skills.

Here's another trading tactic to think about regarding purchasing options in volatile markets. Just because you have a protective buy stop or sell stop in place when trading straight futures contracts, that does not guarantee you will get out of the market (filled) close to your stop. For example, weather markets in the grains and soybean complex futures can produce limit price moves--and on rare occasions for two or more sessions in a row. If you have a straight trading position on in soybeans and the market moves against you by the limit, or multiple limits, your protective stop is virtually worthless. But if you had hedged your straight futures position with a cheap out-of-the-money option purchase, you have limited risk in a volatile market.

Let's say you are long soybeans at $5.50 in a highly volatile weather market. You initiated that trade on the long side, but then decided to purchase a $5.00 put option that limits your trading risk to 50 cents a bushel ($2,500 per contract), plus the price of the put option purchase. The trade-off here is that you are gaining peace of mind and losing some profit potential. But for many traders, that's well worth it. You can stay in the game to trade again another day, and won't get wiped out by any limit price moves.

There are trade-offs in purchasing and trading options on futures, as opposed to trading straight futures. If you purchase "out-of-the-money" options, the market has to move in your favor for a period of time before your option becomes "in-the-money." Importantly, during periods of higher market volatility, the prices of options (the premiums) can and usually do increase substantially.

One more thing: Anyone considering trading options on futures needs to check the open interest level on the particular "strike price" they are contemplating trading. Just like in straight futures trading, the more liquid (higher open interest) strike prices and options markets are usually more desirable to trade.
:LINK:

[sugarbeast] 11/12/2002 08:38

don't be short!

[energyi] 11/12/2002 08:36

A comment from the recent Salomon Smith Barney report about...
SUGAR:
The sugar market has had a very strong rally and is beginning to show potential for a negative momentum divergence. A 50% retracement of the decline from 11.40¢ to 4.97¢ is currently at the 8.18¢ level and we anticipate strong resistance.

There is also lower resistance at the 8.05–8.07¢ range as shown. We think any
additional short-term strength should be used to book profits if long.

[energyi] 03/12/2002 16:09

Sugar bounced from 6.75

[energyi] 18/11/2002 21:50

FUTURE... SBH3: 6.82 -0.25 ...... target: 6.40 or lower
OPTION PRICES :
Call SBG3 5.50 1.36 -0.24 1.36 1.36 1.36 1.60 53
Call SBG3 6.00 0.92 -0.22 0.92 0.92 0.92 1.14 53
Call SBG3 6.50 0.57 -0.21 0.57 0.57 0.57 0.78 53
Call SBG3 7.00 0.30 -0.17 0.30 0.30 0.30 310 0.47 53
Call SBG3 7.50 0.16 -0.08 0.23 0.23 0.16 0.16 70 560 0.24 53

Vol. Calculation: 6.82atm:
6.50 0.57
6.82 x.xx 0.57- 0.27x64%= 0.57- 17= 0.40
7.00 0.30
- - -
0.40 x365d/53d= 19.1/7.28= 1.05
1.05 x2 x1.25= 2.63
2.63/ 6.82= 38.5%

CALL target: 6.50call: 0.35 within this week, if FUT at 6.40??

[energyi] 18/11/2002 21:33

SUGAR looks like it could drop to: 6.3-6.5 cents before the next rally
...
Goldman AGRIcommodity index:
- - -
FRIDAY COMMENT: November 15th 2002, 3:15 PM
ODJ CSCE Sugar Review: Up; Mar Scales 7c On Trade Buying
--Brazilian Businesses Shut Friday For Holiday
--Taiwan Auctions Raw, White Import Permits Tues.
--Indonesia to Buy Whites This Winter for Jan.-Feb.
--London Dec Expired Friday In Plus Column

By Susan Buchanan
New York, Nov. 15 (OsterDowJones) - World raw sugar futures sped to three- day highs on the Coffee, Sugar & Cocoa Exchange Friday as a trade house bought Mar spreads, lifting that month above 7.00c a pound and through a gap. Speculators were buying and selling.

Mar settled 20 points higher at 7.07 cents, and May closed up 17 points at 6.56c.

Opening mixed, Mar touched a session low of 6.85c at that time. A U.S. trade house bought the Mar/Jly switch, and the market rebounded. Mar entered a gap and rose 11 points on the day to 6.98c. After a setback, Mar resumed its advance, clearing 7.00c and filling a gap to 7.02c.

Buying by locals and speculators pushed through producer selling. Mar climbed 21 points to 7.08c in late action.
- - -
18/11/2002 - COT shows lower spec long position
Fridays commitment of traders report showed funds and small specs together net long of 94033 lots of CSCE world sugar futures as of Tuesday after being net long of 103889 lots the week before more .....

15/11/2002 - White sugar exports could head for Russia in December
Analysts RSI say a window of opportunity exists for an increase in white sugar imports into Russia in December more .....

15/11/2002 - Maharastra to provide mills with export subsidy
Maharastra's state government has approved an export subsidy for sugar millers of RS1000/mt more .....

[energyi] 18/11/2002 21:25

Under Development
Cocoa Futures and Options


COCOA FUTURES look very interesting on ...

[energyi] 18/11/2002 21:20

Coffee Futures and Options


COFFEE FUTURES look very interesting on ...

[energyi] 18/11/2002 21:04

indalo,
I was NEVER short gold. Long gold mining shares, I am

[indalo] 18/11/2002 20:46

SSSSmiiiiillllle!.......It's Tate&Lyle

Energyi, are you still short gold?

regards,

[energyi] 18/11/2002 20:31

Sugar Futures and Options . . . . . :





SUGAR FUTURES look interesting on ...
Monthly Chart ...

PRICES HELPED by: rise in demand was attributed to ethanol production in Brazil where the sale of "flex-fuel" cars, which are able to operate on either petrol or ethanol





- - -
SEASONALITY (J. Wyckoff):
Sugar: Prices tend to peak in November because of a combination of supply and demand. Production at this time is not complete, as the European crop is not yet on the market. Demand in the Northern Hemisphere, however, is usually at its peak in the fall.

- - - - -

SPECTRUM's SUGAR SUMMARY (excerpt):
A salient feature of the world sugar market is increasing stocks. World production of sugar has been increasing for several years and as production exceeds consumption over time, stocks of sugar increase. Stocks of sugar have gotten progressively larger and larger. This, in turn, has put pressure on prices which remain at historically low levels. For 1999-2000 (September-August), the fundamental outlook in sugar is likely to remain one in which production increases and stocks increase.
...
World production of sugar in 1999-00 has been variously estimated at between 132 and 136 million metric tonnes (raw value). World production has been trending higher and with that stocks have increased. Brazil remains the dominant producer of sugar and the largest exporter. Much of the increase in world production over the last ten years can be attributed to increased Brazilian production. Production in the 1999-00 season is likely to approach 18-20 million tonnes.

Link:
- - - - -

Trading Hours:
London Sugar: (No.5): 8:45 - 5:30
N.Y. Sugar: (No.11).: 2:00 - 5:00

Sources of quotes, news charts:
US based, free:
UK based, paid:

- - - - -
SOME SUGAR-related companies:
Symbol.. Company
OLOK- Olokele Sugar Ltd OLOK
IPSU- Imperial Sugar Co New IPSU
ADGSF Atlantica Del Golfo Sugar Co ADGSF
VECG- Vertientes Camaguey Sugar Co VECG
SSUG- Sterling Sugars Inc SSUG
RJSCF Rajshree Sugars & Chems Ltd RJSCF
..
IPSU, VECG, SSUG
. .

- - - - -
LINKS:
SugarOnline:
Quotes:
INO charts:
Options:
Jim Wyckoff:
Spectrum Comm.:

Commodity threads:
Coffee------:
Corn & Wheat:
FreightShips:
Orange Juice:
Soybeans----:
Sugar-------:

[deltablues] 07/10/2002 13:30

Found that sugar article!

(requires Adobe Acrobat to read it)

[realale] 17/9/2002 11:14

Woohoo, oil-get down boy!!!
Sugar 11 looks good for a long, thanks people. Whoever has charts for 1 year, try this link:

I'm off for a laugh at the TAD threads, it went up 2p yesterday you know :o)
realale

[deltablues] 16/9/2002 14:46

New thread started

[energyi] 15/9/2002 14:42

New Thread?
Maybe someone should start a SUGAr or COMModities thread,
and pus some charts (like #14) in the header.

This could be the time for commodities

[deltablues] 15/9/2002 10:07

Any thoughts on actually trading commodities for those of us who just want to dip a toe in without having to fund a "real" futures account? IG Index look like a good proposition (well better than they are for shares anyway):

1. Minimum bets smaller than the contract size on the futures markets.
2. No delivery - can hold to expiry without a railroad boxcar full of live cattle turning up on your doorstep.
3. Can still trade when market goes limit up/down.
4. Can trade open outcry markets without the associated delays, slippage and missed fills.
5. Controlled risk bets - commodity markets can gap all over the place, especially at major turning points.
6. Profits tax-free, should you be lucky enough to make any.

Disadvantages we all know about - wide spreads (very wide in some cases) and losses can't be offset against tax.

Alternatively using a real broker to trade e-minis (not the ones in the S&P!) and options. I'm looking at - anyone have any experience with doing this?

[trumpet] 14/9/2002 16:02

Have been looking at commodities now for a few months now.

Should have done more buying and less looking ;-)

[deltablues] 14/9/2002 12:08

Thanks E. This guy was talking extremely long term, as in a few decades! Though that chart looks good as well.

In the broader picture, commodities are definitely worth a look as many are showing signs of slowly emerging from ten or twenty year bear markets. Could roles be reversing as stock markets enter the doldrums? Who knows. There does seem to be a general move away from valueless bits of paper towards real businesses that anyone can understand which produce real goods and make real profits, and things don't come much realler than commodities!

Jess Livermore said that he considered speculating in commodities to be more "legitimate" than stocks. What did he mean by that? Commodities are goods that everyone depends on, goods that the world around us is built of. Speculation in commodity futures can be justified as determining the fair price of these goods and offsetting the risks taken by both the producers and consumers of these goods; it has clear economic value. It's much harder to find an economic justification for share trading; true, it does create secondary market liquidity, which in theory makes it easier for companies to issue shares and raise capital, but any company which even hints at doing this gets severely punished. Large companies avoid the secondary equity market like the plague and use the corporate bond market instead to raise capital whenever they can.

There's been a lot of talk about low inflation. True, consumer/retail prices are rising very slowly, but we should remember that the definition of inflation is "too much money chasing too few goods" and consumer prices are only one symptom of inflation. The US money supply has been growing at an incredible rate over the last 5 years or so. First this went into the stock market, then it moved over to the housing market. Could the commodity markets be next? The US monetary injections of the early 70s saw the "nifty fifty" bubble of 1972 followed by an explosion in commodity prices in 1973, although that may have been affected by price controls being lifted; many commodity prices had already doubled even before the OPEC crisis occurred.

[energyi] 13/9/2002 15:49

March 2003 Sugar:



Link: Ino:

[deltablues] 13/9/2002 14:37

techair, I keep an eye on commodities, but don't follow them closely enough to trade yet. Talking of sugar, recently saw some TA analysis claiming it has broken out from a very long term triangle pattern, but can't remember where now.

[realale] 13/9/2002 13:49

Bit late on pork bellies too, but palladium still relatively weak.
realale

[techair] 13/9/2002 11:52

Like wheat