Liffe Sugar (white)

DaveT

Well-known member
434 6
Liffe Sugar (white) / CSCE SUGAR #11

SUGAR gets very little coverage here - so i'll kick off with my analysis of WHITE SUGAR (LIFFE).

Fundamentals - (RAW)
------------------

World raw sugar production DOWN
- 03/04 est 146.8 (vs 149.9)

Global consumption UP
- 03/04 est. 143.2 (vs. 139.4)

Supplies hit by expected drop in output in India, Russia, EU, Thailand., due to unfavourable weather.

Lowest Stocks-to-use ratio in 6 years. Small global deficit (270,000 MT) forecast. Chinese demand to follow?

Fundamentals (WHITE)
-----------------------------

Tightening deliverable supply scenario.
Expected demand increase.


TECHNICALS - I'll post 3 charts.
----------------

DAILY CHART -

(MAY04) has shown a steep rise since the new year.
A nice saucer/rounding bottom has formed.
The London market is showing greater strength than CSC (NY).
RSI wedge breakout is at overbought, so could fail - correction due?
 

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DaveT

Well-known member
434 6
WEEKLY CHARTS
---------------------

Moving averages crossed and pointing up.

Momentum studies signal new uptrend - I've used SLOW STOCHASTIC (4,26,52) - note crossing.

Commodity Channel Index is firmly above 100 - V. Bullish - similar to early 2000 rally ? (see highlighted areas)

A broadening channel has formed - A break of this would signal higher levels.
 

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DaveT

Well-known member
434 6
MONTHLY CHART
--------------------

For the monthly , I've compared LIFFE SUGAR to HG COPPER.

Just to highlight the APPARENT broad correlation.

It really shows how the commodities often follow eath other in MACRO-ECONOMIC TERMS.

Will SUGAR experience a strong bull market within 1-2 years, following COPPER as in the historical past?
 

Attachments

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TWI

Senior member
2,536 254
Dave T - Fascinating correlation, I never noticed that before . Would be a great spread by the look of it. I wonder what the relative contract ratio is.
 

oatman

Senior member
2,879 22
Hang about.....we'll be on the Coffee/Cocoa spread soon :confused: :cheesy:
 

scpope

Junior member
33 0
DaveT,

slightly off topic, but how did you discover the apparent correlation between copper and sugar? was it just lots of research/trial & error?
Do you know the differance between sugar #5 and #11. These are both quoted on Finspreads for us sb'ers.

Thanks Stephen
 

DaveT

Well-known member
434 6
scpope -

Sugar #5 is WHITE SUGAR (refined) - traded on LIFFE, in London.

Sugar #11 is RAW SUGAR (unrefined) , traded on CSCE, New York.

Both types are produced from CANE or BEET.

Sugar CANE represents 60-70% of total production.
Sugar BEET represents about 30-40% of production.

Largest Producers (of Cane & Beet) :

1) Brazil
2) India
3) EU, China, US , Thailand, Austrailia

Largest Consumers :

1) India
2) EU
3) China
4) Brazil, USA, Russia, Mexico, Indonesia.

Regarding the SUGAR/COPPER correlation: I am always comparing & contrasting different commodities/securities/markets,etc.

If you look at enough charts you will begin to intuitively see the relationships; positive, negative, or neutral.

I
 

scpope

Junior member
33 0
David,

Thanks for the reply. I am probably guilty of not looking at charts over a long enough time frame. Frequently I find that good looking trades from daily charts look less appealing on weekly charts. Must learn to also look at monthly.

Last July I went for a job interview assessment day. On the same day their was an engineer who had just been made redundant from a sugar processing mill in London. He was explaining that this was due to the imminent deregulation of the European sugar market. ie. the removal of subsidies or trade barriers or similiar (details foggy due to time not age!) making imports cheaper and hence processing being reduced inside EU. Do you know if this has happened yet. I imagine it would have a positive effect on futures price, if it lead to international prices rising.

Stephen
 

TWI

Senior member
2,536 254
I could not see a similar relationship between CSCE sugar and Comex Copper. maybe I am not manipulating the figures correctly. Dave T what software are you using to get these charts?
 

DaveT

Well-known member
434 6
twalker -

I'm simply using FutureSource.com Premium FREE charts, copied and pasted to My Pictures, and edited with Paint application.

I agree the COPPER correlation doen't appear with CSCE Sugar.
I just observe the markets and record my findings.

Don't always look for the whys and wherefores....

scpope - interesting re. EU sugar deregulation.
 

DaveT

Well-known member
434 6
Re COMEX COPPER/ CSCE SUGAR -

Maybe you need to plot CSCE SUGAR #11 on a different scale to illustrate a similar relationship as LIFFE SUGAR/COMEX COPPER ?
 

bgold

Established member
532 5
DaveT, Good call on sugar. Hope you are long. Hope you are long. I am playing Comex July contract at 596. Sentiment is strong. Not only are we up 3.5% in May contract but also calendar spreads are coming in rapidly. Good sign for more positive action.
 

DaveT

Well-known member
434 6
A BIG PLUNGE IN SUGAR TODAY -

LIFFE WHITE SUGAR -

See on the weekly chart how DOWNTREND RESISTANCE has been met - price bounced down off the trendline to form a spike bar.

A break of this trendline, without recrossing, is needed to confirm a new long-term bull market, IMO.

Based on my COPPER/SUGAR monthly comparison, it should only be a matter of time.
 

Attachments

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bgold

Established member
532 5
Thanks for chart. I should have seen it before yesterdays' collapse. Was long SB N4 from 5.96, sold 1/2 position at open at 7.03, rest was stopped out 6.78, which I fear I will regret. We'll see. Yesterday may just have been a sharp correction.
May Sugur bounced off M-line of 11 March and closed near .382 retracement from 554 lows in Feb. I find the July chart more confusing; appears to have more downside potential.
 

fillyerboots

Member
94 0
Dave T

Perhaps you know the answer to this question:

How much of the recent (1yr) price increases in base metals like copper is due to the weakness of the dollar? Is this the most important factor or is Chinese demand more important?

Are base metals prices markedly higher on an indexed basis?
 
 
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