Liffe Sugar (white)

DaveT

Well-known member
434 6
Bgold -

Check out Sucden's analyst comments for Sugar yesterday.

I follow these regularly :
 

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DaveT

Well-known member
434 6
Guys -

Remember the LIFFE SUGAR/COMEX COPPER MONTHLY CORRELLATION I highlighted earlier in this thread.....?

Seems to be following the script so far once again.
(ie Copper tops/falls, Sugar takes off...)

See chart attatched.
 

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bgold

Established member
532 5
Scary stuff! As I write this the trendline is still holding but fear for the worst. Even the discount of SB N-H5 spread widened beyond my "worst" expectation. Will have to re-evaluate overnight.
 

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DaveT

Well-known member
434 6
Mmmmmm.....

False breakout extraordinaire!

Perhaps your spreads/COT analysis was spot on, Bgold.

Could be caught up in the downdraft of GOLD, SILVER, and other falling commodities, as the dollar strengthens again..
 

DaveT

Well-known member
434 6
I think such violent swing moves are an inherent characeristic of SUGAR.

Technically, was it a sweeping key reversal?

Yet , to put it into context, look at the chart of OCT 2000 SUGAR below.

This was the last sharp multi-month rally in sugar.

Note a similar, sweeping reversal in July 2000. The market continued on it's merry way to 11.00 though.
 

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bgold

Established member
532 5
July Sugar made new highs and than a crash (fascinating, although it cost me a bundle on my long SB N-H5 which discount widened to -50).

Has the sugar rollercoaster finished? Unlikely, hedgefunds and small specs will have to suffer more pain before the next rally towards 800 can happen. I read that Jul sugar gets seasonal backwind in early May.
DaveT, I would agree with your Long Term view but is difficult to trade. See what happened those hedgefunds who according to Sucden report bought 10,000 contracts in yesterdays' rally. Many $millions of investor funds have disappeared in the price action of past few weeks. That will leave deep scars.

Would anyboday know how one calculates the carrying charges for Sugar? Courtney Smith states in his book that this is difficult and the market tends to ignore these charges.
If so, the fair value for sugar spreads should be near financing costs, implying that the spread Jul-March05 (~8 months) currently trades at an irrational discount.
Now, I am still rookie but experienced enough to know that that ain't be the case. :rolleyes:

Can anybody shed light or point in right direction?
thanks
 

oatman

Senior member
2,879 22
I haven't followed sugar for quite a while now but I know that a few trade houses used to control the London market. This looks like a classic of the trade manipulating the funds. Check out the open interest to see what happened.
If you insist on trading sugar, I would suggest you'll get a smoother ride in NY.
 

bgold

Established member
532 5
Thanks for reply.
I fully agree with you on comment that trade manipulated the funds. For exactly those reasons I decided to stay out other than that I put on a Jul04-March05 bull spread on.
COT showed a substantial increase in "trade" shorts.
I do also trade NY market but is just as volatile (NB I know header of this thread is not perfect but at least all posts on sugar are kept together).
Any thoughts about Sugar carrying costs?
 

BBB

Experienced member
1,071 3
Any thoughts about Sugar carrying costs?

Good point. Im going through Courtneys book at the moment - and can see why CC are so important (but will probably need a re-read to get the full grasp - Doh!)

Where do you guys get the figures from? Broker/website/other?

Are their industry standard figures, or is that the secret in spreads - accurately calculating the CC figures?

Surely the CC will vary from producer/consumer depending on who/how they use to store and finance the commodity. Therefore, surely an aggregate figure would be more useful.
 

bgold

Established member
532 5
Your guess is mine on CC's. Some are mentioned in Courtney's book. I guess they do not change that much but insight can clearlyt help establishing low(er) risk entries while using other TA methods to establish entry , targets and stops.
I will enquire with my broker but do not have high hopes.
 

oatman

Senior member
2,879 22
If you want to trade spreads in commodities, you must know the supply/demand of the physical for the period under consideration and who is holding the commodity. Additionally, technical factors such as a spot squeeze can come into play. There are all sorts of reasons a spread might move. Shipping problems, warehousing capacity, freight strikes.
Carry is just the cost of warehousing or storage + interest. The contract spec will state where the commodity can held. ie designated warehouses.
Re manipulation, I was referring more to the fact that NY does larger volume and has bigger open interest, so although it is still subject to spoofing, you should get a less choppy ride.


I was just having a nose around and yesterday's volume was London Whites 8774 NY11 Raws 84087.
Open interest, London 59308 NY 275343
I know which one I'd rather be trading.
 
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DaveT

Well-known member
434 6
Firstly apologies for the inaccurate title of this thread - Both sugar contracts can be discussed here.

I am now concentrating on Sugar #11.

I'm still bullish -

Trendline support held, and we now have a Rising Wedge forming - should be a long-term reversal pattern IMO,

Objectives 830 from the breakout above 730...

Ultimately 895-900.

Yes it's volatile, can be difficult ,but good entry off support such as today with a strategic stop can be very effective.
 

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bgold

Established member
532 5
Good move for the day. Chart looks appealing but needs to break-out at 730. However, by then its not a low risk entry any more. Spreads have come in a bit which supports the price action.
Nice tweezer bottom on the daily chart.
Interestingly, my broker sold SB N yesterday at market and recommended his clients to do so at todays' open (his clients were hosed!). Before he had a stop at 666, which in fact it never touched. No great show!

Dave, As for the title of thread, you can probably as the starter of thread change the title in "Sugar".
 

bgold

Established member
532 5
Sugar P&F chart

Couldn't resist charting SB N in PNF (tomorrow I am doing an TA exam which includes the subject, wish me luck!)

PNF confirms DaveT observation that 730 break warrants a long position (albeit with 30-65cts risk).

Upside target under vertical count is 860 while downside from here could be as much as to 580!!

Dark blue 45 degree lines show that:
Below down sloping, bears remain short &
Above upward sloping libe, bulls remain long
In summary, a nasty and bloody fight for supremacy
 

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DaveT

Well-known member
434 6
JULY CSCE SUGAR -

Rising wedge or ascending triangle?

Either way,the objective from the breakout above 725-730 is intinally the same - 830.

Need to see above 730 though.
 

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