LIFFE Sugar

Helenqu

Established member
841 3
This is a brief summary of the reading I have been doing around the LIFFE White Sugar contract. I’m not looking to trade it as yet and if I eventually do, it will be via D4F. I’d be interested in others comments, particularly in relation to anything vital that I may have missed :)

Background Information

Earliest records of sugar cane use come from China and date to 326BC. The world demand for sugar was very much involved in shaping the the modern world from the 1640s onwards as slaves were used to cultivate it in the US and South America.

There are two main sources of commercial sugar crops. Cane sugar (grown in tropical areas) and beet sugar grown in the colder areas. There is no difference in the final processed products of beet and cane in terms of taste, although beet sugar tends to be more regular in granule size. The big sugar producing countries are EU, Brazil, India, Australia, US Thailand and China.
Average per capita sugar consumption is 20.4 kg per person a figure that has remained stable for the last 20 years.


A chart of the weekly LIFFE sugar prices



Current LIFFE Sugar daily Price Chart



Details of the Futures Contract

Contract Size – 50 tonnes
Minimum tick - 0.10
Tick value - $0.10 per tonne/ $5 per contract
Margins - $605.5 per contract (day) $1211 overnight
Trading hours – Traded 09-45 to 17-30 London time.
Contracts, March, May, August, October, December
Typical spread (near month)– $0.3

Typical price movement.

Varies a lot but seems to average around 0.2-0.5 so not a killer in terms of how fast it moves.

Spreadbetting

Offered between 9-45 and 17-30 Monday to Friday.
Spread 1.2
£1 per 0.1 price movement.
Price charts on D4F are fairly reasonable.

Summary

A very liquid contract with nice steady movement and good trends.


Further Reading:


http://www.futuresource.com/charts/charts.asp?sym=LSBQ03

http://www.liffe-commodities.com/commodityfutures.aspx?targ=XW/F.LI

http://www.sucden.co.uk/sugar2.html
 

sidinuk

Established member
624 5
hi Helen,

I think the spread might be a bit of a profit killer on this one, especially SB through D4F.

As far as I can see the Average Daily Range is about 2.5 - 3.5 pts. With a spread of 1.2 pts on D4F daytrading is certainly out of the question and even longer term it could be difficult to overcome consistently.

The spread is about 33-50% of the Daily Range. In comparison the average daily range for the S&P500 is about 15 pts with a spread on D4F of 0.5, only about 3%. Even this is hard enough to beat!

Tim
 

Helenqu

Established member
841 3
Yes but D4F don't offer it :)
 

oatman

Senior member
2,879 22
Helen,

Man used to recommend "seasonal trades" and one of them was in Sugar. I just had a look on their website but couldn't find anything. Might be worth further investigation.

Cheers
 

Helenqu

Established member
841 3
Thanks, I'll check it out.

I'm just about to write up CBOT Wheat next. And I'm playing with Wilders Reaction Trend System on the FTSE so I've plenty to amuse me at the moment :)
 
 
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock