Sugar Action

[GJB]

Quote from Surprise:

what about sugar Jul/13 it is at 17 cents , is it a good investment to buy into this backwardation for long term investing ?

This is a broad question and one which could require a thesis to answer???

If you are only asking about using far out contracts in backwardation then you can indeed make a good profit without any spot price movement. You can essentially have a fall in the spot price of sugar between now and jul/13 and still make money.

If you are asking about more than just this dynamic then you need to specify this more succinctly.

You will need your own forecast for sugar prices which is well based in fundamentals and the historical price action of sugar. Ultimately a strategy like this could be traded with low risk if you believe sugar will not fall below a certain level so this could be a good play. If you want others to give you their forecast on sugar then you can only ask or search the web but you should have your own.

 

[Surprise]

Quote from GJB:

This is a broad question and one which could require a thesis to answer???

If you are only asking about using far out contracts in backwardation then you can indeed make a good profit without any spot price movement. You can essentially have a fall in the spot price of sugar between now and jul/13 and still make money.

If you are asking about more than just this dynamic then you need to specify this more succinctly.

You will need your own forecast for sugar prices which is well based in fundamentals and the historical price action of sugar. Ultimately a strategy like this could be traded with low risk if you believe sugar will not fall below a certain level so this could be a good play. If you want others to give you their forecast on sugar then you can only ask or search the web but you should have your own.

dah !!

 

[heech]

Wow. Any longs not paying attention in sugar the last two days is in a world of pain.

I know sugar is prone to ridiculously high momentum moves... but I don't know if I've ever seen 25% in two days before. I want to see someone describe this thing using a normal distribution.

 

[slimpickingsfor]

Quote from maninjapan:

Newbie question here, maybe not specifically related to Sugar....
But I am watch sugar at the moment and the price action is quite interesting. Spike up to the high and now it is stuck in about an 8 tick range for the past hour. a few big sell orders right on the high tick, just sitting there happy to get picked at slowly by the bidders. price comes back down a bit but zero follow through from the sellers.

My question is, is this usually a more bearish signal, Buy side dont seem interested in following through and will soon give up bringing the price crashing down, or a more bullish signal. Sell side just trying to protect the high and the lack of confidence from the sell side to come in and sell it back down meaning its just a matter of time before the buyers eventually break through.


Or is this a too close to call, need to wait for a break either way....

Anyone else trading sugar at these levels, or watching it who might have a comment?

ETF(SGG) has worked quite well for those not wanting to play the futures or options.

 

[emg]

to all sugar #11 traders. I would buy oct 2011 sugar call option deep out of the money. maybe around late 30s or in the 40s strike price. try to get it less than $500 per option