Sugar Newbie question: SB or YO?

B

Brothertruffle8

I see that sugar trades as SB and YO?
What's the Difference? Why are there two? I know that NYMEX handles YO and NYBOT handles SB. But what why would a person trade YO as opposed to SB? I get the feeling that SB has greater volume. Then WHO trades YO? Growers?

I'm also trying to get my hands around why there are so many ways to trade a single commodity (i.e. mid am corn, national corn, mini corn, and plain old corn! etc.) Feel free to recomend, articles, books, other sites, etc.)

Thanks to all who help!
B "learning about this stuff"
 
NYMEX decided to attempt to pre-empt NYBOTs acquisition by ICE. As a result, they introduced all the soft electronic contracts right before ICE could role out NYBOT's contracts.

In short, there are actually THREE ways to trade Sugar #11--NYMEX electronic, NYBOT/ICE electronic, NYBOT/ICE pit. NYMEX contracts settle into cash, which makes them very unpopular with producers.

In the end, my guess is the NYMEX contracts will die leaving NYBOT/ICE's side-by-side (meaning pit & electronic are the exact same contract traded at the exact same time) SB contracts.

Several markets have one large contract and several smaller ones. Mini-Corn is very thinly traded, but full sized corn (Pit/Electronic) is very actively traded. Wheat has several derivatives--there are at least 3 major exchanges for wheat. CBOT's is the largest, but the others are important variations. Crude has a number of varieties as well. It all depends on what you want to trade!

Full size corn, soy, wheat are all very active, and a reasonable place to start in grains.

Start with CBOT's webinars (under "education"). They have some great intro-to-grains stuff.

My favorite "getting started with commodities" book was Schwager's A Complete Guide to Futures Markets. It was written in the early 80s, but is vastly superior to any modern book I've seen.

Don't forget to look at spreads in commodities. You may like them better than outrights (I do, but your mileage may vary).
 
Regarding SB - or any other well established contract for that matter:

A contract is more then a number dancing in front of our eyes.

The exchange is a clearinghouse of sorts and provider of statistics, grading, delivery services, education etc for the industry and the public.

In the case of the grains and softs this practice and tradition goes back over a hundred years.

It would be almost impossible to duplicate the particular culture by an other exchange in a short time, so in most cases the industry is going to stay with a proven venue and methods.

Regards,

GC
 
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