Sugar No. 11

Well, I'll also say that after seeing several spikes, esp in ag, I spent a good number of hours trying to figure out how to play them. Plants grow back, weather changes, seeds improve, there are substitutes. So if you look at a long-term monthly chart, like in a big CRB book, you find that there's a kind of "normal" range, usually falling over time, of prices punctuated by spikes. Actually really long charts show the same thing, going back hundreds of years. Hard to tell how high the spikes can go, but they usually fall. Of course something like hyperinflation would be a different story...

So there are great shorts to be had, and when a spike is in place you know you can start looking. The spike could last a while, however.

I also realized that futures wouldn't do it. Far too dangerous. Maybe spreads, but even there it can be really hairy esp w/ new vs old crop dynamics. These spikes are the stuff of limit days...

So options. Long puts, and small bets with big payouts. "Lottery tickets" but with lots of time. And cheap enough that you can be wrong several times, but when you are right, it's all paid back and more.

I recommended many people buy 9 dollar mar soybean puts when beans were at $16. Those things exploded and i mean exploded! A $100 option literally turning into $10,000! People really thought i was crazy b/c they thought beans were going up up up up to $25.

I didn't know the crisis was coming, a recession, ok, but not the huge credit crunch. I did think oil would fall but not all the way into the 30's. Though I was telling people it could fall "to 45" -- so even I, thinking I was being extreme, was underestimating the real moves of the market. The monthly charts show it though -- spikes higher have come crashing down time and time again. And while the upside of a spike can be hard to predict, a spike usually only lasts so long once it goes parabolic.

So to me it's not dumb at all to look for shorts in a spike. Plus, you're doing a good deed. Nobody needs sugar at 25 cents let alone 40. Just like beans at $16 or corn or wheat way high literally can cause starvation. High prices bring the relief, but the spike is the unnecessary market madness part usually... People shouldn't starve because of a short squeeze of because of trend followers...
 
Quote from day4night:

Well, I'll also say that after seeing several spikes, esp in ag, I spent a good number of hours trying to figure out how to play them. Plants grow back, weather changes, seeds improve, there are substitutes. So if you look at a long-term monthly chart, like in a big CRB book, you find that there's a kind of "normal" range, usually falling over time, of prices punctuated by spikes. Actually really long charts show the same thing, going back hundreds of years. Hard to tell how high the spikes can go, but they usually fall. Of course something like hyperinflation would be a different story...

So there are great shorts to be had, and when a spike is in place you know you can start looking. The spike could last a while, however.

I also realized that futures wouldn't do it. Far too dangerous. Maybe spreads, but even there it can be really hairy esp w/ new vs old crop dynamics. These spikes are the stuff of limit days...

So options. Long puts, and small bets with big payouts. "Lottery tickets" but with lots of time. And cheap enough that you can be wrong several times, but when you are right, it's all paid back and more.

I recommended many people buy 9 dollar mar soybean puts when beans were at $16. Those things exploded and i mean exploded! A $100 option literally turning into $10,000! People really thought i was crazy b/c they thought beans were going up up up up to $25.

I didn't know the crisis was coming, a recession, ok, but not the huge credit crunch. I did think oil would fall but not all the way into the 30's. Though I was telling people it could fall "to 45" -- so even I, thinking I was being extreme, was underestimating the real moves of the market. The monthly charts show it though -- spikes higher have come crashing down time and time again. And while the upside of a spike can be hard to predict, a spike usually only lasts so long once it goes parabolic.

So to me it's not dumb at all to look for shorts in a spike. Plus, you're doing a good deed. Nobody needs sugar at 25 cents let alone 40. Just like beans at $16 or corn or wheat way high literally can cause starvation. High prices bring the relief, but the spike is the unnecessary market madness part usually... People shouldn't starve because of a short squeeze of because of trend followers...
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I am on board with this, essentially doing a Black Swan play, buying the best-priced, lowest-vol OTM puts you can find each month, and be willing to lose for quite a few months in a row, until you hit it right and then recoup you previous losses and then some.

Going long futures insured with a long put seems the only other sensible (but expensive) play, unless you have gap-proof stops and want to risk going long that way.

Anyone looked at the vols on the SB options lately?
 
Will Jim Rogers be back on Bloomberg pumping the hell out of SB the second we break through .2475?

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Quote from nravo:

Take a look at the chart on today's Oct. Futures. Short Term double top? Support at 21.25, then $19.50? Thoughts?
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Agreed, if 21.25-21.50 cannot hold support, SBV9 will see 19.50-20.00 pretty quick.

Maybe Frank Dux will come in and give it the Death Touch.
 
A sugar/corn syrup sin tax would look pretty good right now. Might pay for the health care reform as well.

2009-08-24_184723.gif

U.S. heart group draws hard line on sugar intake
Mon Aug 24, 2009 4:35pm EDT

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By Julie Steenhuysen

CHICAGO (Reuters) - Americans need to cut back dramatically on sugar consumption, the American Heart Association said on Monday in a recommendation that is likely to rile food and beverage companies.

The group said women should eat no more than 100 calories of added sugar per day, or six teaspoons (25 grams), while most men should keep it to just 150 calories or nine teaspoons (37.5 grams).

That's far below the 22 teaspoons (90 grams) or 355 calories of added sugar consumed by the average American each day, according to a 2004 government survey.

The guidelines apply to any sugar or sugar syrup added in food processing or at the table as opposed to sugar found naturally in food such as fruit.

But the researchers take particular aim at the estimated $115 billion U.S. market for soft drinks, which Johnson said represent the No. 1 source of added sugars in the American diet.

"For the first time we've created specific recommendations about the amount of sugars that can be consumed in a heart-healthy diet," Rachel Johnson of the University of Vermont, lead author of the policy statement published in the journal Circulation, said in a telephone interview.

Johnson said U.S. labels on packaged foods do not distinguish between naturally occurring or added sugars, but she said anything labeled "syrup" in the ingredients list is likely an added sugar.

Too much sugar not only makes Americans fat but also is a key culprit in diabetes, high blood pressure, heart disease and stroke, according to the report.

Prior heart association recommendations issued in 2006 recommended people minimize intake of added sugars. Now the group is eliminating any room for doubt, Johnson said.

U.S. Department of Agriculture dietary guidelines are less specific. They recommend decreased intake of food or beverages with added sugars as a way to maintain a healthy weight, but they do not give specific calorie limits.

The heart association report focused on added sugars, not naturally occurring sugars in food.

LIQUID CALORIES

"Over the past 30 years, total calorie intake has increased by an average of 150 to 300 calories per day, and approximately 50 percent of this increase comes from liquid calories (primarily sugar-sweetened beverages)," the report reads.

And daily consumption of sweetened soft drinks rose 70 percent between 1970 and 2000. One 12-ounce (0.35 liter) can of regular soda contains roughly 130 calories, which exceeds a woman's daily discretionary sugar budget.

While the experts said no single food or food group is the primary cause of the nation's obesity epidemic, they said many studies have shown a correlation between higher intake of sweetened beverages and obesity.
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The beauty of it all is Sugar #11 currently has no daily price limits :D

Only problem is that everyone is bearish on it so we know what happens....

Quote from covered_call:

Technical indicators often lead news that can change the market. Look at the failure on volumne delta and failure(s) in stohs. Sugar is in for a big drop.
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