Sugar No. 11

Then there is the ethanol componenet to sugar, though as long as the small ag states have their vice-grip on the Senate, there's no way the tariff on sugar ethanol will be lifted, as contrary to logic and good policy as that may be.

(Low population states have so much influence in the Senate that 3% of the US population gets 50% of Senate representation.)
 
Quote from day4night:

Right, well the question is, how hard is it for producers worldwide who use sugar to switch to corn syrup? In the US we use corn syrup precisely because sugar prices are kept artificially high by gov't policies.

(Btw this backfires because corn isn't that healthy, but anyway...)

In the booms of the late Seventies the transition to corn syrup was underway but not as far advanced as now.

So what I'm saying is that maybe we don't see new all time highs, or maybe sugar has some cap on it's price, and that's about the price where corn syrup can substitute. Simple idea, but a little tough to figure out the real substitution price.

But if we can get a rough estimate then that can provide a general area where it becomes a little less dangerous to short, though I'd still only use puts or some kind of options spread like a put backspread.
More...

Agreed. I got a couple long puts out there in case the price does retrace a few cents. Shorting the futures now, though, just is too risky, a rookie mistake often, as someone here posted earlier.
 
Quote from nravo:

Agreed. I got a couple long puts out there in case the price does retrace a few cents. Shorting the futures now, though, just is too risky, a rookie mistake often, as someone here posted earlier.
More...

Couldn't agree with you more.
 
Just for your reference, page 176 of Suri's book details instructions on how to 'operate' on Parabolics.

As an example, RR did a complete reversal from 2500 seen in the weekly, fwiw.

Good luck.
 
Another option trade to consider would be to move to the Mar 10 contract buy a 22 put, sell the 19 put and sell the 27 call. The trade is close to free with a small margin, it does limit your upside but also limits the risk as long as the price doesn't zoom past 27
 
Quote from circadian:

I'm sorry, but has anyone seen the setup in October 09 sugar? This thing looks like it could be one of the best short opportunities of Q3. Anyone trade this instrument? I've dabbled a bit in it. Made a little, got stopped out alot...but, damn this thing looks like it's within a few weeks of seriously rolling over.
More...

This is a very telling post, from the day you wrote this sugar has become one of the best long opportunities of the year. Classic... just buy it and stop over thinking.

You should re-think your setups though, maybe look to buy stuff thats going up.

5yr
 
Quote from 5yrtrader:

This is a very telling post, from the day you wrote this sugar has become one of the best long opportunities of the year. Classic... just buy it and stop over thinking.

You should re-think your setups though, maybe look to buy stuff thats going up.

5yr
More...

Now what would be really telling is if I capitulated right here, and said, "Gee, golly, I was so wrong. I'm going to get long," and we saw THE top in sugar form this week. That would mean that I'm a contrary indicator right?

Well, I'll say it, "I was wrong...in my timing." I never once shorted this thing since I started this thread, so don't get all in a tizzy. I've just been waiting, patiently for the first signs of material weakness. I totally missed the boat on the long opportunity that started in this commodity in late 2008, but I am not about to commit to a long position here.

I do believe in buying when prices are rising, as it just makes sense, but to buy when prices are making new highs at an 80 degree angle is just asking for it. My memories of 2008 are still too fresh, and corn, wheat, crude, rough rice, etc. all had similar, parabolic setups that led the lemmings off of the cliff. Everyone was pounding the table on the fundamentals on those as well. Sound familiar??

You're right, I'll admit, I was wrong. That doesn't mean I'm bullish on sugar all of the sudden, b/c I don't believe in the fundamental story...it's not compelling enough to warrant these moves. As soon as the international HF's quit playing with this thing, they'll leave it in a wreck.

That being said, I'm still stalking the top while also recognizing the fact that there COULD be a month more or two of upside mania left in this thing.

Don't forget the prevailing story of 2008, or you will get wrecked. See the graphic, 5yrtrader, it's a tribute to the recent bubbles.

"What was once, shall be again."
 

Attachments

Circ can defend himself but I will also but in and say that the guy is no amateur, smarter than the average bear for sure. Let's just keep shit in this forum civil and everybody is happy.
 
You must log in or register to reply here.
Back
Top