Great posts guys, has there been any studys done on harvesting the methane from the Supersize value meal eating American Fatass. Yes give me the Nobel prize for science. Prof. Rennick out
Before analyzing domestic sugar plays, bear in mind that the sugar market in the US is distorted since we can't fully and transparently participate in trading in world sugar (sugar11) due to local sugar lobby. I am not sure of the specifics but back when sugar was at 5 cents, Coke and Hersheys stil could'nt but it there but have to but it at 15 cents above,etc. Why do you think they use Corn syrup? Sugar 14 is pretty fixed vs. sugar 11 so just be aware of such arrangement. which could screw up arb trades.
Glad to see a lively thread developing. Things I've been musing: Why the forward months in the futures trade at such a discount to spot? Octo 07 at 15.87 vs May 06 at 17.23 ? If one is bullish then buying the deferred makes the most sense as you have a natural "carry" into the trade , holding everything else equal, the price should rise as time evolves. Thinking of selling 13/12 bull put spreads in Oct 07 sugar; concerned parabolic move underway though. Also thinking using the proceeds of the bull put spread to buy a nearer dated call, like an Oct 06 19.5 call. Seems there were a lot of deliveries into the March expiration. Hearing some players believe this overhang will pressure May. Hearing some think May/July spread goes from 30 to even, to possibly negative. Thinking corn is probably better since you can get in almost grassroots, but corn has a negative "birdflu" possibility and more susceptible than sugar. Also thinking corn probably more likely to be US staple of ethanol rather than sugar. Would love to learn more about seasonalities in sugar. Right now all I know is that after Carnival in Brazil it is crop harvest time. What is the diff b/w Sugar 11, Sugar 14 and Liffe Sugar 5 ? Cheers
I don't know much about liffe but sugar 14 is local sugar which is set in a trading band due to laws. Sugar 11 is World sugar freely traded.
here is the sugar play--buy a small amount of the active contract and when the price dips, buy more. Start small so you don't overextend. Roll the longs into the next active months. It may take years but it will be explosive. 70 cents at a minimum. By the way, I use the same strategy in corn from November thru May. Corn though is not as explosive--you don't have the world's biggest producer diverting a huge portion of the local crop for ethanol
also, regarding IPSU (Imperial Sugar) * If they buy raw sugar then wouldn't their margins be getting compressed ? *The price of sugar on the shelf, from what I understand really isn't changing that much - brings into question elasticity of demand. *Is imperial at all vertically integrated?
Corn is different that Sugar. Corn is a market in Contango ; Sugar in Backwardation. It's cheaper to buy spot in corn than it is in Sugar so the strategy wouldn't work the same Buy1
works most every year in corn. I buy the July contract starting in November and buy the dips, then sell in the spring. Then, I look to short the Dec. and average up. (difference is that the July is not the active contract when I start)
the nice thing about corn is that you can buy the mini contract and do your averaging if you are a smaller cap guy Also, I would forget about buying sugar stocks and rather you should just trade the commodity. Returns are about 3 times as much. Actually, that goes for all physical commodities.
buysell, Is the price of Corn cyclical rises every spring and declines every december? I have not followed Corn, so any info would be helpful thanks Steve