Tag Archives: US sugar

ICE increases margins on No. 11 sugar futures

ICE today announced a 17% increase in its margin requirements for the No.11 raw sugar futures contract.  Effective from 11 July 2011 the new margin requirement will be USD 2,100 up by USD 300.


No more 10% falls in less than a minute for No.11 sugar futures

In early February raw sugar futures prices on ICE fell by just under 10% in less than a minute.  Such trades will not be possible from 1 March 2011 when ICE is to reintroduce its implied matching engine.

The change will become effective when ICE’s implied matching engine resumes.  It is not yet clear what ‘acceptable trading ranges’ and ‘acceptable volatility’ means.

The implied matching engine uses an available bid to generate a spread quote which mathematically irons out the possibility of extreme price deviations. Thereby ensuring, in most cases, a correlation between different contracts and preserving the spread differential.

Not the best news for algorithmic traders.  Another proposal is the introduction of circuit breakers to prevent extreme price spikes.  ICE is consulting on the idea.

Will Mubarak drag sugar prices down with him?

President Hosni Mubarak’s sudden departure today, despite his speech yesterday indicating otherwise,  could see corrections in oil prices that have risen sharply over the past 18 days.  Despite tight world sugar supply a large fall in oil futures and naturally commodity indices could see a drop in sugar futures contracts.  The March contract is  already close to expiry so may witness downward pressure.

Following Mubarak’s resignation the military will take charge of Egypt.

Monsanto gets green light on beet sugar

The United States Department of Agriculture (USDA) has permitted Monsanto to proceed with the planting of genetically modified beet.  Monsanto’s GM sugar beets are resistant to herbicides aimed at eliminating unwanted weeds.  The USDA has granted the approval on a temporary basis until an environmental impact assessment is complete.

The aim is to avoid a drop in beet sugar production of up to 20% of US sugar.  This amounts to approximately 1.5 million tonnes.  Beet sugar production accounts for 50% of US sugar.