RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

This week’s comment finds a sugar market consolidating and switching between wire service reports of large supply and large fund short position.  The ‘risk off’ mentality and severe testing of trend followers, as outside markets react to the 10% correction underway in the stock market, may ironically be good for the March sugar futures.  The large short position held by commodity fund traders could be cannibalized as risk managers help traders under duress find profitable positions to offset in order to fund positions that are underwater. The Hightower group has done a great job of highlighting the possibility that South American producers could continue to shift from sugar to ethanol thereby reducing the supply of exportable sugar from one of the largest producing regions of the globe.  This is one bullish fundamental the market has been able to hang a hat on as we have worked higher but has faded as the crude oil market has also come under pressure. The March contract has done a good job of stabilizing and trying to retrace almost half of the recent move to new lows.  Still, with the March contract unable to close above the 50-day moving average, currently coming in near 14.17, this places some importance on holding the 18-day moving average, 13.48, at the time of this writing.  If the March sugar futures demonstrate an inability to close over the 50 or hold the 18 that would signal the price action from the last two weeks is merely consolidation and new lows are likely.

Sugar Mar ’18 Daily Chart

sugar_mar18_daily_chart

Joe Nikruto

Joe Nikruto attended Indiana State University and DePaul University in Chicago with a major concentration in economics. "It was during college that I got a job as a runner at the Chicago Board of Trade. I was immediately hooked," he says.He adds that he also enjoys futures trading because anyone can do it. "Your success depends on how you handle the risk and how much work you are willing to put in. You don't need a big-time Wall Street connection, or a degree from an Ivy League school to get started. Your success largely depends on you and what you put into it." In 1992, he started as a runner and back office clerk for a very large futures commission merchant (FCM). He moved up to pit clerk, then research associate working on the trading floors directly for a grain and livestock concern based in Memphis. He spent time on various trading desks for a large retail FCM and then became Series 3 registered in 1997. He also helped develop an online trading platform and consulted on development and trading of mechanical trading systems. He has always worked to assist his clients with all types of trading-from option strategies and hedging to complicated mechanical trading systems. His advisory background includes Floyd Upperman, McMaster, Walter Bressert, Ken Roberts, Tech Guru, Hightower, Helms and Barry Rosen. As for his involvement with RJO, Nikruto says, "R.J. O'Brien has been in operation for more than 100 years. That is a century of supporting customers. You have to be doing something right for folks who use futures to choose to do business with you for that long."