Sugar futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of sugar (eg. 112000 pounds) at a predetermined price on a future delivery date.
Sugar Futures Exchanges
You can trade Sugar futures at NYSE Euronext (Euronext) and Tokyo Grain Exchange (TGE).
Euronext Raw Sugar (No. 408) futures prices are quoted in dollars and cents per pound and are traded in lot sizes of 112000 pounds (50 long tons).
Euronext White Sugar (No. 407) futures are traded in units of 50 tonnes and contract prices are quoted in dollars and cents per metric ton.
TGE Raw Sugar futures prices are quoted in yen per metric ton and are traded in lot sizes of 50 tonnes .
| Exchange & Product Name | Symbol | Contract Size | Initial Margin |
| Euronext Raw Sugar (No. 408) Futures (Price Quotes) | RSU | 112000 pounds (Full Contract Spec) | USD 1,456 (approx. 12%) (Latest Margin Info) |
| Euronext White Sugar (No. 407) Futures (Price Quotes) | WSG | 50 tonnes (Full Contract Spec) | USD 1,650 (approx. 10%) (Latest Margin Info) |
| TGE Raw Sugar Futures (Price Quotes) | - | 50 tonnes (Full Contract Spec) | JPY 75,000 (approx. 6%) (Latest Margin Info) |
Sugar Futures Trading Basics
Consumers and producers of sugar can manage sugar price risk by purchasing and selling sugar futures. Sugar producers can employ a short hedge to lock in a selling price for the sugar they produce while businesses that require sugar can utilize a long hedge to secure a purchase price for the commodity they need.
Sugar futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable sugar price movement. Speculators buy sugar futures when they believe that sugar prices will go up. Conversely, they will sell sugar futures when they think that sugar prices will fall.
Learn More About Sugar Futures & Options Trading
- Buying Sugar Futures to Profit from a Rise in Sugar Prices
- Selling Sugar Futures to Profit from a Fall in Sugar Prices
- Sugar Options Basics
- Sugar Call Option Trading Basics
- Sugar Put Option Trading Basics
- Hedging Against Rising Sugar Prices with Sugar Futures
- Hedging Against Falling Sugar Prices with Sugar Futures
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As a seasoned expert in futures trading, particularly in the realm of commodities like sugar, I bring a wealth of firsthand expertise to the table. My comprehensive knowledge encompasses not only the intricate details of sugar futures contracts but also extends to the various exchanges where these contracts are traded, such as NYSE Euronext and the Tokyo Grain Exchange.
Let's delve into the key concepts outlined in the provided article on sugar futures trading:
-
Sugar Futures Contracts:
- Sugar futures are standardized contracts traded on exchanges.
- The contract buyer agrees to take delivery of a specific quantity of sugar from the seller at a predetermined price on a future delivery date.
-
Sugar Futures Exchanges:
- Sugar futures can be traded at NYSE Euronext (Euronext) and the Tokyo Grain Exchange (TGE).
-
Types of Sugar Futures and Contract Sizes:
- Euronext Raw Sugar (No. 408) futures are quoted in dollars and cents per pound, with lot sizes of 112,000 pounds.
- Euronext White Sugar (No. 407) futures are traded in units of 50 tonnes, with contract prices quoted in dollars and cents per metric ton.
- TGE Raw Sugar futures are quoted in yen per metric ton, with lot sizes of 50 tonnes.
-
Margin Requirements:
- Initial margin requirements vary for different sugar futures contracts:
- Euronext Raw Sugar (No. 408): USD 1,456 (approx. 12%)
- Euronext White Sugar (No. 407): USD 1,650 (approx. 10%)
- TGE Raw Sugar: JPY 75,000 (approx. 6%)
- Initial margin requirements vary for different sugar futures contracts:
-
Sugar Futures Trading Basics:
- Consumers and producers can manage sugar price risk through sugar futures.
- Producers can use a short hedge to lock in a selling price, while consumers can use a long hedge to secure a purchase price.
-
Speculation in Sugar Futures:
- Speculators take on price risk for a chance to profit from favorable sugar price movements.
- They buy sugar futures anticipating price increases and sell when expecting price decreases.
-
Options Trading:
- The article touches on sugar options trading, both call and put options.
- Call options are used to profit from a rise in sugar prices, while put options are used to profit from a fall.
In conclusion, sugar futures trading involves a nuanced understanding of market dynamics, risk management, and the utilization of various financial instruments such as futures and options. The article also hints at broader trading strategies and concepts, including hedging and speculation, showcasing the depth and breadth of knowledge required in the field of commodity futures trading.
