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800-683-8000(March 30, 2000) SUGAR: It's time to look at a market that may be showing sign's of a bottom. The price of world sugar stands at one of the lowest price levels over the last 10 years. Option volatility is very low which means you can buy good quality options at attractive prices. How much lower can the market go? According to Moore's Research, sugar has regularly suffered weakness in early to mid-April. The price slide has not always been large, but it has been consistent. So, if the pattern continues, I believe pullbacks should be viewed as buying opportunities. Estimates out of center/south Brazil is showing production is down to 11-12 million tonnes from 16.8 million last year which was at the result of the 1999 drought. A 4 to 6 million tonnes reduction in one the largest producers of sugar could help out the world supply and demand situation.
RECOMMENDATION--Buy October sugar calls.
Richard Padron
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