INSIDEADVANTAGE

WHAT’S ON THE
HORIZON FOR
2010?
A Special Report from
INSIDEADVANTAGE WINTER 2009

David Hightower

CLIENT SERVICE: THE MIKE O’HARA WAY p.3 ECONOMIC OUTLOOK p.4
 WINTER 2009

CONTENTS
3 Client Service: The Mike O’Hara Way
Mike O’Hara shares his vision for client service excellence at Advantage Futures

4 What’s on the Horizon for 2010?

Special Report from David Hightower, Principal, Hartfield Trading Partners

9 CME Interest Rates

Capitalize on Intercommodity Treasury and Swap Spreads

10 Advantage Futures Seminar Series

CME Group Metals, Fall 2009 Energy Overview, Gain an Advantage in FX Trading,
Weathering the Grains Market

11 Upcoming Events
Advantage Futures Seminar Series Calendar and Client Events

ABOUT ADVANTAGE FUTURES

Advantage Futures ranks as one of
the highest volume clearing firms in
the industry, exceeding 1.5 billion
contracts processed during the past
six years. With an emphasis on
superior technology, responsive risk
management, customizable back office
operations and highly personalized
client services, Advantage Futures
is the consummate clearing firm
for institutions, hedge funds, CTAs,
proprietary trading groups and
professional traders. Skilled,
dedicated personnel provide the most
comprehensive, technology-driven
clearing and execution services to
enable successful and efficient trading.
Advantage Futures is a full clearing
member of the CME Group (including
CME, CBOT, NYMEX and COMEX),
LIFFE, ICE Clear U.S., ICE Europe, The
Clearing Corp., Options Clearing Corp.
and CFE as well as a foreign approved
participant of the Montreal Exchange.
In addition, Advantage Securities is a
member of the CBOE.
When you open an account with
Advantage Futures, you not only trade,
you Trade Up – to quicker connections,
superior service and competitive pricing.
At Advantage, you focus on trading
while we manage every other detail to
your complete satisfaction.
Advantage Futures continues to
demonstrate record growth with more
than $374 million in client funds
on deposit as of August 2009. Our
dedication to client service has lead to
this success, and we are confident this
ethic will continue to fuel our growth.
To learn more about Advantage Futures,
please visit our Web site at www.
advantagefutures.com or contact one of
our client representatives at
312.756.6460.
 CLIENT SERVICE:
THE MIKE O’HARA WAY
Mike O’Hara, Senior Vice President at
Advantage Futures, is serious about client
service. While technology, operations,
and risk management attract clients
to Advantage, Mike is confident that
superior client service keeps them here.
Client Service at Advantage is designed
to improve every facet of the client’s
experience. From account onboarding to
technology optimization, the Advantage
service philosophy encourages proactive
involvement in helping clients achieve
their goals. These objectives may include
analyzing exchange membership options to
getting started in automated, high frequency
trading. Whatever the endeavor, Advantage
service representatives will aid in the task.
Mike O’Hara is a strong believer in the
lessons taught in The Nordstrom Way –
his doctrine for service excellence. This
book illustrates the concepts utilized by
Nordstrom’s department store to earn its
reputation for outstanding client service.
With Mike’s urging, The Nordstrom Way
has become required reading for all sales
personnel at Advantage. Mike spends
much of his time mentoring his team and
other employees on the importance of client
service. He teaches three simple principles:
1) Follow the Golden Rule: Whenever
possible, put yourself in your client’s
position and understand how you would
want to be treated. This simple concept
is too often overlooked in client service.
Clients always appreciate a sincere effort to
understand their situation and like to know
that everything possible is being done to
meet their needs.
2) Every client is different: Many situations
require tailor-made service and Advantage
client representatives structure their
services to accomplish just that. Others in
the industry may rely on rigid bureaucracies
to simplify client service at the expense of
providing adequate responsiveness to client
needs. In contrast, service at Advantage is
prompt and personalized. We understand
that every client is unique and customize
our practices to suit each individual
account.
3) Take a long-term approach: What a client
says about you is more important than the
business he does with you. All too often
in financial services, sales managers are
focused only on getting a client in the door.
While the initial sale is key, it is equally
important to maintain a client’s positive
perception of the company. Everyone with
whom you conduct business should have
a favorable impression of Advantage; they
are more likely to recommend our company
if their experience with us is a positive one.
So where does Mike see Advantage in five
years? “Nordstrom. Disney.
Four Seasons. These are all great
companies driven by client service
excellence. I want traders to feel the same
way about Advantage Futures.” With
such an emphasis on client service, it’s
no coincidence that client referrals are
the greatest driver of new business at
Advantage.
Feel free to contact Mike at
mohara@advantagefutures.com or at
312.347.4932 with any questions or needs
you might have. He’s ready to exceed your
expectations.
INSIDEADVANTAGE WINTER 2009 3
 WHAT’S ON THE
HORIZON FOR
2010?
A Special Report from
David Hightower

4 INSIDEADVANTAGE WINTER 2009

Commodity Outlook for 2010
Presented for Advantage Futures by David Hightower
In retrospect, 2009 was a very impressive year for the
commodity markets. For most of 2009 commodities were seen
as “the” place to be, with many analysts touting them as a new
and potentially sustainable investment class. Indeed, certain
commodities forged very impressive rallies in the face of highly
uncertain economic conditions, with the Continuous Commodity
Index forging a gain of more than 30% from the end of 2008 to
the October 2009 highs. If one also takes into consideration the
low to high rally in crude oil prices of 74% and the 94% run up in
sugar prices, it would seem like certain commodities are well on
their way to pricing in a recovery.
With the sharp, surprising run-up in equity prices of 67% off
of the March 2009 low, there are a number of analysts who view
the equity markets as pricing in positive growth for 2010. While
the outlook for the economy remains very suspect as of this writ-
ing and many might consider the commodity markets as over-
stating the recovery potential, it is possible that a bit of historical
perspective will lead one to the conclusion that many commodity
prices still have significant upward price potential ahead.
In our opinion, a large portion of the commodity price gains
forged in 2009 were simply a rejection of severely deflated pric-
ing. In some cases markets fell to (and even below) the cost of
production and did so off of sentiment that suggested demand
was going to fall to depression type levels and not recover for
years.
But as the situation was so extreme (interest rates approach-
ing zero, widely accepted expectations for a continuous deflation-
ary spiral and, for a while, little or no hope of an end to the crisis)
the conditions that had sent prices to extreme lows in 2008 and
early 2009 may not be repeated very soon. It could be very dif-
ficult for markets like natural gas, crude oil, sugar, cotton orange
juice, copper, coffee and corn to return to the lows they have
forged over the last 18 months. And while markets like cocoa,
soybeans, soybean oil, cotton and wheat may seem to lack the
fundamentals that would allow for a strong upside extension,
against a backdrop of a falling Dollar, fairly consistent global de-
mand growth and ongoing investment flows toward commodities,
even those “weak horses” can catch some spillover support.
One could say that 2009 was a year to “close your eyes and
buy everything physical.” In contrast, 2010 looks like a year to be
more selective. To be sure the direction of most commodity prices
will still be largely a function of the direction of the economy, but
while we have to assume that the US will slowly claw its way out
of the sub-prime disaster, we have to be aware that there will
likely be periodic setbacks.
However, never in history has the US Federal Reserve been
so forced into a position of erring to the side of inflation. Adding
into the equation what appears to be a long-term devaluation of
the dollar and unprecedented quantitative easing by the most of
the world’s central banks, one is presented with a spectacular,
classic inflationary setup for commodities.
While the commodity appreciation potential is being rec-
ognized by the “funds” that have poured in copious amounts of
money to commodities, there could be some form of showdown in
2010 between commodity speculators and the regulators. How-
ever, in the wake of the move toward proposed position limits in
certain commodities, it would appear that inflows to commodities
INSIDEADVANTAGE WINTER 2009 5
 from the funds have actually accelerated. In 2009 moves to restrict have tight fundamental setups and be prepared to get long or add to
index trader activity in some markets forced them to rebalance their their long positions in the wake of any compacted washout brought
positions, which meant that while they may have liquidated positions about by regulatory changes. Telling the world they can’t own com-
in some markets they turned around and bought into some other modities probably increases the interest in them two-fold!
markets. For example, they may have been forced to liquidate some
longs in Chicago wheat, but they simply replaced those with longs in Interest Rates
Kansas City wheat.
While interest rates showed a general decline into the end of
In the event that regulators make a move to lower position limits 2009, the long-term outlook is for higher rates. However, one might
in 2010 there could be a temporary, aggressive liquidation in some characterize the near term outlook as completely devoid of a trend.
markets. In most cases one might expect those commodity markets In almost any other junction in history Treasury yields would have
with massive long spec positions to see a concentrated liquidation already begun to factor in some form of economic recovery by now.
event in the face of a change in spec position limits. (See the table And in almost any other junction in history the Treasury market
below for markets with an unusually large spec positioning as a would also have begun to factor in the explosion of U.S. debt, but so
percentage of open interest.) far the threat from the Federal Reserve to hold interest rates down
until recovery is assured has prevented the market from anticipating
Average Weekly Percentage of Open Interest an upward push in interest rates.
Held by Non-Commercial and Nonreportable Traders in 2009
As of December 1, 2009 the markets were still fretting over re-
FEEDER CATTLE 73.5% MINNEAPOLIS WHEAT 48.6%
sidual financial concerns and the fear of a jobless recovery was still
LUMBER 67.8% COPPER 48.5% dominating the marketplace. However, with a lengthening string of
LEAN HOGS 63.3% SOYBEAN MEAL 47.9% declines in U.S. Ongoing Claims figures and a drop in Initial Claims
NATURAL GAS 62.8% COFFEE 47.2% to the vicinity of the potentially critical 425,000 growth/nor growth
level, it would seem like the U.S. economy is gradually moving
WHEAT 57.5% RICE 46.4% toward a sustained recovery. Therefore, our outlook for interest rates
SILVER 57.3% PLATINUM 45.7% closely resembles the outlook for a dam that is riddled with leaks.
CORN 57.1% MILK 45.3% In other words, we see interest rates holding at relatively low levels
until a definitive crack quickly translates into a bursting of the Fed’s
LIVE CATTLE 56.8% CRUDE OIL 44.7%
interest rate dam. Given that Treasury prices recently were sitting 12
SOYBEANS 56.7% COTTON 43.3% full points above the June 2009 lows and that the US government
KANSAS CITY WHEAT 54.6% SUGAR 42.5% continues to see its deficit explode, we think that traders have to ap-
PALLADIUM 52.5% COCOA 41.5% proach the short side of the debt markets. In our opinion, the biggest
difficulty of maintaining a short position in any debt market might
GOLD 52.4% HEATING OIL 38.5%
be the lack of change in conditions directly ahead and not neces-
ORANGE JUICE 48.9% RBOB GAS 35.7% sarily from the amount of price adversity that will be encountered.
SOYBEAN OIL 48.7% OATS 33.3% As in currency intervention efforts, the U.S. Fed probably realizes
that once their support is challenged and they are unable to prop up
Still the Greatest Bull Market… prices there could be a very pronounced, across the board decline
in debt markets.
When presenting a commodity outlook in the late 1980’s, I
was openly laughed at by the some of the most respected livestock Energies
analysts of the time when I suggested that the price of cattle was
influenced that day by the sharp decline in the Dow Jones Industrial The oil market has become one of the major focal points of the
Average! Well in advance of the historic 2004 to 2008 explosion in anti-commodity investment movement; with the initial complaints
copper prices, I sent a roar of laughter through the main ballroom of arising from the fact that crude oil prices were able to rise in the face
the Mirage Hotel in Las Vegas when I told a crowd of international of high supply and fears of slack recession demand. However, the
scrap copper producers that prices were destined to double or even International Energy Agency has suggested that the financial crisis
triple. At a National Grain Trades Council meeting in Cabo San caused a setback of $90 billion in energy investment and that the
Lucas, Mexico in February 2006, I wasn’t even in the room when world will need $10.5 trillion in added investment through 2030 just
I received a public lashing from a fellow presenter who apparently to begin a shift away from fossil fuel sources. Some analysts (that
thought my prediction of crude oil prices rising above $80 a bar- are in part supported by oil consumer watchdog groups) have con-
rel was preposterous. While it may sound like I am tooting my own ceded that it might take $80 crude oil prices just to attract enough
horn with these stories, the point is that a number of well-informed, investment to meet world demand in the coming 5 years.
experienced and well-intentioned players have failed to grasp the
enormity of the situation facing the commodity markets. Another problem that might be missed by those that blame
soaring energy prices on excess speculation is the inefficiency of
The sub-prime disaster may have temporarily derailed the the US refinery industry. In addition to being an oligopoly of sorts,
stellar growth in developed countries, but the rapid acceleration in the industry is well into a major divestiture of refining assets by the
standards of living in the rest of the world will not be denied. And large oil conglomerates. A lack of competition basically put a large
while the recent price gains have come a long way towards repair- measure of energy price control in the hands of US refiners. Since
ing the lack of investment in mining, exploration and production from the refiners have no civic duty to keep product supplies ample, leav-
the late 1970’s to the late 1990’s, the global commodity demand will ing product supplies tight actually helps them expand and protect
continue to climb with the biggest explosion of capitalism in the his- their profits. In other words, we have a situation where those in
tory of mankind. charge of manufacturing oil into products have a profit incentive that
can be expanded by fostering shortages.
In 2010 traders should be aware of which commodity markets

6 INSIDEADVANTAGE WINTER 2009

 such as silver, palladium, crude oil and even agricultural markets.
US EIA Refinery Operating Rate It should be noted that world demand for silver has exceeded
2009 vs 2008 vs 5 Year Average the supply (mine production plus scrap) for most of the past two
96
decades, as jewelry and industrial demand for silver has remained
93 strong. Furthermore, as the world emerges from the recession, we
90
would expect the silver market to show an even larger production
deficit, as mining is expensive and soaring prices thus far have not
Percent of Operational Capacity

87 resulted in a commensurate rise in output.

84

81

78

75

72

69

66
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2008 2009 17 Yr Avg

As of the middle of November, the US refinery operating rate

had slipped to a level where roughly 20% of capacity was idled. In
the past this type of idling has only been seen in the face of severe
weather damage to refineries or from depressionary expectations.
While crude oil prices might appear to be expensive at $80 per
barrel, the prospect of a product-led rally, a Dollar-led rally or a rally
off any global setback in production is plausible in 2010. While US
gasoline stocks currently stand at 210 million barrels, if they fall
With silver prices seriously lagging behind the record run in
below the 200 million barrel level prior to mid April 2010, it could
gold prices and spec long positioning in silver nowhere near record
signal a return to crude oil prices above the $100 per barrel level by
levels, we think that silver will be a better long-side performer in
summer 2010.
2010 than gold, potentially capable of trading to $22 to $26 an
ounce.

Metals
With the US Federal Reserve backed into a corner by a
mountain of toxic assets and soaring US deficit spending, the easy
way out is to invite, foster and perhaps even beg for inflation. With
the world currency markets and even US politicians seemingly
willing to invite, foster and perhaps even beg for a significantly lower
US Dollar, there would seem to be yet another historical inflationary
building block in place.
While gold has been the popular choice of investors as a hedge
against inflation and against holding the US dollar or other paper
currencies, its record high price may cause a shift to other assets
Soft Commodities
The sugar market appears poised to begin another leg higher,
as a further tightening of world supply going into the first half of 2010
is expected. The potential for a surge in buying from fund traders
due to inflationary economic environment also adds to the bullish
setup. Furthermore, traders believe that India is close to increasing
the amount of white sugar it will allow to be imported duty-free by
another 1 million tonnes, and there has also been talk that they are
booking another 2-3 million tonnes of raw sugar imports for March
delivery.
(Continued on p.11)

INSIDEADVANTAGE WINTER 2009 7

 INTEREST RATES COMMODITIES \ EQUITIES \ FX \ ENERGY \ METALS \ WEATHER

IMPLIED TREASURY AND SWAP SPREADS

Treasury and swap spread

trading with no leg risk

NOW INCLUDING NEW “ULTRA” T-BOND FUTURES

Beginning January 11, 2010

Trade Implied Treasury and Swap Spreads: Implied Treasury and Swap spreads on CME Globex
offer traders an efficient way to take a position on
› Gi\$[\Ôe\[#`dgc`\[`ek\iZfddf[`kpjgi\X[j changes in the yield curve, or to isolate and trade swap
between U.S. Treasury futures, and between spread exposure. They offer easier and more efficient
Treasury and Interest Rate Swap futures execution of the most commonly traded spread strat-
egies, and eliminate the risk involved with executing
› 8ccfnjgi\X[jkfY\\o\Zlk\[XjXj`e^c\ each leg individually. And with CME Group’s new Inter-
trade, eliminating “slippage” and leg risk commodity Spread Curve Tracker (ICS Curve Tracker),
monitoring the levels of your Treasury and Swap
› I\[lZ\kiX[`e^Èef`j\É[li`e^mfcXk`c\dXib\kj
spreads is easier than ever, allowing you to track your
spreads over time, and giving you a clearer picture of
› @eZi\Xj\dXkZ_`e^fggfikle`k`\jk_ifl^_
profits and losses. Learn more at cmegroup.com/ics.
automated arbitrage between outright
and spread order books

› E\n@ek\iZfddf[`kpJgi\X[:lim\
Tracker makes it simpler and easier
to track levels of each spread

CME Group is a trademark of CME Group Inc. The Globe logo, CME, Chicago Mercantile Exchange and Globex are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of
k_\9fXi[f]KiX[\f]k_\:`kpf]:_`ZX^f%EPD<O#E\nPfibD\iZXek`c\<oZ_Xe^\Xe[:c\XiGfikXi\kiX[\dXibjf]E\nPfibD\iZXek`c\<oZ_Xe^\@eZ%:FD<O`jXkiX[\dXibf]:fddf[`kp<oZ_Xe^\@eZ%I\]\i\eZ\jkf
:D<>iflggif[lZkj`eZcl[\i\]\i\eZ\jkf\oZ_Xe^\$kiX[\[gif[lZkjfefe\f]`kji\^lcXk\[\oZ_Xe^\j:D<#:9FK#EPD<O#:FD<O %Gif[lZkjc`jk\[fek_\j\\oZ_Xe^\jXi\jlYa\Zkkfk_\ilc\jXe[i\^lcXk`fejf]k_\
particular exchange and the applicable rulebook should be consulted. Copyright © 2009 CME Group. All rights reserved.
Capitalize on Intercommodity Treasury and Swap Spreads
Q&A with Peter Barker, Director, Interest Rate Products, CME Group
What are Intercommodity Treasury and Swap spreads?
Intercommodity Treasury and Swap spreads (ICS) are implied,
predefined spreads which facilitate the execution of Treasury curve
and Treasury/Swap spread strategies. Traded on the CME Globex
electronic platform, ICS allow you to trade these spreads as one
strategy, without slippage or execution risk. The spread ratios are
pre-defined, and they are expected to remain unchanged absent
substantial changes in the marketplace. Changes to the ratios
typically occur prior to the listing of spreads for deferred expiration
months, and they are usually due to changes in the cheapest-to-
deliver securities into Treasury futures.
Trading in Intercommodity Treasury and Swap spreads is strong
and growing. From the time the implied spreads were listed on
CME Globex on December 15, 2008 through mid-December 2009,
more than 830,000 spreads have traded, representing nearly five
million legs.
What are the advantages?
Removing the need to leg into the spreads means that you can
execute them quickly and efficiently, which mitigates the risk of
not executing the spread at your desired price. Those who may be
trading these spreads in the cash market will also find that implied
Intercommodity spreads offer a more cost-effective way to execute
them. In addition, this avoids the challenges faced by traders
using auto-spreaders, who may miss getting a leg filled in volatile
markets. In general, implied functionality enhances liquidity and
creates efficient markets.
Who trades these kinds of spreads?
Among others, Treasury and Swap spreads are traded by hedge
funds, asset managers, proprietary traders, and active individual
traders. Any market participant looking to manage duration and
credit risk exposure, take advantage of arbitrage opportunities, or
capitalize on anticipated changes in the yield curve, will find that
Intercommodity spreads are a fast and efficient way to implement
these strategies.
What kinds of Treasury and Swap spreads are listed?
CME Group offers futures on 2-, 3-, 5- and 10-Year T-Notes,
30-Year T-Bonds, and on 5-, 7-, 10-, and 30-Year Interest Rate
Swaps. This broad product suite allows us to offer a wide variety
of spread possibilities. There are currently 14 different implied
Intercommodity Treasury and Swap spread combinations listed,
which provides opportunities to execute yield curve and credit
spreads, whether your outlook is short-term or long-term. The ratio
and contract month of the spread is embedded in the spread name,
for example, “NOB 05-03 H0” indicates that the 10-year T-Note vs.
30-Year T-Bond spread (NOB) for March 2010 (H0) is listed at a
ratio of five 10-Year T-notes vs. three 30-Year T-Bonds (05-03).
How are the spreads quoted?
The minimum spread tick is equal to the minimum tick of the front
leg of the spread. For example, the minimum tick for a “FYT”
spread (5-Year T-Note vs. 10-Year T-note) would be one-quarter
of one thirty-second ($7.8125), corresponding to the minimum tick
size of the 5-Year T-Note. The spread quotes are based on (net
change of front leg) - [(net change of second leg) / price ratio].
How can I track Intercommodity spread positions?
CME Group has created an Intercommodity Spread Curve Tracker
(ICS Curve Tracker) which helps you track the levels of each
spread. The ICS Curve Tracker displays the difference in the
weighted prices of the two legs of the spread, rather than the net
change. This provides a continuous time series, allowing you to
track Treasury and Swap spreads over time, make decisions about
when to put trades on and take them off, and have a better idea of
the profit and loss status of your positions. You can get access to
the ICS Curve tracker at www.cmegroup.com/ics.
There is a new Long-Term “Ultra” Treasury Bond futures
contract launching on January 11, 2010—where do Ultra
T-bond futures fit in with the current array of Intercommodity
spreads?
Ultra T-Bond futures, which are designed to allow you to manage
long-dated Treasury yield exposure, will add to the Intercommodity
spread opportunities. ICS will be offered for Ultra T-Bond futures
against the other Treasury futures and the 30-year Interest Rate
Swap futures contract. The Ultra T-Bond futures ICS generating
a great deal of interest are the 30-Year T-Bond vs. Ultra T-Bond,
the “BOB” spread, and the Ultra T-Bond vs. 30-Year Interest Rate
Swap futures, the “UOS” spread. The UOS allows you to create
synthetic market exposure to the 30-year swap spread, while the
BOB allows you to capitalize on shifts in the long end of the yield
curve, for risk management and potentially enhanced returns.
How can I learn more about Intercommodity Treasury and
Swap Spread trading and Ultra T-Bond futures?
In addition to the ICS Curve Tracker, you can visit www.cmegroup.
com/ics to get the current Intercommodity spread ratios, live quotes
on all of the spreads, and access a webinar archive that explains
Implied Price Functionality. There is a variety of information on the
new Ultra T-Bond futures available at www.cmegroup.com/ultra.
The CME Group Interest Rate Resource Center also provides
access to our latest tools, research, strategy papers, reference
materials, and archives of all of our webinars. For example, in the
New Opportunities in Treasury and Swap Spreads webinar (July
15, 2009), two veteran traders discuss the yield curve and how
they incorporate Intercommodity spread functionality on CME
Globex into their trading strategies.
For additional questions, contact a member of the CME Group
Interest Rate Products and Services Team:
- Pete Barker, Director, 312.930.8554,
peter.barker@cmegroup.com
- Jeff Kilinski, Director, 312.648.3817,
jeff.kilinski@cmegroup.com
- Jonathan Kronstein, Associate Director, 312.930.3472,
jonathan.kronstein@cmegroup.com
- Suzanne Spain, Associate Director, 312.338.2651,
suzanne.spain@cmegroup.com
INSIDEADVANTAGE WINTER 2009 9
 Advantage Futures Seminar Series 2009

Trading Metals Don’t miss our upcoming

October 7, 2009 2010 seminars with topics
including:
David Hightower, Principal, Hartfield
Trading Partners and Bruce Gilbert,
Director of Metals Products, CME Group,
joined Advantage Futures on October 7 ➤ Economic Outlook 2010
to share their knowledge and insight on
trading strategies for CME Group Metals
➤ Tax Strategies & Legal
contracts, and news and updates from CME Structure
Group. ➤ Euribor with Liffe
Fall 2009 Energy
Overview Our seminars can be
October 13, 2009 viewed at the Seminar
Advantage Futures, Fundamental Analytics
Center on the Advantage
and CME Group hosted an interactive panel Futures website at
on October 13, to discuss factors facing
the energy markets in the fourth quarter of
www.advantagefutures.com
2009 and beyond. The panelists include Dr.
Joel Fingerman of Fundamental Analytics,
Dave Wear of Integrys Group, Brian
Marozas of Integrys Group, and Dr. Vincent
Kwasniewski of Illinois River Energy.

Gain an Advantage in
FX Trading
November 10, 2009
Cornelius Luca, President and Author,
LUCA Global Research and David Schulz,
Director FX Products, CME Group, joined
Advantage Futures and CME Group on
November 10 to explain the role of foreign
currency among the classic asset classes,
financial markets at the end of 2009, and
trading FX futures versus OTC FX.

Weathering the Grain

Market
December 8, 2009
Joe D’Aleo of Weather Services
International, Dan Basse of AgResource
Company, and Gail Martell of Martell Crop
Projections joined Advantage Futures
and Weather Services International on
December 8 to discuss forecasting of
weather and grains markets.

10 INSIDEADVANTAGE WINTER 2009

(Continued from p.7 - “What’s on
the Horizon for 2010?”)

Indian officials have pegged production for the 2009-10 season
at just 16 million tonnes compared with consumption near 22.5-23.0
million. Back in May traders were not expecting world supplies to be
very tight, due to expectations for a production surge in Brazil and
a strong recovery in India as well. But the monsoon rains in India
did not materialize in a timely manner, and production collapsed in
some key areas.
Brazil producers are expected to continue to shift to more sugar
and less ethanol production this year, as sugar prices are high and
ethanol exports are expected to fall to 3 billion liters from 4.5 billion
last year.
After two successive years of disappointing production out of
India and tightening world supplies, the world ending stocks/usage
ratio for 2009/10 is now forecast at just 15.8%, the lowest in at least
40 years. In short, the data suggests that we are approaching one
of the tightest supply periods for sugar on record. We look for 28.00-
36.00 cents as a possible upside target for sugar in 2010.

To learn more about David Hightower and to subscribe to The

Hightower Report, please visit www.futures-research.com.

***This report includes information from sources believed to

be reliable and accurate as of the date of this publication, but no
independent verification has been made and we do not guarantee
its accuracy or completeness. Opinions expressed are subject
to change without notice. This report should not be construed as
a request to engage in any transaction involving the purchase or
sale of a futures contract and/or commodity options and/or options
on futures thereon. The risk of loss in trading futures contracts
or commodity options can be substantial, and investors should
carefully consider the inherent risks of such an investment in light of
their financial condition. Any reproduction or retransmission of this
report without the express written consent of The Hightower Report
is strictly prohibited.

UPCOMING EVENTS
where should you be?
ADVANTAGE FUTURES SEMINAR SERIES
Economic Outlook 2010
Randall Kroszner, University of Chicago
January 26, 2010
CME Auditorium, 30 S. Wacker Drive
Chicago, IL
Tax Strategies & Legal Structure
Lance A. Zinman, Partner, Katten Muchin Roseman
Phil Ryan, CPA, Partner, Ryan & Juraska
February 18, 2010
CBOT Visitor Center Theatre, 141 W. Jackson Blvd., 5th Floor
Chicago, IL

Trading the European Yield Curves

Cosponsored by NYSE Liffe
March 24, 2010
CBOT Visitor Center Theatre, 141 W. Jackson Blvd., 5th Floor
Chicago, IL

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This information is not to be
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commodities herein named. The
factual information of this report has
been obtained from sources believed
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ily all inclusive and is not guaranteed
as to the accuracy and is not to be con-
strued as representation by
Advantage. The risk of trading
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substantial. Each investor must
consider whether this is a suitable
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indicative of future results.

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THIS ISSUE:
ECONOMIC OUTLOOK
2010

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