Man of the Futures Leo Melamed

 Man of the Futures Leo Melamed 

This is a great book that I believe everyone should read. 

It’s not only a book about the futures industry; it’s a an immigrant story, it’s a story about Chicago, a story about the American Dream and it’s also a success story about a visionary who transforms an industry and builds it to adapt to the future, which is something we all can learn from regardless of your industry. 

For those of us who have been in the futures industry it’s impossible to not have been influenced by Leo. 

In this time that we living in, it’s hard to not think/hope that there are 100s of other Leo’s out there making the dangerous journey to America that who will also enrich our nation. 

Man of the Futures Leo Melamed it’s well written and an easy read. I highly recommend it to everyone

#leomelamed #cme #cmegroup #futures #futurestrading #commodities #cbot #chicago #melamed #ceres #davidnealis 

Shanghai Futures Exchange’s Copper Opens to International Participation

 The much anticipated inclusion of international participation in the Contract is planned to be launch on Nov. 19, 2020.

The enthusiasm for the highly liquid contract inclusion doesn’t come as a surprise as global capital markets traders seek alpha.

China is the world’s top consumer of metals and accounts for over 50% of the world's demand for copper.

The contract size is 5 metric tons, the price is quoted in Chinese Yuan, and the trading hours are 9:00 a.m. to 11:30 a.m. and 1:30 p.m. to 3:00 p.m.

Often considered a low risk commodity by traders because of its versatile applications and sometimes used as collateral in China’s shadow banking industry copper demand in China remains steady. #china #futurestrading #futures #SHFE #shanghai #copper #LME #cmegroup Ceres Ltd #alpha

Ceres Ltd brings Huishang Futures to meet FCMs in Chicago

Two years ago Ceres Ltd signed a contract to aid Huishang Futures in their efforts to internationalize. Apart of that process was to educate them on the differences between the Chinese financial system and the American financial system in addition to classroom education we also brought them to Chicago to learn directly from some of the amazing firms in the futures industry as well as to find potential business partners.

David Nealis brings Huishang Futures to meet Tim Foley at Advantage Futures

At the heart of the futures industry are the FCMs, to over simplify it they are the clearing firms of futures trades, but they often do much more than this. At the bottom of this page we have put a definition of a FCM. It was important to bring Huishang Futures to meet and learn from USA FCMS, not only because it’s Huishang’s goal to become a US FCM and they should fully understand how different the Chinese and USA systems are.

One of the many examples is a US FCM is a private firm which in addition to many services also clears the trades but in China this is a centralized government owned clearing firm and also all of the relevant brokerage firms are owned  by the Chinese government in one form or another.

Ceres Ltd brings Huishang Futures to meet Wedbush in Chicago

Another very important difference is in the USA the FCMs are responsible for risk management, but in China there are additional layers between the brokerage firm and the exchanges for example there is centralized government owned clearing organization as well as a national Chinese risk organization. The US firms do not have this additional safety net so rigorous risk and compliance are vital to its operations.

David Nealis brings Huishang Futures to Dorman Trading

Ceres ltd brings Huishang Futures to meet ED&F Man in Chicago

David Nealis brings Huishang Futures to meet Phillip Capital in Chicago

An FCM is a Futures Commission Merchant. An FCM is an individual or organization that solicits and/or accepts orders to buy or sell futures contracts, options on futures contracts, retail foreign exchange contracts or swaps and accepts money or other assets from customers to support such orders.

Mr Dorman did an amazing job of explaining the US futures industry and its history to Huishang Futures.

* we introduced Huishang to several other FCMs that aren't pictured.

For more information about David Nealis and Ceres Ltd please visit our website: https://ceres888.com/Home.html

Ceres Ltd brings Huishang Futures to the trading floor in Chicago.

David Nealis brings Joyce Jiang of Huishang Futures to the trading floor in Chicago

Two and a half years ago Ceres Ltd started to cooperate with Huishang Futures, as part of our consulting with them we brought them to Chicago the heart of the world’s futures trading and we took them onto the trading floor in Chicago to get a sense of history for futures trading.  The Chinese exchanges are purely electronic so we felt this would be an important experience for them.

Though today most of the trading at the CME is done electronically it’s still a great experience to visit the trading floor.

Jane Yang of Ceres Ltd on the trading floor in Chicago

For more information about David Nealis and Ceres Ltd please visit our website: https://ceres888.com/Home.html

Zheshang Securities and Ceres Ltd

Zheshang Securities visits Ceres Ltd in Chicago

Ceres Ltd and Zheshang Securities have had a long working relationship.

David Nealis President of Ceres Ltd first met with Zhenshang at the Ceres office in Chicago Illinois.

After an in-depth meeting with representatives of Zhenshang’s divisions of equities, futures, asset management and physical commodities the firms agreed to further work together.

David Nealis answering questions on FoF at Zheshang Securities

Jane Yang of Ceres Ltd giving FoF seminar to Zhenshang Securities

Ceres Ltd provided education to include but not limited to Fund of Funds (FoF), a comparison study of China’s and USA’s financial systems, and trading global capital markets.

Mr Chen President of Zheshang Futures with David Nealis

Jane Yang, David Nealis and Mr Chen in Shanghai

Mr Chen and David Nealis at Shanghai Futures Exchange

Zheshang Futures and Ceres Ltd also developed a Fund of Funds Fund together along with an additional 3^rd party.

Chairman of Zhenshang Securities with David Nealis in Chicago

David Allen of Ceres Ltd giving a Fund of Fund seminar to Zhenshang 

Ceres Ltd giving a FoF course to Zheshang in Shanghai.

to learn more about David Nealis and Ceres Ltd please visit our website: https://ceres888.com/News___Events.php

The African Swine Virus Rages Across China

                        The African Swine Virus Rages Across China

David Nealis on the farm in Erdos, China.

As we enter the 2019 Lunar New Year of the Pig, the African Swine Virus is raging across China and now spreading to other parts of Asia and Europe.

This incurable disease that typically takes years to eradicate has reached at least 24 Chinese provinces and regions since the first reported outbreak in August of 2018. It’s a common thought that the African Swine Virus was introduced to China from Russia. The US –China Trade War has China scrambling to find alternative sources of commodities to prove to the US that they do not need them to help feed their 1.3 billion population, this has some conspiracy theorist imaginations going wild.

On our yeoman farm in the Inner Mongolia City of Erdos, we feared the rapid spread of the African Swine Virus, as many of the large and small producers in the region started to contract the virus so we decided to send our hogs to market earlier than normal to avoid the chance of losing all of our stock to the virus. All that we kept were a few mature females that we use for breeding and so far they have been spared from contracting the virus.

Jane Yang on the farm in Erdos , Inner Mongolia China

What is the African Swine Virus?

The African swine fever virus (ASFV) is the causative agent of African swine fever (ASF). The virus causes a haemorrhagic fever with high mortality rates in pigs, but persistently infects its natural hosts, warthogs, bushpigs, and soft ticks of the genus Ornithodoros, with no disease signs.

In attempts to reduce the spread of the virus the Chinese Central Government has banned feeding kitchen/restaurant waste to pigs which is a very popular practice in China, and restricted transportation of live pigs and products from infected areas. 

Hogs on the way to market in China.

So far the virus hasn’t mutated to be able to affect humans but it has affected the lives of many humans. Tens of thousands of Chinese farmers are expected to abandon pig farming as weak demand and higher regulation costs cut deep into their profits. It is estimated that will reduce production in China by 20 per cent this year. The weak demand for pork is also affecting global commodity producers with downward pressure on soybeans.This might not be considered a negative affect by the Chinese Central Government which has been pushing for larger factory farms were there can be more control.

David Nealis President of Ceres Ltd

China’s pork industry is US$1 trillion market, not only is China the world’s largest producer of pork and also a net importer of pork. In 2017 it is estimated that China slaughtered 700 million pigs. Yeoman farms producing fewer than 500 pigs for slaughter each year are estimated to account for about 40 per cent of China’s output annually.

During the Year of the Pig let’s hope that the Chinese and other affected regions of the world get the African Swine Virus under control and while they are at it let’s find an intelligent and fair solution to the US - China Trade War as well.

11 herbs and spices with a side of Om - KFC opens its first outlet in Tibet

11 herbs and spices with a side of Om

KFC opens its first outlet in Tibet

KFC became the first major Western fast food chain to open an outlet in Tibet. The restaurant is located in the Shenli Shidai shopping center in the Tibetan capital of Lhasa.

According to Xinhua News Locals formed long queues in the restaurant on its first day and local children posed for photos in front of the store.

"Other fast food brands operating in Tibet over the past few years have showed people here have a big appetite for fried chicken and hamburgers," said Chen Biao, a manager of the Shenli Shidai shopping center.

 KFC first attempted to enter the Tibetan market in 2004, but decided to delay entry into the market believing that it didn’t make economic sense at the time and The Dalai Lama, Tibet's spiritual leader in exile, who is an advocate of vegetarianism condemned KFC’s plan at the time.

I am assuming that the KFC Tibet outlet will be very popular with Chinese and foreign tourists alike if it is anything like the other KFC outlets across China in touristy areas.

According to Xinhua news agency, KFC is planning to build a frozen storage area in the suburbs of Lhasa to aid in the growth of its business in the Himalayan region. KFC entered the Chinese market in 1987 and now has more than 5000 oulets in over 1,100 cities across China.

With infrastructure improving in Tibet and with Chinese government encouragement to develop the region, I aspect that we will be seeing more brands entering the market place on top of the world.

And how else would one end a story about KFC in Tibet than with a quote from the sage Carl Spackler ( Bill Murray) :

 “Carl Spackler: So I jump ship in Hong Kong and I make my way over to Tibet, and I get on as a looper at a course over in the Himalayas.

Angie D'Annunzio: A looper?

Carl Spackler: A looper, you know, a caddy, a looper, a jock. So, I tell them I'm a pro jock, and who do you think they give me? The Dalai Lama, himself. Twelfth son of the Lama. The flowing robes, the grace, bald... striking. So, I'm on the first tee with him. I give him the driver. He hauls off and whacks one - big hitter, the Lama - long, into a ten-thousand foot crevasse, right at the base of this glacier. Do you know what the Lama says? Gunga galunga... gunga, gunga-lagunga. So we finish the eighteenth and he's gonna stiff me. And I say, "Hey, Lama, hey, how about a little something, you know, for the effort, you know." And he says, "Oh, uh, there won't be any money, but when you die, on your deathbed, you will receive total consciousness." So I got that goin' for me, which is nice.” – Caddyshack

Have a Great Weekend

David Nealis

President of Ceres Ltd. 

A Chinese Sugar Option...........Maybe.

A Chinese Sugar Option – the Zhengzhou Commodity Exchange hopes to launch a Sugar Options Contract in 2016.

by Jane Yang, Bob Meara and David Nealis of Ceres Ltd

Over the last 12 months we have seen some major changes in the Chinese capital markets industry including a recent surge in Futures prices in China.

For those of us involved in the Chinese capital markets industry all too often we have heard about potential products being launched and with patience we are still waiting for some of them like the Crude oil contract to be traded in the Shanghai FTZ that potentially would include non-Chinese traders which would be ground breaking in China.

 And we have experienced products and policies being taken away over the last 12 months.

Jane Yang and David Nealis of Ceres Ltd on the CME trading floor

 

In the midst of this comes the hope of a Sugar Options contract launched by the Zhengzhou Commodity Exchange (ZCE).  Currently there is only one options contract traded in China (the World’s 2^nd largest economy), which is the SSE50 ETF option.  

Zhengzhou Commodity Exchange (ZCE) has claimed that they are fully prepared to launch it anytime once they get final permission from CSRC (Chinese Security Regulation Commission.

ZCE is one of the four futures exchanges in China. The products traded in the exchange are mostly agriculture products; wheat, rice, cotton and sugar contracts among others are traded there.
 
For those who don’t trade sugar here is a quick macro picture of sugar around the world:

·         The world top 5 sugar producing countries are Brazil 38.7MT (Metric Ton), India 26 MT, China 11.4 MT, Thailand 10.6 MT and US 7.2 MT.

·         The top 5 importing countries are Philippines, Nigeria, EU, Iran and Iraq.

·         The total annual Sugar production worldwide is 172.5 MT. 

·          Total annual sugar consumption worldwide is 171MT and the total sugar stock worldwide is 42.2 MT. (Year 2015)

ICE No.11 Sugar contract VS ZCE Sugar futures contract

Product	Symbol	Contract Size	Quote	Tick Size	Contract Months	Trading Hours London time	Minimum Trading Margin
ICE Sugar #11	SB	12,000 pounds (5442kgs)	Cents/pound	0.01cent/lb	3,5,7,10	8:30am-6:00pm (London time)
ZEC White Sugar	SR	10 Tons (10,000kgs)	CNY/Ton	1 CNY/Ton	1,3,5,7,9,11	Beijing Time UTC+8 9:00-11:30 a.m. 1:30-3:00 p.m.	6% of contract value

 

 

ICE No.11 Sugar option contract VS ZCE Sugar futures options contract

Product	Symbol	Contract size	Quote	Tick Size	Contract Months	Strike Price intervals	Last trading day	Trading hours
ICE No.11 sugar options	SO	One futures contract	Cents	1/100 of a cent per pound	Regular Options: 1, 3, 5,7,10. Serial Options: 2, 4, 6,8,9,11,12, For the January regular option, the March contract is the underlying future. For serial options, the underlying future is the next Regular futures contract month.	Strike Price Increment will be $.25 cents at all price levels	15th calendar day of the month that precedes the options trading month, or the first business day after the 15th should this day be a weekend or an Exchange holiday.	8:30am-6:00pm (London time)

 

Product	Symbol	Contract Size	Quote	Tick Size	Contract Months
ZCE White Sugar options	SR +C/P + Strick price	1hand of sugar futures contract	CNY/Ton	0.5CNY/Ton	1,3,5,7,9,11
	Expiration Months	Amount of Stick Prices	Strike Price Intervals	Last Trading Day	Trading Hours  UTC+8
	Two months before futures contracts’ delivery months	5 out-of-money, 1 at-the-money and 5 in-the-money according to the price range of exercise price	futures price < 3000RMB,  Strike Price intervals is 50RMB/Ton; 3000RMB7000RMB,  Strike Price intervals is 100RMB; futures price>7000RMB, Strike Price intervals is 200RMB.	Last trading day of the options Expiration Months	9:00-11:30 a.m. 1:30-3:00 p.m.

 

 

 

 

 

Data from ZCE showed in 2015, that the sugar trading volume almost doubled and more than 30% of the trades were physical hedging. According to the their survey,  90% of the big saw sugar producers, 80% of big sugar trading companies, 60% of the large manufacture participated in sugar futures trading hedge their risk.

Most of China’s domestic sugar production is grown in the south of the country, mainly in Guangxi province which produces roughly 70% of China’s domestic sugar production and Yunnan province produces more than 15%.

Hua Tai Chang Cheng Futures forecasts a 22% from 2015 to 2016 total sugar consumption in China. The sugar consumption per Chinese is only 1/3 of the world’s average level, as the Chinese economy continues to grow and the tastes change in China we see a huge potential increase in Chinese domestic demand.  

David Nealis and Bob Meara of Ceres Ltd at the Shanghai Futures Exchange

We are hopeful that is if the contract launches, it will be an active contract.  

We look forward to trading the sugar options contract at China’s Zhengzhou Commodities Exchange.

If you are interested in participating in Chinese financial markets, please contact: info@ceres888.com