Written Commentary
Good morning,
The market made new highs for the recent move but ended lower on the day after crude also turned lower. The market had opened 6 points weaker but immediately improved another 17 points in the first 30 minutes of the session. The market then slowly dipped back to opening levels by mid-morning before improving this time pushing through the previous highs only to find more extensive resistance at just below 19.30. This triggered some day-trader liquidation which coincided with crude prices slipping lower so the liquidation became more intense with stops hit as prices broke through the previous sessions high at 19.15. Prices continued to fall to hit the lows of the day during the settlement period. The HK ended 3 points weaker at +26 as did the KN which finished at +24. London was rather subdued after the structure and WP weakened the previous session. The HK and KQ ended slightly lower at +6.80 and +6.50 respectively. The WP ended barely changed with HH WP at 90.00 and the KK WP at 88.90 but there was limited interest with no block trades. The recent rally off the 5 month lows appeared to fizzle out yesterday as resistance was found at the highs seen just before Christmas.
Associated British Foods announced yesterday that their revenue was 12% ahead of last year helped by stronger European sugar prices and higher domestic sales in the UK. The increase in bioethanol also added to the positive performance. They also said they see UK sugar production for the current season up over 13% on previous season at 1.04 million tonnes compared with 900k tonnes last season. The increase was due to higher yields which more than off-set the reduced growing area.
This morning the market gapped lower and 12 points lower mainly on the back of a negative macro picture. Prices soon fell further and are, currently, 15-16 lower.
The HK is unchanged at +26 while the KN is 1 point weaker at +23. In early London the HK is unchanged at +6.80 while the KQ is a tad firmer at +6.90. As mentioned above the macro is negative this morning with most commodities lower as crude falls over 2%. The USD Index is virtually unchanged. With little fresh fundamental news around the market seems tied to the macro at the moment so it is not too surprising prices have fallen in early trading. The chart gap formed this morning (18.87 – 18.82) needs to be filled otherwise the technical picture could look poor by the close with chart gap below the market (18.37 – 18.45) the next downside target.
Contact the ADMISI Sugar Desk team:
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
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Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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