Sugar Market Report
The market remained firm on Friday but the trading volume was very thin with the strengthening of the front spread and the Z-20 expiry in London they only major points of note. The market opened 6 points weaker before quickly dropping another 7 points hitting the day’s lows in early trading. The market remained within a narrow trading range throughout the morning but started to improve around mid-day as light speculative buying met with very limited resistance until prices climbed above 15.00 cents where more selling was found. The market then remained caught between buying below 14.90 and selling above 15.10 but interest was very limited. Prices dipped below 15 cents just before the close settling slightly firmer. However, it was only the front month that managed any gains with the HK gaining another 9 points to settle at +89. The KN improved 2 points to finish at +68. In London the Z-20 expired at 412.80 and at a $6 premium to H21. The HK was also firmer nearly $4 to settle at +11.20. The KQ finished at +10.20. This put the HH WP slightly weaker at 77.00 while the KK WP was also weaker at 85.40. Despite the lack of volume the market remained positive with concerns over the lack of Indian export policy keeping everyone nervous which allows the buyers to dictate proceedings with trade reluctant to be involved with things still very uncertain.
The Z-20 expired on Friday with the second largest delivery ever at 618,300 tonnes (12,366 lots). Early indications are that ED&F Man and Wilmer are the two receivers. Sucden, Tereos and, possibly, Skor, the deliverers of Brazilian, Guatemalan, Mexican and Algerian. The official information will be released by the ICE exchange later today. The market had been expecting some Indian sugars and certainly did not anticipate Algerian. The normal discussion will now ensure as to whether this very large delivery is bullish or bearish. Too much sugar or good demand? Time will tell but Algerian in the tape might suggest limited demand certainly within the region.
The COT is delayed due to Federal holiday. The latest report will be released tonight.
This morning the market opened unchanged but soon jumped higher on some good market speculative buying in front month flat price and HK. Prices quickly improved another 20 points where prices currently remain. The HK has jumped again currently trading up 6 at +95. The KN is unchanged at +68. In London it is a quiet start with the HK slightly firmer at +11.50 while the KQ is unchanged at +10.20. The macro is positive this morning with a sea of green mainly on a the back of a weaker USD. The BRL ended last week virtually unchanged at 5.47. The market is looking firm and further gains look to be on the cards with a test of the recent multi-month highs (15.23) likely to be tested especially if the front spread continues to improve. Whether the gains justified remains to be seen but with everyone awaiting news from India the selling is likely to remain limited.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Charles Branch, Kevin Watkins, Steven Trigg
Phone: +44(0) 207 716 8598
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