Explore Special Offers & White Papers from ADMIS

Sugar Market Report for 10 October

Good morning,

Friday saw the market rally to its highest level since the 21st July as surging oil prices and wet weather across Brazil’s CS concerned traders that total sugar production maybe hit. The market had opened 15 points weaker but immediately started to improve and was back to unchanged by mid-morning. Prices continued to improve as US traders got to their desks. A short sharp drop back in prices was noted early afternoon but prices soon recovered to continue to push higher with the highs of the day reached on the close. The HK ended unchanged at +88 while the KN improved another 9 points to end at +53. In London, it was a more quiet affair with both ZH and HK ending slightly lower on the day at +43.40 and +11.40 respectively. This meant the WP slipped with the ZH WP ending at 141.00 and the HH WP at 97.60. Having hit a two-week low last Monday the market rallied 126 points during the remainder of the week aided by higher crude prices after OPEC announced a cut in production. The gathering of the good and great in London for the Sugar Dinner at the Guildhall may also have fuelled the rally. There was very limited scale-up selling in the market as Indian sellers remained side-lined as they wait for the Government’s export policy for the new season.


The COT as of the 4th October showed that the funds/specs had cut their net short position by 10,551 to 10,412 during the reporting period that the market ended 40 points higher. The non-commercials cut their net short position by just 2,001 to 26,523 as the funds continued to be largely absent for the market. The commercials increased their net short position by 1,966 to 170,669 but both gross shorts and longs cut positions reflecting the narrow price range. The Index funds cut their net shorts by 8,583 to 181,082.


The Indian Government has yet to make any official export policy details for the just-started 2022/23 season. With total production expected to be around the same as last season or a touch more (36-37 million tonnes) they will need to export. It is expected a total of 7-10 million tonnes of exports will be allowed with the first tranche announced sometime this week. The next Thai cane crop is expected to be bigger at around 105-110 million tonnes vs 93 million tonnes last season. Brazil’s total sugar production for the current season is expected to be a tad higher than last season’s 32 million tonnes. However, next season cane could reach 600 million tonnes and see total production above 35 million tonnes.


This morning the market opened unchanged before weakening slightly. Currently, prices are 3 points weaker. The HK is 2 points better at +90 while the KN is also 2 points better at +55. In early London trading the ZH is firmer at +44.10 while the HK is unchanged at +11.40. The macro is a mixed picture this morning with crude slightly lower after the gains of last week while grains are higher. The USD Index is virtually unchanged while the BRL ended weaker on Friday at 5.205. The rain continues across Brazil’s CS which is, undoubtedly, hampering harvest operations. There appears to be some drier weather later this week before more rain over the weekend before it looks set to dry up later next week. In the short term, the market will continue to respond to the macro and the Brazilian weather as traders await an announcement from the Indian Government about exports which is widely expected so should have limited impact on prices. However, it would seem unlikely prices will collapse from current levels with the structure remaining firm in both NY and London although the macro will continue to dictate short-term direction.

Contact the ADMISI Sugar Desk team:

Phone: +44(0) 20 7716 8598

Email: admisi.sugar@admisi.com

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.

 © 2022 ADM Investor Services International Limited.

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.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

Latest News & Market Commentary

Explore Special Offers & White Papers from ADMIS

Get Started