Explore Special Offers & White Papers from ADMIS

Sugar Market Report for 13 March

Good morning,

The market made a good recovery on Friday after dropping to its lowest level in 5 sessions only to bounce back to unchanged by the close. The market had opened 11 points lower before continuing to head south as the weakness of the macro from the previous session started to impact on sugar. Prices continued to fall for the rest of the morning losing another 18 points by mid-day. As US traders got to their desks a wave of fund selling appeared taking prices quickly down another 20 points to the lows of the day. However, no sooner than the lows had been reached than a dramatic turnaround was seen with prices gaining 50 points over the next 90 minutes. The market continued to improve further, eventually pushing into the plus column before, finally, settling just above unchanged. The KN dropped 1 point to +56 while the NV was 2 points weaker at +23. In London the market ended in the negative column failing to keep up with NY on the speculative rally. The KQ dropped to +12.30 while the QV was unchanged at +13.90. The KK WP slipped to 123.40 while the VV WP ended unchanged. The market appeared to be at the mercy of the macro having, initially, fallen only to rally as the macro made a dramatic turnaround. The underlying strength of the market from a fundamental perspective also supported the market.

The CFTC is slowly releasing the delayed COT reports. On Friday the report for the 21st February was released. It showed the funds/specs had cut their net long position by 4,314 to 197,825 during a period when the market remained in a relatively narrow range ending slightly lower than the start. The non-commercials cut their net longs by 7,606 to 153,276 while the commercials saw a huge cut on both sides only to end up 153 to 387,810 as the option expiry and imminent H-23 expiry had positions being closed on both sides. The Index funds increased their net longs by 4,468 to 189,985. The next COT, which should be released later this week, which will be up to the 28th February will be more interesting as the market increased 54 points during the period and traders will be looking to see whether the funds increased their net long position significantly.

This morning the market opened 7 points higher before improving another 4 points on the back of an improving macro picture. However, this early buying soon dried up with prices quickly dropping back to unchanged. Currently, the market is 6 points weaker. The KN is 3 points firmer at +59 while the NV is 5 better at +28. In early London trading the KQ is unchanged at +12.30 while the QV is weaker at +13.20. The macro is very strong this morning with all commodities higher while the US Index has taken another tumble. It is now just under 1.5% weaker than a week ago. The BRL ended weaker on Friday at 5.22. The market current strength was reiterated on Friday when prices recovered from a near 50 point drop. The recovery in the macro is helping but the main driver remains the bullish fundamental sentiment with production from India, Thailand and China continuing to spook traders. The Brazilian CS harvest will get underway before long and with ethanol parity over 3 cents below current levels millers will be keen to make as much sugar as possible. The next up-side target is last week’s contract high at 21.33 while a drop through 20.60 may trigger further speculative long liquidation.

Please note both NY and London markets will close at 17:00 GMT (1 hour earlier) for the next fortnight due to day light saving starting in US.

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.

 © 2023 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