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Sugar Market Report for 13 October

Good morning,

The market made a new high for the recent move but ran into some producer selling as prices approached 19 cents which triggered some long liquidation aided by a negative macro picture. The market had opened unchanged but soon started to rise gaining another 20 points to hit its highest level since 20th July. However, more selling was noted at prices pushed above 18.90 which saw some light profit taking which took prices back to their opening levels. Prices did then recover slightly before crude started to weaken which triggered some more aggressive selling which quickly took prices down to the lows of the day. Light day-trader short covering buoyed prices on the close but they still end in negative territory. The HK also saw some profit taking which saw it dip 5 points to end at +88 while the KN was also down 5 points at +51. London also saw some long liquidation in both flat prices and spreads. The ZH slipped slightly to +45.40 while the HK was also a tad weaker at +10.40. The WP was also weaker with the ZH WP ending at 142.80 and the HH WP at 97.40. The appearance of some light producer selling and limited fund activity was enough to trigger some profit taking after prices rallied over 150 points since the beginning of the month. Again the macro played a big part as coffee tumbled nearly 4% and cocoa also saw some profit taking.

The 10 day Brazilian weather forecast for Brazil’s CS see more rain for the weekend but not as heavy as seen recently and will, perhaps, not hamper field operations as much as during the second half of September. It does also look likely to become dry by the middle of next week. In India heavy rain across several of the major sugar cane states has meant the harvest start might be delayed by up to two weeks. India has received 88% more rainfall than normal so far in October. While the Government has not published their export plans for the current 2022/23 season it is thought some mills have contracted to sell up to 1 million tonnes mainly for November and December shipment. The delay to the harvest may impact on their ability to ship on time. It also means they will miss an opportunity to sell in front of the start of the Thai harvest which is likely to see up to 2 million tonnes more produced than last season.

This morning the market opened 1 point firmer before slipping slightly. Currently, the market is 5 points lower. The HK is 1 point weaker at +87 while the KN is unchanged at +51. In early London trading the ZH is a tad firmer at +46.20 while the HK is virtually unchanged at +10.20. This morning the macro is mixed with crude slightly higher, grains/soya a little weaker while the USD Index is a tad firmer. The BRL ended weaker at 5.30. The weather concerns in Brazil and India should keep the market firm in the short term while the macro will continue to influence intra day movement. Of course, the rain will be seen as beneficial in the long term especially in Brazil.

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.

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