Written Commentary
Good morning,
The market remained range-bound on Friday although did see a marginal improvement but the trading volumes remain limited. The market had opened 4 points firmer and continued to improve throughout the morning culminating in hitting the highs in the early afternoon before sliding back to settle in the lower half of the day’s range. The NV ended unchanged at +29 while the VH was 2 points firmer at +43. In London early strength in the structure slowly subsided with the QV ending marginally higher at +12.10 and the VZ also firmer at +11.50. The WP held steady with the VV WP finishing at 135.00 and the VZ at 124.90. The market remains nervous and beholden to the macro while there is little fresh fundamental news. However, the resilience of the market remain good as prices recovered from the drops of the previous three sessions.
The COT as of the 16th May showed the funds/specs cut their net long position by 2,586 to 215,702 which was not too much of a surprise with the market improving 55 points only to fall 67 points during the reporting period. The non-commercial were quiet with a small drop of just 520 to 164,115 as they continue to hold their longs but show little inclination to add at current levels. The commercials increased their net shorts by 3,045 to 360,039 as some light producer selling was noted but very limited interest from end-users. The Index funds cut their net longs by 2,318 to 144,336.
The German national statistics office reported on Friday that German farmers have expanded their sugar beet plantings for 2023 to around 398,200 hectares which is a 0.5% increase compared with 2022. This is seen as a consequence of the higher sugar prices across the EU. This increase is in contrast to France where farmers have cut their planted area by 5.3% to 380,000 hectares.
This morning the market opened 3 points weaker. Currently, the market remains 4 points weaker. The NV is 1 point firmer at +29 while the VH is unchanged at +43. The macro is mixed this morning with crude lower while grains are higher apart from wheat. The USD index is around unchanged and the BRL ended at 5.00 on Friday. The market looks set to remain within the range of the last couple of day and the trading volume likely to remain limited as the market works over old ground and traders remain nervous and unsure of upcoming issues such as the start of the Indian monsoon and how the Brazilian CS harvest continues going forward.
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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