Sugar Market Report for 22 November

Good morning,

Friday saw the market drop back after hitting their highest level since end of August as the macro turned negative which prompted a bout of profit taking. However, a large jump in prices post settlement saw prices back to virtual unchanged in the last minute of trading which may have been a buy stop into very thin volume. The market had opened unchanged before improving 10 points. However, with crude lower prices soon started to sag with the market losing over 35 points over the next three hours. Prices did recover much of the loses getting back to unchanged by the time US traders got to their desks. However, during the rest of the session prices dropped back to make new lows for the day shortly before settlement but as mentioned a very late bout of buying saw prices back to unchanged. The HK slipped 3 points to end at +26 while the KN was 6 points weaker at +35. In London it was a very quiet session with the HK ending at +0.40 while the KQ finished at +3.40. This meant the HH WP was valued at 72.00 while the KK WP ended at 77.20. The macro continues to impact on the market while there is limited fresh fundamental news although the trend is firmer with the continuing succession of higher lows.

The COT as of the 16th November showed that the funds/specs had increased their net long position by 15,760 to 189,594. This was during a period that prices improved nearly 30 points before dropping back for a net improvement of just 9 points on the week. The non-commercials increased their net long position by 15,444 to 139,095 and with further improvement in prices recently it is likely they have increased their net longs by another 15k lots. The commercials increased their net short position by 16,577 to 381,366 as producer selling and trade long liquidation was noted. The Index funds were again quiet increasing their net long position by 818 to 191,771.

According to Virit Viseshsinth, deputy secretary-general of Thailand’s Office of Cane and Sugar Board, Thailand will crush 85.7 million tonnes of cane this season. This prediction is lower than the Thai Sugar Millers Corporation expectations of 90 million tonnes. Total sugar production is expected to increased around 2 million tonnes compared with last season to 9.5 million tonnes. Looking further forward Virit sees cane production improving back to ‘normal levels’ of around 100 million tonnes in 2022/23.

This morning the market opened unchanged against the settlement price before improving another 8 points before falling back slightly. The market is currently 5 points firmer. The HK and KN are both 1 point firmer at +27 and +36 respectively. In early London trading the HK is valued at +0.50 and the KQ unchanged at +3.70. This morning the macro is a positive picture with crude and agricultural commodities trending higher. However, the USD Index remains firm having hit its highest level since the middle of July 2020 on Friday. The market remains firm with good support building below the market. It would seem likely to market will try to push back to the high of last week although selling is seen above 20.75.

 

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.

 © 2021 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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