The market rocketed higher again yesterday on fund buying into limited selling to hit its highest level since late February with the spot month reaching just shy of 18 cents. The market had opened a couple of points firmer but soon improved another 15 points to break above the previous day’s high. The market then quietened into a relatively narrow 20 point range dipping back to unchanged in front of the Unica report. However, the release of the Unica data appeared to trigger a wave of fund buying with prices swiftly gaining 50 points over the next hour. The market then paused on some light day-trader liquidation before improving into settlement to close just 4 points off the day’s highs. The soon to expire K-21 gained more with the KN improving 11 points to end at +19 its strongest since late March. The OI dropped to 40,062 lots with just over 24k lots traded yesterday. The NV also improved 6 points to end at +12. In London it was rather quieter with the QV ending unchanged at +5.00 while the VZ was nearly $1 firmer at +1.40. This meant the NQ WP improved marginally to 84.10 while the VV WP also improved to 85.30. Prices made most of the gains after the Unica data release. The data was fairly neutral and it is too early in the season to make any firm predictions but it did seem to trigger a bout of aggressive fund buying. They have increased their net long position considerably over the past couple of weeks and are likely to be currently over 220k net long. The macro was, again, overall positive which also added to the bullish sentiment.
Unica released their 1st half April harvest data yesterday which showed a total 15.63 million tonnes of cane was crushed which produced 624k tonnes of sugar. The spilt was a healthy 38.55/61.45. Unica also reported that as of the 15th April 147 mills were crushing. This is compared to 180 mills operating this time last year. It is expected another 60 mills will start crushing during the second half of the year. The crush and sugar production was probably in line with predictions with many expecting a slow start to the season.
Brazilian analyst Canaplan reported that they expect total sugar production to be down at between 33.10 and 33.80 million tonnes due to the dry weather with total crush at between 540 and 553 million tonnes. This estimate is another lower estimate and it certainly looks as if other analysts will start to lower estimates from the earlier consensus of around 35 million tonnes.
Australian sugar production is expected to marginally increase next season to 4.4 million tonnes from 4.33 million tonnes this season. This will be due to higher cane yields in Northern Queensland. Exports are forecast in increase by 200k tonnes to 3.4 million tonnes. White sugar exports are expected to remain unchanged at 135k tonnes.
This morning the market opened 16 points lower before a couple of early sell stops took prices down another 17 points. Prices have now stabilised at around 32 points lower. The KN is 1 point weaker at +18 while the NV is unchanged at +12. In early London trading the QV is slightly weaker at around +4.50 while the VZ is valued around unchanged at +1.40. The macro is overall negative this morning with crude barely changed but grains/soya and metal lower while the USD index is firmer as the markets correct after the latest run up in prices with many getting technically over-bought. The jump in sugar yesterday looks to have been a little overdone with the market having gained over 300 points since the beginning of the month. While there has been growing concerns over the Brazilian CS crop and parts of the EU beet crop this is against a back-ground of concerns over consumption. India is on its way to producing possibly 6 million tonnes more than internal consumption and are looking set to produce over 30 million tonnes next season. However, with so much uncertainty around the market looks unlikely to fall too much but a correction looks likely. The funds have bought good volume over the past few weeks and may also take a breather although they still have the ability to buy more.
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.
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.
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.
Sugar Market Report for 28 April
The market rocketed higher again yesterday on fund buying into limited selling to hit its highest level since late February with the spot month reaching just shy of 18 cents. The market had opened a couple of points firmer but soon improved another 15 points to break above the previous day’s high. The market then quietened into a relatively narrow 20 point range dipping back to unchanged in front of the Unica report. However, the release of the Unica data appeared to trigger a wave of fund buying with prices swiftly gaining 50 points over the next hour. The market then paused on some light day-trader liquidation before improving into settlement to close just 4 points off the day’s highs. The soon to expire K-21 gained more with the KN improving 11 points to end at +19 its strongest since late March. The OI dropped to 40,062 lots with just over 24k lots traded yesterday. The NV also improved 6 points to end at +12. In London it was rather quieter with the QV ending unchanged at +5.00 while the VZ was nearly $1 firmer at +1.40. This meant the NQ WP improved marginally to 84.10 while the VV WP also improved to 85.30. Prices made most of the gains after the Unica data release. The data was fairly neutral and it is too early in the season to make any firm predictions but it did seem to trigger a bout of aggressive fund buying. They have increased their net long position considerably over the past couple of weeks and are likely to be currently over 220k net long. The macro was, again, overall positive which also added to the bullish sentiment.
Unica released their 1st half April harvest data yesterday which showed a total 15.63 million tonnes of cane was crushed which produced 624k tonnes of sugar. The spilt was a healthy 38.55/61.45. Unica also reported that as of the 15th April 147 mills were crushing. This is compared to 180 mills operating this time last year. It is expected another 60 mills will start crushing during the second half of the year. The crush and sugar production was probably in line with predictions with many expecting a slow start to the season.
Brazilian analyst Canaplan reported that they expect total sugar production to be down at between 33.10 and 33.80 million tonnes due to the dry weather with total crush at between 540 and 553 million tonnes. This estimate is another lower estimate and it certainly looks as if other analysts will start to lower estimates from the earlier consensus of around 35 million tonnes.
Australian sugar production is expected to marginally increase next season to 4.4 million tonnes from 4.33 million tonnes this season. This will be due to higher cane yields in Northern Queensland. Exports are forecast in increase by 200k tonnes to 3.4 million tonnes. White sugar exports are expected to remain unchanged at 135k tonnes.
This morning the market opened 16 points lower before a couple of early sell stops took prices down another 17 points. Prices have now stabilised at around 32 points lower. The KN is 1 point weaker at +18 while the NV is unchanged at +12. In early London trading the QV is slightly weaker at around +4.50 while the VZ is valued around unchanged at +1.40. The macro is overall negative this morning with crude barely changed but grains/soya and metal lower while the USD index is firmer as the markets correct after the latest run up in prices with many getting technically over-bought. The jump in sugar yesterday looks to have been a little overdone with the market having gained over 300 points since the beginning of the month. While there has been growing concerns over the Brazilian CS crop and parts of the EU beet crop this is against a back-ground of concerns over consumption. India is on its way to producing possibly 6 million tonnes more than internal consumption and are looking set to produce over 30 million tonnes next season. However, with so much uncertainty around the market looks unlikely to fall too much but a correction looks likely. The funds have bought good volume over the past few weeks and may also take a breather although they still have the ability to buy more.
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.
Latest News & Market Commentary
ADM & Industry News
Ag Market View for July 26.24
Commodities Overview July 2024 Edition
Indices Futures Higher