Sugar Market Report for 23 March

Good morning,

Yesterday saw another quiet day in sugar. Bizarrely the entire range of the day was recorded in the first three minutes of trading as the opening print turned out to be the high of the day thereby putting in a double top at 19.34/33. The market had opened 5 points firmer but immediately dropped just over 20 points to fall to the lows of the day and confirming an inside day. In thin volume prices gradually improved momentarily getting back into the plus column mid-afternoon but soon fell away again to close in the lower end of the narrow 21 point range. The KN dropped back losing 7 points to end at +5 while the NV finished 5 points weaker at -7. In London prices held better although the front two spreads weakened with KQ down $2 at +15.80 and the QV at +11.70. However, the WP remained firm with the KK WP a tad firmer at 124.60 and the VV WP at 96.70. It was a rather non-descript session with the market seemingly unsure on direction so deemed to follow crude which remained in the negative column for the day.

Little fresh fundamental news around yesterday. The Indian harvest continues with a total production at 34 million tonnes expected if not a tad more. Indian mills will be looking to sell more sugar for export but whether there is demand remains to be seen as the Brazilian harvest gears up to start in April. Most expect a slow start to the crush as mills try to give the cane as much time to recover from the months of drought especially as more rain is forecast for the region over the next ten days.

This morning the market opened unchanged before slipping slightly lower. Currently, prices are trading 4 points lower. The KN is 1 point weaker at +6 while the NV is unchanged at -7. In early London trading the KQ is  firmer at +16.80 while the QV is unchanged at +11.70. This morning the macro is slightly positive with crude up a little with most other agri Commodities. The USD Index is also a tad firmer while the BRL remains firm ending at 4.91 last night. As mentioned above the market remains uncertain of direction. The huge Indian production is bearish but the massive uncertainty over the Russian/Ukraine situation means crude could rocket higher again with all the concerns over Brazilian sugar production that would trigger. So for the time being the market appear likely to remain rangebound between 18.50 and 19.50 in quiet trading