Sugar Market Report for 7 July

The market saw an inside day yesterday as the market try to consolidate after the volatility of the past two weeks. The market had opened 3 points lower before falling slightly lower. The market remained volatile in thin trading before falling further. Prices did improve during the early afternoon to hit the day’s highs before falling away again late in the session. The market eventually settled near the lows of the day but still well within the range of the previous day. The trading volume dropped considerably with just under 93k lots traded. The VH was unchanged at -5 while the HK lost 10 points to finish at +129. In London, the soon to expire spot month remained firm with the QV jumping nearly $4 to finish at +10.20. The VZ was also slightly firmer at +6.70. The Q-23 OI dropped to 15,610 lots with another 5,523 lots traded yesterday continuing to suggest a small delivery. It would seem the market is pausing for a breather with traders unsure of the market’s next move. However, with the Brazilian CS harvest progressing well and the Indian monsoon behaving as expected there is not too much for the bulls to get excited about at the moment.

This morning the market gapped lower opening 10 points lower. However, the gap was soon filled with prices currently around 3 points lower. The VH is 1 point weaker at -6 while the HK is 1 point firmer at +130. In early London trading the QV is $1.90 firmer at +12.10 while the VZ is also slightly firmer at +7.40. The macro is mixed this morning with crude higher while grains/soya lower. The USD Index is a tad weaker while the BRL ended slightly weaker at 4.91 yesterday. The market quietened considerably yesterday and it may well be the case today that the market remains quiet. Further consolidation looks likely with a downside bias.