Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
Good morning,
The markets took a breather yesterday as prices dipped from the fresh 7 ½ month highs hit the previous session. The trading volume also dipped back to the rather uninspiring levels of last week. The market had opened a couple of points lower before swiftly improving as an early push above the previous day’s high was attempted. This quickly failed with prices soon dropping back into the negative column from which it never recovered. Prices continued to slip lower through the morning but interest was limited. Eventually some support was found below 14.60 which saw prices bounce a little but it was pretty half-hearted effort with prices slumping to the lows of the day on the close as light speculative long liquidation was seen. The HK also dropped back losing 6 points on the day to settle at +65 while the KN also ended 6 points weaker at +51. In London the ZH slipped back to a slight discount at -0.30 while the HK ended unchanged at +5.40. This meant the WP also weakened with the ZH WP ending $2 lower at 76.30 and the HH WP also weaker at 75.60. Yesterday’s stalling of the recent rally will have surprised few traders. It was more the case that the fund buying dried up than any significant trade selling appearing. The funds could currently be around 220k lots net long which, as mentioned before, is probably close to their limit given the OI although the total has now improved above 1 million lots for the first time in several months.
The latest sugar tender from Pakistan attracted just one offer according the European traders. Al Khaleej sugar is believed to have submitted an offer of $505 per tonne C&F for the total 50k tonnes of white sugar. Arrival of sugar has to be by 25th November.
The market continues to awaits announcement from Indian government regarding export policy. Chatter is there might be a Cabinet meeting today when some news might emerge…or not. Some have calculated that if the government was to give the same incentive as last season then current NY prices would mean India could sell with a margin. If no help then prices would have to improve, at least, 200 points. Therefore, the market remains on tenterhooks until some pronouncement is made.
This morning the market opened 1 point lower before dropping another 4 points where prices, currently, remain. The HK is a couple of points weaker at +63 while the KN is unchanged at +51. Early trading in London sees the ZH around unchanged at -0.30 while the HK is a tad weaker at +4.90. The market is likely to remain quiet and nervous as traders await news from India. Whether any information is forthcoming today or not until the beginning of next month remains to be seen. It would seem logical for the government to continue with the policy/incentives/subsidies of last season. Despite the pandemic the government is likely to continue to support the sugar industry. Macro is mixed this morning although most agri-commodities are higher while the USD is weaker. Traders will be mindful that a sharp correction could be seen on the back of any Indian chatter especially with the funds heavily long.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Charles Branch, Kevin Watkins, Steven Trigg
Phone: +44(0) 207 716 8598
Email: admisi.sugar@admisi.com
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