Sugar Market Report

Good morning,

Sadly the stand out feature of yesterday was the trading volume that ended at a miserly 56,291 lots. The market also ended slightly lower although it was an inside-day. The market had opened 1-2 points firmer before improving further but selling at 14.50 soon saw prices slowly dropping lower over the next couple of hours to hit the day’s low but the volume was negligible. Prices then remained within a 9 point range until mid-afternoon when prices improved to hit the highs of the day in line with a positive macro. However, the attempt to push incisively through 14.50 soon ran out of steam and values quickly slumped back into the negative column settling 6-7 points down on the day. The HK finished 1 point better at +60 while the KN ended 2 points weaker at +40. In London it was equally quiet with both HK and KQ settling a tad higher at +4.50 and +5.80 respectively. This meant the HH WP and KK WP were virtually unchanged at 79.50 and 88.20 respectively. Frankly, it was a day to forget with prices remaining within the range seen over the past week.

The French farm Ministry reported yesterday that they had, again, cut their beet crop estimate to 26.3 million tonnes due to poor weather during the growing season and disease caused by the banning of neonicotinoid pesticides. This is a reduction from their last month’s estimate of 27.2 million tonnes. The new total is now 31% lower than last year’s production and 32% below the 5 year average.

A Platts survey sees Brazil’s CS sugar cane crush at around 7 million tonnes for the second half of November with sugar production at just under 500k tonnes. The official Unica data is likely to be released later this week. It was estimated that just 50-55 mills were still active as at the beginning of December as the season’s harvest slowly finishes. If the sugar production estimate is correct then total production for the season would push above 38 million tonnes for the first time.

This morning the market opened 6 points higher on a weaker USD. Currently, prices are holding around 8-10 points firmer but in limited volume. The HK is 2 points firmer at +62 while the KN is 1 point better at +41.

This morning the macro is positive with most commodities firmer on the back of a weaker USD. The BRL ended unchanged last night at 5.13. Th market looks likely to remain range-bound with a continuing bias for the down-side as the funds continue to slowly liquidate longs. However, as mentioned yesterday, the low volume could cause some volatility. Until there is some clarification from India the market appears to be content to settle into a 14 -15 cent range.

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

Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, 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 indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.