Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
Good morning,
The market continued its slow slide lower yesterday despite some early buying that saw prices push above 16 cents. The market had opened 6-7 points firmer on the back of an improved macro picture before quickly improving further hitting the highs of the day by mid-morning. However, the selling improved above 16 cents to soon stop the improvement which then triggered some spec long liquidation which saw prices slowly ease lower. Prices continued to lose ground resulting in the market settling near the lows and at their lowest level in two weeks. The weakening of the front month continued with the HK losing another 7 points to settle at +72. The HK also weakened by 4 points to finish at +40. In London the front month spread also eased slightly to finish at +14.30. The KQ ended a tad firmer at +11.90. The WP improved back to one week highs with the HH WP at 98.20 and the KK WP at just shy of 100.00. The majority of the session the market seemed content to consolidate. However, with each attempt to push higher failing to encourage the funds to appear in any volume more long liquidation took prices lower.
As of the 21st January the Thai harvest remains poor with the crush still running at around 35% below the same time last season at 29.2 million tonnes. Sugar production reached just under 3 million tonnes which is 355 lower year-on-year. All 57 mills are now in action pushing daily crush over 1 million tonnes. It is likely the production will start to catch up with last year but it will be a big ask to better last year’s totals. The record production of 2018/19 is now a distance memory.
This morning the market opened unchanged but soon dropped another 12 points before improving slightly. Currently the market is 5-6 points lower. The HK is 1 point weaker at +70 while the KN is a point better at +41. In early London trading the HK is a tad weaker at +14.10 while the KQ is unchanged at +11.90. This morning the macro is slightly negative with most commodities slightly lower with the USD slightly firmer. The BRL ended at 5.48 around unchanged from Friday and, remains at its weakest for a couple of weeks. It looks as if the market will remain under pressure with 15.50 the next downside target. The front month spread is under pressure with little trade buying and the fund roll to come.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Kevin Watkins, Steven Trigg
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
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