Written Commentary
ADMIS Sponsors ALTSO Rocktoberfest!
June 1, 2023
Good morning,
Yesterday saw another quiet day as the market remained range-bound and the trading volume limited as prices ended either side of unchanged. The market had opened 3 points weaker before falling slightly. However, light support at below 17.90 saw prices improve to hit day’s highs by mid-day. However, as US traders got to their desks prices started to drop back losing 30 points before finding support at 17.75. It was enough to trigger day-trader short covering which saw prices regaining the losses and test the highs again before settling marginally higher on the day. The VH gained 5 points to end at -4 its strongest level since March. The HK finished 3 points firmer at +61. In London the market continued to see some correction to the large gains seen on Friday. The VZ slipped another $2 to end at +28.30 while the ZH was also slightly weaker at +14.70. This meant the WP weakened as well with the VV WP ending at 146.20 and the VZ WP at 117.90. It was another quiet day as the market continues to consolidate while the macro remains volatile. However, it was the fourth consecutive higher close as the market continues to recover from hitting one year lows at the beginning of the month. Unica will release their latest harvest data for the second half of July today at 15:00 (London time). The same period last year saw a crush of 46.7 million tonnes producing 3.03 million tonnes of sugar from a split of 46.43/53.37. A S&P survey of analysts see the crush at 48.6 million tonnes, sugar production at 3.25 million tonnes from a 47.60/52.40 split. Ethanol parity is still below sugar prices so mills will continue to favour sugar but there is a limit to how much cane will go to sugar. Therefore, whether total production can catch up with last season remains to be seen. Half way through July the crush was still running 9.5% lower than same time last season Sugar production was running 17.3% lower so a long harvest tail will be needed to catch up. This morning the market opened unchanged before improving. Currently, the market is 8 points firmer. The VH is 1 point firmer at -3 while the HK is 1 point weaker at +60. In early London trading the VZ is unchanged at +28.30 while the ZH is slightly firmer at +15.60. The macro is a slightly negative picture this morning with crude lower, grains/soya mixed and USD Index a tad weaker while the BRL ended around unchanged at 5.13 last night. The market may remain quiet in front of the Unica harvest data release this afternoon. For the past two reports analyst’s expectations have been lower than actual although it had little impact on prices last time. Therefore, unless Unica is significantly better than anticipated, the market continues to look well supported and may test the highs of Monday (18.14). The funds remain net short and could cover if prices do make a new monthly high. The strengthening of the VH is also a supportive factor as is the continuing strength in London despite the recent correction. |
Contact the ADMISI Sugar Desk team:
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, 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 may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2022 ADM Investor Services International Limited.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, 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 may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
