Sugar Market Report for 14 April

Good morning,

The market saw modest gains yesterday but remained within the range of the previous two sessions. The volume was, again, bolstered by heavy fund rolling from spot. The market had opened virtually unchanged before improving slightly but trading volume was limited. The market soon settled into a narrow 9 point range for the rest of the morning only shaking off its sleepiness as US traders got to their desks when prices start to improve. Prices gained 20 points before the highs of the day were reached when resistance was found at the previous sessions highs. The market soon started to slip away on light trade and speculative selling. By settlement prices had given back to early afternoon gains to settle in the bottom half of the day’s range. The KN remained within a relatively tight range for much of the session either side of flat until late in the day when the fund roll increased which saw the KN drop to -7 by settlement. Today should be the finish of the official fund roll. The NV improved 3 points to finish at +3. In London the KQ improved just over $1 to end at -6.60. The K-21 OI dropped to 4,688 with another 2,872 lots traded yesterday suggesting a delivery below 100k tonnes at the moment. The QV improved marginally to +3.00. This saw the WP slip slightly with the NQ WP ending at 89.10 and the VV WP valued at 86.70. It was another slightly uninspiring day as the majority of the volume remained spread based. However, the market did regain most of the losses of the previous session and continues to look well supported.

Unica released their second half March CS crush data yesterday. It showed that just under 5 million tonnes of cane was crushed producing 174k tonnes of sugar with a sugar split to ethanol of 32.2%. These figures are, officially, against the 2020/21 season so final accumulated totals for the season see total crush at 605.5 million tonnes with total sugar production at a record 38.46 million tonnes with an average sugar split of 46%. It is a pretty impressive achievement in an extraordinary season. Total cane crushed was just over 2.4% higher than the previous session but total sugar production up a massive 43.7% as mills concentrated on sugar as ethanol demand slumped. It would seem unlikely these levels of sugar production will be achieved again anytime soon. Needless to say it is far too early to make any presumptions on the total production for the new season but traders will be keen to see the data for the new season in a fortnight. However, it does seem the season if off to a slow start with sugar production down 23% compared with same time last year although, as expected, the split was higher.

This morning the market opened 7 points firmer before improving further. Currently, prices are holding around 12 points firmer. The KN is 1 point firmer at -6 while the NV is a couple of points stronger at +5. In early London trading the KQ is firmer again at around -5.90 as we come to the last two sessions before expiry. The QV is also stronger valued around +3.5. The macro picture is positive this morning with, virtually, all commodities higher while the USD index is slightly weaker. Crude is higher on OPEC view that oil demand will rise over the second half of 2021 as the world-wide vaccination programme which should see further restrictions easing. Because of this demand improvement OPEC have already agreed to increase output by more than two million barrels a day over the coming months. Adding to the mix Chinese economic data released yesterday gave the entire commodity sector a boost yesterday. Sugar looks likely to push higher today with positive macro picture and the continuing uncertainty over Brazilian production for the season. The N-21 double top at 15.64 is likely to be breached which might trigger some fresh buying. The front spread might also improve with much of the fund roll now complete.

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.

 © 2021 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.

© 2024 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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now