Sugar Market Report for 15 September

Good morning,

An inside day saw prices end lower as the VH came under pressure as India suggested the export ban will be lifted soon. The market had opened 2 points firmer before improving further. Prices remained firm throughout the morning pushing up to 18.50 where some resistance was found. Eventually, buying took prices to the highs of the day but a test of the previous sessions high failed and prices soon started to drop away as the VH weakened. The market, eventually, settled at a two day low. The VH lost 10 points to end at +30 while the HK ended unchanged at +51. In London the VZ improved to end at +66.90 as the remaining shorts unable to deliver roll positions forward. The OI in V-22 dropped to 6,408 lots with another 3,042 lots traded yesterday. Chatter is that Centrals and Brazilian sugars will be delivered against the tape but total quantity will be small at around 150k tonnes. The ZH slipped slightly to end at +32.60. The WP also weakened with the VZ WP at 135.10 and the HH WP at 109.10. The market remains range-bound as increasing production across Brazil’s CS plus the resumption of India exports weighs. However, the physical market remains tight nearby with spot month remaining at a premium so the down side would also seem limited in the short term.

Two Indian Government sources have said that the resumption of exports will be allowed for the new season starting in October. It is expected a first trench of 5 million tonnes will be permissioned with another 3-5 million tonnes later next year once the 2022/23 harvest and domestic market have been assessed. It is estimated around 400k tonnes has already been sold in anticipation of the export ban being lifted. Most current estimates expect total sugar production to reach 36 million tonnes next season similar to this season’s output.

Brazil’s CS is seeing rain across the region with further rain over the next 10 days. While this may hamper field operations it bodes well for the remaining standing cane and for next season with soil moisture levels remaining adequate.

This morning the market opened 3 points firmer. Currently, prices are around unchanged. The VH is, currently, 5 points firmer at +35 while the HK is 1 point firmer at +52. In early London trading both the VZ and ZH are unchanged at +66.90 and +32.60 respectively. The macro is slightly negative this morning with crude barely changed, grains mixed and the USD Index up. The BRL ended around unchanged at 5.18 last night. All eyes will be on the V-22 white sugar expiry. Additionally, it is the V-22 raw sugar option expiry today. Most of the OI is around 18 – 18.50 cents which suggests prices will remain within this range today. Indeed H-23 remains steadfastly bang in the middle of the range seen since 18th August.

Contact the ADMISI Sugar Desk team:

Phone: +44(0) 20 7716 8598

Email: admisi.sugar@admisi.com

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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.

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