Written Commentary
ADM Appoints Monish Patolawala as EVP and CFO
July 10, 2024
Good morning,
The market quickly reversed most of the gains of the previous session yesterday in relatively thin trading volume. The market had opened 5 points weaker but immediately improved gaining another 16 points on market buying following the firm previous close. However, this proved to be the highs of the day as prices soon started to retreat and by mid-day were back to unchanged where the decline paused before prices continued to drop only finding support at the previous day’s low thereby forming a double bottom. A bout of late day-trader short covering saw prices jump 10 points during the settlement period. Unsurprisingly, the HK dropped 8 points to end at +128 while the KN was also 9 points weaker at +66. In London the structure also weakened with HK ending at +16.80 and the KQ at +18.90. The WP also dropped as HH WP ended at 114.60 and the KK WP at 126.10. There appeared to be no particular reason for the drop back yesterday but does suggest the market is trying to find a level with limited producer or end-user activity within the current range.
A Reuters survey sees soil moisture levels across Brazil’s CS at their highest levels for seven years. This is seen as helping to boost sugar production. This is after a severe drought during 2021 when the cane was heavily impacted. Current weather is very favourable for cane development with constant rain combined with sunny periods.
China imported 520k tonnes of sugar during December which represented a drop of 31.5% compared with December 2021. This brings the accumulative total to 5.27 million tonnes which is down 6.9%.
This morning the market opened 2 points lower before slipped further before recovering back to opening levels. Currently, the market is 3 points higher. The HK and KN are both 1 point lower at +127 and +65 respectively. In early London trading the HK is unchanged at +16.80 while the KQ is a tad weaker at +18.50. The macro is a slightly negative picture with crude lower, grains/soya mixed and the USD Index around unchanged. The BRL weakened against the USD yesterday ending at 5.19. The market’s inability to push higher yesterday and eventually end lower may suggest the market could decline further. The short term downside target is the double bottom at 19.68 and then the next double bottom at 19.45/46.
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.
© 2024 ADM Investor Services International Limited.
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