Sugar Market Report for 2 August

Good morning,

The market dropped to a fresh one year low yesterday on a weak crude market before recovering to close near the top of the day’s range and in the plus column. The market had opened 4-5 points stronger before improving another 6 points before slowly falling back throughout the morning. However, it was only in the early afternoon that a bout of selling took prices lower and through the recent lows to hit its lowest level since 20th July 2021 (1st month cont.) as funds sold. Enough support was seen at 17.20 to trigger some short covering which saw prices quickly recover gaining 45 points over the last ninety minutes of the session hitting the day’s highs during post-settlement trading. The VH gained 3 points to end at -12 while the HK was unchanged at +63. In London there was little change in the strong structure with the VZ ended a tad weaker at +29.10 while the ZH was unchanged at +9.70. The WP did drop probably on the late surge in NY. The VVWP ended at 135.90 and the VZ WP at 106.90. It was a choppy market with the market initially reacting to a weak crude market with WTI hitting its lowest level since mid-July on higher Saudi exports and anticipated lower demand. However, the swift recovery does suggest that the market maybe near the short term lows with limited selling resting above the market.


Russian 2022 sugar production is expected to reach 6 million tonnes compared with 5.9 million tonnes last year according to the Russian Sugar Producers Union. This total should cover domestic consumption and that of neighbouring countries which share the Eurasian Economic Union with Russia.


Brazil exported 2.88 million tonnes of sugar during July which is just over 14% more than the 2.47 million tonnes exported last July.


Pakistan has decided against lifting the export ban on sugar. This is despite excess stocks of 1.2 million tonnes. It would seem the Government’s Sugar advisory commission was unable to take a decision on whether to allow some exports. Nevertheless, it is thought there maybe a change in policy in time as the country is facing a USD shortage.


This morning the market opened 7 points firmer on some market-on-opening buying. However, the market soon reversed and prices are currently, 10 points weaker. The VH is 1 point better at -11 while the HK is unchanged at +63. In early London trading the VZ is weaker at +27.40 while the ZH is also lower at +8.70. This morning the macro is a negative picture with crude lower, grains/soya mixed to lower and the USD index a tad firmer. The BRL slipped a little yesterday to end at 5.18. The market remains under pressure from the macro and looks set to remain at the bottom end of the recent range. The key is whether the funds will sell more. They are likely to be around 50-60k lots net short currently. Therefore, they could continue to sell but some caution maybe seen. They have been reluctant to build large short position over the past couple of years. In April 2020 they got to around 78k lots net short when the pandemic hit all markets hard.

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.

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