Sugar Market Report for 22 December

Yesterday saw prices soar again with front month hitting its highest level since February 2017 and just failing to reach 21.00 cents before falling back. The market had opened 7 points firmer before immediately pushing higher soon taking out the high hit last week. Good selling was waiting at 21 cents which soon triggered speculative long liquidation which saw prices ease back culminating in hitting the lows of the day as US traders got to their desks. The market then settled into a 15 point range for the rest of the session as the trading volume tapered off only reaching just over 92k lots despite hitting multi-year highs earlier in the session. Nevertheless, it was a new settlement high and suggests another test of 21 cents may be seen especially as the structure remains so strong. The HK gained another 7 points to end at +143 a new high while the KN gained 1 point to finish at +95. In London, the spreads strengthened again with HK ending at +22.00 and the KQ at +22.10. However, the WP finished weaker with HH WP at 108.60 and the KK WP at 118.20. The funds continue to dominate proceedings with the trade continuing to remain cautious. While many feel the rally is over done there is little desire to take on fresh positions in front of year end. Looking back at previous year-ends many have seen prices rally into the last 10 days or so which, again, is adding to the lack of selling in the short term.

This morning the market opened unchanged before slipping slightly lower. Currently, prices are 3 points weaker. The HK and KN are unchanged at +143 and +95 respectively. In early London trading, the HK is a tad lower at +21.50 while the KQ is unchanged at +22.00. The macro is mixed this morning with crude slightly higher, grains/soya around unchanged and the USD Index weaker. The BRL ended around unchanged last night at 5.20. The market remains strong. Several weeks ago when the initial rally from 17.55 was seen many attributed the push above 20 cents the fact that most of the 6 million tonnes of Indian exports would be white sugar. Several analysts saw the range through to the New year at between 19 and 21 cents which has been the case. However, any break out of this range would seem likely on the upside at the moment. The funds will want a high settlement for the year and are unlikely to find much resistance to this desire.

This will be the last Daily Report until the 3rd January so I wish you all very Happy Holidays and a Prosperous, Peaceful and, above all, Healthy 2023.