Sugar Market Report for 22 September

Good morning,

The market stabilised yesterday after the volatility of the past two sessions. The market ended slightly firmer as the front month remained at a healthy premium. The market had opened 10 points firmer and then remained within a narrow 10 point range until early afternoon when prices ticked up to hit the highs of the day and just shy of 18 cents. Unable to push higher the market then dropped away as day-trader selling appeared as the macro turned negative. The market dropped nearly 30 points to hit the lows of the day shortly before settlement when prices improved to close in the middle of the day’s range and back in the centre of the range seen since mid-August. The VH improved 2 points to +41 while the HK strengthened 3 points to +63. In London it was a different story as the market sagged again with Z-22 dropping $6.10. The ZH dropped $2 to +25.80 while the HK slipped $1 to end at +9.70. The WP has dropped considerably from its levels a week ago with the ZH ending at 129.00 and the HH WP at 103.20. There appears to be a view that the very high WP as of late is helping to slowly ease the tightness in white sugar. Overall, the market has recovered from the losses of Friday and Monday and appears happy to consolidate back in the recent range just below 18 cents.

The Indian Government’s Food Secretary, Sudhanshu Pandey, said yesterday that the Government will announce a quota for sugar exports “very soon” for the new season which starts in just over a week. It is expected an initial tranche of 5 million tonnes will be allowed with another 3-5 million tonnes later in the season once the harvest and domestic prices are evaluated.

This morning the market opened 2 points lower before improving in thin trading. Currently, the market is 1-3 points firmer. The VH is 2 points better at +43 while the HK is unchanged at +63. In early London trading the ZH and HK are unchanged at +25.80 and +9.70 respectively. The macro is a negative picture this morning after the Fed’s 75 basis point interest increase last night and their hawkish comments about future interest rate increases. Most commodities are trending lower with the USD Index at its highest level since June 2002 at 111.40. The BRL weakened slightly yesterday to end at 5.173. The market is likely to remain range-bound. The V-22 remains at a premium with, just over a week until expiry. The OI dropped to 82,806 lots with another 23,302 lots traded yesterday suggesting a limited delivery. The market continues to await news from India on their export policy.

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.

Latest News & Market Commentary

Explore the latest edition of The Ghost in the Machine

Explore Now