Sugar Market Report for 24 January

Good morning,

Somewhat expectedly the market remained range bound yesterday remaining either side of 19.70 similar to the previous three settlements. The market had opened 9 points lower before posting the low of the day. However, once the early market on opening selling was completed prices started to rally gaining 32 points by mid-morning. The market held at these levels for a while before tumbling back to the lows over the next couple of hours. The market eventually improved on day trader short covering before settling around unchanged in limited trading volume. The HK dipped 5 points to +126 while the KN ended unchanged from the second session at +64. In London, the HK dropped slightly to end at +14.10 while the KQ was a tad firmer at +18.80. However, the WP improved with HH WP up $1.50 to 113.10 and the KK WP up just over $1 at 126.80. The market continues to consolidate after the volatility of December and early January as traders gear up for the spot month expiry in five weeks’ time.

Despite a proclamation from the Indian government last week that no further exports of sugar will be allowed this season, it has been reported in the Indian press that it is not completely out of the question. State sugar commissioners are to meet next month to assess production and demand. Food secretary Sanjeev Chopra has said that the Government is open to revisiting the export quota depending on production and demand.
The French government has officially dropped plans to allow sugar beet farmers to use neonicotinoid pesticides this season after a ruling by the EU court that rejected any exemptions. The French Government will cover any losses incurred by growers if disease occurs this year according to Agricultural minister Marc Fesneau. There is some annoyance of the ban, given imports of sugar and ethanol still comes from countries which have not banned neonicotinoids. While, in the short term, farmers will be protected to a certain extent this season the longer term view is that the ban will lead to a further decline in beet plantings although it should be remembered that the ban is to protect bees which are also crucial for crop fertilisation.

This morning the market opened unchanged. Currently, it is 2 points lower. The HK is 1 point firmer at +127 while the KN is unchanged. In early London trading, the HK is a tad firmer at +14.30 while the KQ is unchanged at +18.80. The macro is fairly benign this morning with crude a tad lower while grains/soya a trending slightly higher while the USD Index remains near multi-month lows. The BRL slipped slightly yesterday ending at 5.196. The market looks set to remain range-bound around the opening level of 19.70. Support seen at 19.50 while selling is building above 20.00 cents. Unless the spot premium starts to deteriorate then it would seem unlikely any wholesale sell-off will be seen while there appears to be little desire for prices to increase.

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.

© 2024 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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