Good morning,
Friday saw an inside day as the market continued to consolidate after the drop seen earlier in the week. However, interest was limited with trading volume just creeping over 72k lots. The market had opened 9 points firmer before improving another 12 points over the next 90 minutes to hit the highs of the day. However, this early buying soon dried up with prices soon falling back to unchanged by the time US traders got to their desks. The market slowly improved over the course of the afternoon but interest was limited. Eventually, the market settled higher on the day with another higher low for the third session which might suggest prices can improve further. The HK ended 3 points firmer at +34 while the KN was 5 points better at +29. In London the ZH dropped to end at +5.70 as did the HK which ended just above flat at +0.20. This meant the HH WP ended slightly weaker at 74.30 while the KK WP was virtually unchanged at 81.50. It was a rather uninspiring session as traders seem unsure of market direction. There was, again, little sign of fund activity suggesting they are done with their selling for the time being unless the lows of last week (18.82) are broken.
The COT as of the 19th of October showed that the funds/specs had cut their net long position by 51,116 to 158,311 which was probably around expectations after the market dropping 125 points during the reporting period. The non-commercials cut their net longs by 33,515 lots to 126,148 after they sold aggressively on Monday and Tuesday. Interestingly, not only did they cover longs but also added fresh shorts. They have now reduced their net longs down to a level not seen since 22nd June when they held around 147k lots of net longs. Then the market was back at 16.30. This might suggest limited further selling for the time being. The commercials cut their net short position by 51,772 to 345,654 as trade covered shorts on the price slide. This may have also included some producer buy backs although the majority of Brazilian sales are below current levels. The Index funds also cut their net longs by 656 to 187,342.
This morning the market opened 7 points firmer before immediately gaining another 8 points on some decent market on opening buying mainly on the back of a positive macro picture. However, after the initial improvement prices have fallen back into the negative column with prices, currently, around 2-3 points lower. The HK is 1 points firmer at +35 as is the KN at +30. In early London trading the ZH is a tad firmer valued at around +6.00 while the HK is unchanged at +0.20. As mentioned the macro is firmer across most commodities with crude and distillates higher. Grains/soya are also firmer while the USD Index is virtually unchanged. The market remains difficult to read at the moment. All the bullish news regarding the Brazilian CS cane is well embedded in the market. The recent rains are continuing with more rain forecast for the entire region over the next 10 days continuing to help build soil moisture levels again. However, the damage done after months of dry weather is expected to impact on the cane no matter how much rain received over the next 6 months with currently sugar production estimates for next season only marginally higher than the current harvest. In the short term the market looks set to try to consolidate at current levels but traders will be wary of another bout of fund selling which could take prices to new lows again.
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.
© 2021 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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