Sugar Market Report for 30 August

Good morning,

Yesterday was a shortened session in NY as London was closed for a UK bank holiday. Prices recovered from early weakness to close around unchanged. The market had opened unchanged before dropping 25 points over the next hour to hit the day’s lows. However, prices quickly recovered and pushed into the plus column by mid-afternoon before slipping back on the close. The VH slipped 4 points to end at +16 after it shot out to +23 on Friday on concerns of physical tightness as the V-22 expiry approaches with no deliveries likely from India and tight stocks in Brazil. The HK slipped 3 points to close at +60. Friday saw a large recovery in prices as the range seen over the previous six session was broken on the up-side as the funds started to cover shorts again. There appeared little fundamental reason for the improvement although the strengthening of the spot month against the rest of the board suggests possible limited deliveries. Nevertheless, the global economic picture is gloomy with high inflation which is likely to trigger a recession and may hit demand. London remains firm although the VZ slipped on Friday to +29.40 on some light profit taking.

The COT as of the 23rd August showed the funds/specs had cut their net short position by 17,463 to 28,235. This was probably in line with expectations although prices dropped lower during the reporting period which appears not to have seen any fresh speculative selling. The non-commercials cut their net short by 7,484 to 30,191. Given the rally seen on Friday it may suggest they have covered more shorts and maybe currently around 20k lots net short. The commercials cut their net shorts by 2,700 to 155,589 and some light end-user pricing noted. The Index funds cut their net long position by just 205 to 183,824.

This morning the market opened unchanged and is currently 1 points weaker. The VH is 1 points firmer at +17 while the HK is unchanged at +60. In early London trading the VZ is a tad firmer at +29.60 while the ZH is weaker at +18.00. The macro is a slightly negative picture with crude a tad lower while grains/soya are trading lower. The USD Index is unchanged while the BRL ended firmer at 5.03 last night. The market has, seemingly, recovered from the lows seen last week having broken higher on Friday. The funds remain short and may cover further which is likely to lift prices further. The VH remains firm which will also help with the positive sentiment as will the continuing strength of London. Nevertheless, there is no compelling reason for prices to make any significant gains from their current levels.

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