Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
Sugar Market Report for 30 November
- November 30, 2022
- Howard Jenkins
- Follow us on Twitter @ADMISI_Ltd
Good morning,
Yesterday saw the market form a double bottom (19.05/06) before making a good recovery although the market settled well off the highs. The market had opened 14 points firmer but soon fell away dropping over the next few hours to hit the lows of the day as US traders got to their desks. Good support was seen again at just above 19 cents which saw the double bottom put in place. This soon triggered a good recovery with prices improving over 70 points in the next three hours. However, the rally eventually ran out of steam with prices falling back through to the close. Nevertheless, the move did emphasise the good buying at 19 cents. The HK improved 4 points to +107 while the KN was a couple of points firmer at +62. In London, it was, again, quiet with HK improving to +10.80 and the KQ to +14.70. However, the WP was barely changed with HH WP ending at 103.10 and the KK WP at 115.90. The trading volume was not overwhelming at just under 126.5k lots which, probably, aided the volatility seen yesterday. Much of the wider fundamental picture remains bearish.
Analyst and broker Stone X reported yesterday that they see a large 5.2 million tonnes global surplus for the current 2022/23 season. They see the current Brazilian CS production reaching 33.90 million tonnes from 557 million tonnes of cane. For the 2023/24 season, they see Brazilian CS production increasing to 35.6 million tonnes from 587 million tonnes of cane with mills allocating around 45.5% cane to sugar production. This global surplus is at the top end of recent analyst’s ranges but it would appear more will be increasing their surpluses over the coming weeks.
This morning the market opened 1 point weaker before improving.
The HK and KN are both 1 point firmer at +108 and +63 respectively. In early London trading, the HK is firmer at +12.00 as is the KQ at +15.00. The macro is slightly positive this morning with most commodities slightly firmer and the USD Index down slightly. The BRL improved yesterday to end at 5.283. After a couple of days of volatility, it is likely the marker will try to consolidate around current levels. For the time being the range would seem likely to remain between 19 and 20 cents with good buying at lower levels while the large fund net long position will probably cap further gains.
Contact the ADMISI Sugar Desk team:
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
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© 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.
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