Sugar Market Report for 8 December

Good morning,

Yesterday saw another quiet day as the market continued to consolidate around 19.50. The market had opened 6 points firmer but soon slipped lower and through the lows of the previous session. Initial support at 19.30 triggered some short covering which saw prices soon push into the plus column. Later in the afternoon as the macro deteriorated prices started to drop lower again soon hitting the day’s lows and their lowest level since the end of November. However, prices soon bounced back to unchanged before gaining 15 points during the settlement period as some market on close buying met with very limited selling resting above the market. The HK improved 2 points to +113 while the KN was also 2 points better at +64. In London, it was also quiet with the HK improving to +13.60 while the KQ was also firmer at +18.30. There was little change in the WP with HH WP ending unchanged at 107.60 while the KK WP was a tad weaker at 119.00. Despite chatter that majority of mills in Brazil’s CS are closing for the season due to rain and possible lower Indian production the market seems to have taken little notice so far although the structure remains firm indicating that physical tightness will prevail over the coming few months.

The Chinese sugarcane harvest has started. The main cane regions experienced dry weather during the summer which impacted the cane. However, ample rains have been received over the past few weeks that have helped mitigate some of the earlier damage. The current weather forecast is seen as dry and cool which will help with the crush.

This morning, the market opened 9 points firmer following last night’s firm close and a higher crude quote this morning. Currently, prices are 16 points higher. The HK is 3 points firmer at +116 while the KN is 4 points better at +68. In early London trading, the HK is a tad lower at +13.20 while the KQ is around unchanged at +18.30. The macro is a slightly positive picture this morning with crude and grains/soya higher while the USD Index is also a tad firmer. The BRL improved yesterday to end at 5.21. The market continues to look range bound for the time being. Chatter from Brazil and India that weather issues may hit production seems to have been seen as a possibility but not a certainty and traders are awaiting more information. Unica should release their second-half November harvest data very soon which should show last year’s production being surpassed by current production but will be hit by rain delays. Therefore, the market looks set to improve slowly as support grows below the market. The up-side target is the double top at 19.94 and then 20 cents. More of a certainty is that the front two spreads will continue to remain firm and could continue to improve.

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.

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