Sugar Market Report for 8 June

Good morning,

The market saw some consolidation yesterday after prices recovered from the decline seen since mid-May. The market had opened 10 points higher following the strong close of the previous session but soon fell back to around unchanged. However, another bout of short covering saw prices improve again only to fall back before another spell of buying saw prices push up to the highs of the day late morning. Prices then slipped back but this time the support at unchanged was limited and more selling took prices to the lows of the day before prices improved slightly to end weaker but off the lows. The NV lost 3 points to end at +26 while the VH lost 3 points to end at +14. In London the QV finished a little higher at +5.90 while the VZ was lower at +7.50. This meant the VV WP ended weaker at 128.90 while the VZ was around unchanged at 121.40. As mentioned the market did make an attempt to consolidate yesterday but it was not a very convincing performance especially as the structure weakened after the improvement of the previous session. It would seem all the bullish news is in the market including ‘what if’ scenarios including slow start to the Brazilian harvest and a poor Indian monsoon. Time will tell on both but, at the moment, the Brazilian CS crush is motoring in high gear.

Unica should release their harvest data for the 2nd half of May either tomorrow or Monday. It should show a similar crush of around 44 million tonnes during the period with sugar production at around 2.6 million tonnes as the split remains around 48.50% sugar. For comparison the record 2021/22 season saw 43.5 million tonnes crushed with 4.6 million tonnes sugar from 46.5% split during the 2nd half of May 2021.

This morning the market opened 1 point lower before losing another 6 points. However, prices soon recovered and are, currently, 6 points firmer. The NV is 2 points firmer at +28 while the VH is 1 point firmer at +15. In early London trading the QV is firmer at +6.40 as is the VZ at +7.80. The macro is mixed this morning with crude around unchanged while grains/soya are generally lower and the USD Index is unchanged while the BRL ended at 4.92 last night. The market looks a little vulnerable to falling back and could test the lows of Tuesday. However, end-users will be keen to prices more on a scale down basis so much will depend on whether the funds will liquidate more longs. The up-side does look limited although could improve back to 25 cents as there is probably limited selling above. The market needs some fresh fundamental news – that might come in the form of Unica.

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.

 © 2023 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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