Sugar Market Report for 12 April

Good morning,

Friday saw a marked contrast between to two markets on Friday with NY gaining over 50 points by mid-afternoon to hit its highest level since 22nd March while the front spread in London collapsed to end at a $10.40 discount. The market had opened 8 points firmer and continued to slowly improve through-out the morning and early afternoon in relatively thin volume. However, the market suddenly jumped over 30 points in the space of a few minutes as buy stops were triggered at around 15.45. However, once this initial buying dried up prices slipped slowly back to settle bang in the middle of the day’s range. Nevertheless, it was a positive performance with the market settling at its highest level in over two weeks. The KN improved 5 points to end at +5 while the NV was 7 points better at +6. There was some trade buying of the spread after its collapse over the past couple of weeks and held well considering the heavy fund rolling volume which boosted the total volume to well of 250k lots. In London it was a different story with the KQ collapsing another $6.5 to end at a discount of 10.40. It would appear very little interest to take delivery. The OI in K-21 dropped to 13,644 lots with nearly 10k lots of volume on Friday so the current OI should be well below 10k lots with 4 trading sessions to go until expiry on 15th April suggesting a small delivery at the moment. The KK WP obviously, took a dive as well ending at 81.70 while the NQ WP was a tad lower at 93.20.

The COT showed that, as of the 6th April the funds/specs had cut their net long position by 5,497 lots to 147,286 which was in line with expectations with prices dropping to their lowest level since December. The non-commercials cut their net longs by 4,990 to 100,759 as they continue to cut their long position. However, over the past few sessions it is likely they have started to reinstate some of these longs as the market bounces off the triple bottom of 14.67-69. However, whether they continue to buy remains to be seen. The commercials cut their net shorts by 11,763 to 377,612 as end users continued to price into the decline in prices and are now probably now rather more relaxed about their pricing have got well behind by the end of February. The index funds cut their net longs by 6,266 to 230,325.

This morning the market opened a couple of points firmer before improving another 4 points but early trading volume was thin. Currently prices are holding around 7 points firmer at the moment. The KN is 1 point weaker at +4 while the NV is 1 point firmer at+7. In early London trading the KQ is around unchanged at -10.40 while the QV is also valued unchanged at +5.30. The macro is slightly negative this morning with most commodities trending slightly lower while the USD index is a little firmer. The market continued to improve last week and it does look as if the lows maybe in place for the time being. However, it is difficult to see any serious improvement developing especially considering the weakness in the front month in London. If there is little demand for near-by white sugar it is unlikely demand for raws will be markedly different.

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.

 © 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.

© 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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