The market rocketed higher yesterday as fund buying met with limited selling. Prices hit their highest level since 25th February as the 18 cent level was convincingly breached. The market had opened unchanged before dipping slightly but this selling was short lived with prices soon starting to improve as good buying pushed prices higher throughout the morning with little pull-back at all. Just after US traders got to their desks the buying intensified as the previous day’s highs were breached which triggered buy stops and another wave of fund buying. The market continue to push higher with only limited resistance seen in front of 18 cents. This was soon breached which saw the market push up another 14 points to the highs of the day. Eventually, the fund buying subsided slightly which trigger some light speculative liquidation but the market was in no mood to retreat too far and by the close prices were back up to the highs finishing a very positive performance. The NV improved 7 points to end at a 1 point premium while the VH improved 12 points to settle at +12. In London the QV also improved again to a slight premium of +0.30 while the VZ also improved over $2 to end at +1.50. The buying in NY saw the WP weaken slightly with the NQ WP ending at 81.20 and the VV at 79.90. Yesterday’s move had been on the cards for several day after prices had steadily improved from the sharp sell-off two weeks ago. The fund buying has intensified recently after having trimmed longs and they were buyers across the commodity spectrum yesterday as the equity market saw a large drop on tech stocks weakness. With increasing concerns over inflation the funds continue to see commodities as a buy with weather concerns adding to the mix. Sugar also has the added uncertainty over the Brazilian CS harvest.
Unica will release their harvest data for the second half of April today at 15:00 (London time). During the same period last season nearly 38 million tonnes of cane were crushed with just over 2 million tonnes of sugar produced. A year earlier in 2019/20 the crush was 31.73 million tonnes with sugar production 1.04 million tonnes. This season expectations are for a 31 million tonne crush with around 1.2 million tonnes of sugar. It could be that yesterday’s rally was triggered by expectations of a bullish report from Unica but it is too early to draw any firm conclusions from a harvest that only started a month ago.
The French Farm Ministry reported yesterday that they have kept their planted area estimate for sugar beet at 396k hectares which suggests that French farmers have replanted much of the beet that was damaged by frost in early April. If this is the case then yields are still likely to be impacted by the late planting and the weather over the rest of the growing season.
This morning the market opened 7 points firmer before pushing through the highs of yesterday. Currently, prices are 12 points firmer. The NV is unchanged at +1 while the VH is 6 points higher at +18. In London the QV is also firmer at +0.80 while the VZ is firmer at +2.20. The macro is positive this morning with most agricultural commodities higher as well as crude while the USD index is slightly firmer. The market remains very positive with further gains looking likely as the market awaits the Unica data. While concerns continue as to the state of the Brazilian CS cane crop it should be noted that prices are pushing up to a level that Indian sugars become viable without subsidies and Indian exporters will be keen to sell. It will be a test of the physical demand which has been questionable recently. Nevertheless, the funds will see limited selling above the market and are likely to continue to exploit the situation.
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.
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.
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.
Sugar Market Report for 12 May
Good morning,
The market rocketed higher yesterday as fund buying met with limited selling. Prices hit their highest level since 25th February as the 18 cent level was convincingly breached. The market had opened unchanged before dipping slightly but this selling was short lived with prices soon starting to improve as good buying pushed prices higher throughout the morning with little pull-back at all. Just after US traders got to their desks the buying intensified as the previous day’s highs were breached which triggered buy stops and another wave of fund buying. The market continue to push higher with only limited resistance seen in front of 18 cents. This was soon breached which saw the market push up another 14 points to the highs of the day. Eventually, the fund buying subsided slightly which trigger some light speculative liquidation but the market was in no mood to retreat too far and by the close prices were back up to the highs finishing a very positive performance. The NV improved 7 points to end at a 1 point premium while the VH improved 12 points to settle at +12. In London the QV also improved again to a slight premium of +0.30 while the VZ also improved over $2 to end at +1.50. The buying in NY saw the WP weaken slightly with the NQ WP ending at 81.20 and the VV at 79.90. Yesterday’s move had been on the cards for several day after prices had steadily improved from the sharp sell-off two weeks ago. The fund buying has intensified recently after having trimmed longs and they were buyers across the commodity spectrum yesterday as the equity market saw a large drop on tech stocks weakness. With increasing concerns over inflation the funds continue to see commodities as a buy with weather concerns adding to the mix. Sugar also has the added uncertainty over the Brazilian CS harvest.
Unica will release their harvest data for the second half of April today at 15:00 (London time). During the same period last season nearly 38 million tonnes of cane were crushed with just over 2 million tonnes of sugar produced. A year earlier in 2019/20 the crush was 31.73 million tonnes with sugar production 1.04 million tonnes. This season expectations are for a 31 million tonne crush with around 1.2 million tonnes of sugar. It could be that yesterday’s rally was triggered by expectations of a bullish report from Unica but it is too early to draw any firm conclusions from a harvest that only started a month ago.
The French Farm Ministry reported yesterday that they have kept their planted area estimate for sugar beet at 396k hectares which suggests that French farmers have replanted much of the beet that was damaged by frost in early April. If this is the case then yields are still likely to be impacted by the late planting and the weather over the rest of the growing season.
This morning the market opened 7 points firmer before pushing through the highs of yesterday. Currently, prices are 12 points firmer. The NV is unchanged at +1 while the VH is 6 points higher at +18. In London the QV is also firmer at +0.80 while the VZ is firmer at +2.20. The macro is positive this morning with most agricultural commodities higher as well as crude while the USD index is slightly firmer. The market remains very positive with further gains looking likely as the market awaits the Unica data. While concerns continue as to the state of the Brazilian CS cane crop it should be noted that prices are pushing up to a level that Indian sugars become viable without subsidies and Indian exporters will be keen to sell. It will be a test of the physical demand which has been questionable recently. Nevertheless, the funds will see limited selling above the market and are likely to continue to exploit the situation.
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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