Written Commentary
Good morning,
The market remained either side of unchanged and within a relatively narrow range yesterday although prices did improve post-settlement. The market had opened unchanged but soon slumped 12 points on some early selling into limited buying. However, this proved to be the low of the day with prices soon improving pushing into the plus column by mid-morning. The gains improved further with highs of the day in place at mid-day. The market then dipped again as US traders got to their desks but soon improved as support below 15.70 held. The market then yo-yoed either side of unchanged through to the close to settle unchanged. However, a bout of late buying saw prices improve 7 points in the last five minutes of the session. The front month roll has started in earnest with just under 70% of the total volume spreads. The HK dropped 2 points to end at +70 while the KN was a couple of points higher at +42. In London it was a similar picture with the HK ending weaker at +13.60 while the KQ was virtually unchanged at +12.00. The WP slipped slightly with the HH WP $1 weaker at 97.20 while the KK was also slightly weaker at 99.00. Another day of consolidation with the market steadying after three days of losses and may explain the post settlement strength. Nevertheless, sugar prices did not follow many other markets with grains rallying again after the funds took a breather.
Little fresh fundamental news around yesterday. The Indian harvest continues apace with over 40 million tonnes of cane crushed so far. Rains across Brazil’s CS continue to help the cane recover from the dry winter spell. Stone X now put next season’s cane crop at around unchanged from last at just over 590 million tonnes although other analysts still see it lower with Czarnikow putting it at around 580 million tonnes. The Thai harvest remains sluggish and well behind last season’s very modest crop. Indian exporters are continuing to sell good quantities of sugar taking advantage of the export subsidies and Brazil’s off-season.
This morning the market opened 10 points higher than settlement and 4 points firmer than last traded price before improving another 10 points. Currently, prices are 18-19 points firmer. The HK is 3 points better at +73 as is the KN at +45. In early London trading the HK and KQ are around unchanged at +13.70 and +12.00 respectively. The macro is positive again this morning with most agricultural commodities firmer although the UDS is also better. The BRL made a good recovery yesterday after two weak days ending at 5.35 against the USD. The market looks set to test the 16 cent level and, if so, may improve further but it is difficult to see any significant rally back to the highs developing. Nevertheless, unless the macro reverses again the downside looks limited to around 15.60.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Kevin Watkins, Steven Trigg
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
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