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Sugar Market Report for 22 April

Good morning,

The market recovered some of the recent losses yesterday after bouncing off a new low for the move. The market had opened8 points firmer but soon headed south to hit the lows of the day about an hour after opening. Prices soon recovered back into the plus column although remained within a tight 8 point range until early afternoon when a buying appeared which saw prices gain 25 points before slipping back slightly before the close although some late buying ensured the market settled near the top of the day’s range. The KN lost 1 point to end at +6 while the NV was 2 points stronger at -11 suggesting the flat price gains were speculative in nature with limited scale up selling in place. In London it was quiet with limited interest. The QV dropped to end at +6.10 while the VZ was a tad firmer at +4.40. This meant the WP ended slightly weaker with the VV WP at 95.60 and the VZ at 91.20. There appeared to be no particular reason for the market to improve although a correction was, probably, to be expected after losing just shy of 70 points since the Easter break. Crude was also firmer which may have encouraged some speculative short covering.

The USDA’s Brussels office announced yesterday that they expect EU sugar production to fall this year to 16.3 million tonnes as farmers switch from beet to other more profitable crops. This would represent a 250k tonne drop in production compared with the last harvest but some 340k tonnes more than in 2020. They also pointed out that the large influx of refugees from Ukraine may boost consumption.

The market opened 7 points lower mainly on a lower crude quote. Currently prices are 18 points lower. The KN is 1 point firmer at +7 while the NV is unchanged at -11. The K-22 OI is slowly dropping reaching 81,180 lots yesterday with another 36k lots traded yesterday. In early London trading the QV and VZ are both slightly firmer at +6.50 and +4.70 respectively. The macro is slightly negative with crude and most grains/soya weaker while the USD Index has recovered much of the losses of the past couple of days as it is expected the US Fed will announce a 50 basis point hike in interest rates when they meet on 3-4th May. The sugar market looks set to remain range bound between 20 and 19.50 cents unless there is a serious change in the macro and especially crude. For the time being the market looks well supported with strong BRL and  traders await harvest data from Brazil’s CS which will, eventually, give some indication on total sugar production.

 

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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