The market dropped again yesterday to finish at its lowest level since first half of January as the front spread continued to weaken. The market had opened unchanged and did eventually push into the plus column it was more on the back of short covering than any significant fresh buying. The market started to slid back in the early afternoon as more selling appeared and the front spread came under renewed pressure. Some initial support was found at Friday’s lows and the double bottom at 15.55. However, another wave of selling took prices through these lows as close approached with the market settling at the lows and looking rather tired. The KN lost another 7 points to close at just +24 while the NV is in danger of going to a discount having finished 3 points lower at +2. A combination of limited physical demand and adequate supply with the good Indian exports is putting the structure under pressure. In London it is a different story with the structure remaining relatively firm due to continuing shipping issues and lack of containers. The KQ did slip slightly to end at +12.70 as did the QV which weakened a tad to +9.20. However, the front month WP improved again with the KK WP ending at 107.00 while the NQ was unchanged at 99.60. It was another disappointing day for the bulls as the macro continued to weigh on the market. However, the weakening of the NY structure points to a more fundamental change in sentiment from which it may be harder for the market to recover significantly.
There is limited firm fundamental news around. The Thai harvest is all but over while the Indian harvest is about 75% completed whereas the Brazilian CS harvest is still to start. This is the biggest unknown and could have a marked impact on prices over the coming months. The harvest is likely to get off to a slow and late start with all eyes on early Unica data to see how the ATR fares. There will, undoubtable, many views on final production levels based on early figures which is likely to cause some volatility.
This morning the market 1 points lower before slipping lower and breaking below 15.50 as the KN weakened in early trading to +22. Currently flat price currently 12 points lower with KN at +18. In early London trading the KQ is weaker at +12.20 while the QV is around unchanged at +9.20. The macro is, generally, weaker this morning with crude lower and the USD index higher but both within their recent ranges. Other commodities are mixed. The market does look particularly weak as the structure continues to weaken and further weakness looks likely. End users have taken full advantage of the drop and will continue to buy into the weakness. Producer selling has been left behind on this last leg lower. It would seem unlikely that any significant improvement will be seen in the short term as sentiment has become bearish and any rallies will be seen as a selling opportunity.
Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, 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 indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.
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.
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Sugar Market Report for 23 March
The market dropped again yesterday to finish at its lowest level since first half of January as the front spread continued to weaken. The market had opened unchanged and did eventually push into the plus column it was more on the back of short covering than any significant fresh buying. The market started to slid back in the early afternoon as more selling appeared and the front spread came under renewed pressure. Some initial support was found at Friday’s lows and the double bottom at 15.55. However, another wave of selling took prices through these lows as close approached with the market settling at the lows and looking rather tired. The KN lost another 7 points to close at just +24 while the NV is in danger of going to a discount having finished 3 points lower at +2. A combination of limited physical demand and adequate supply with the good Indian exports is putting the structure under pressure. In London it is a different story with the structure remaining relatively firm due to continuing shipping issues and lack of containers. The KQ did slip slightly to end at +12.70 as did the QV which weakened a tad to +9.20. However, the front month WP improved again with the KK WP ending at 107.00 while the NQ was unchanged at 99.60. It was another disappointing day for the bulls as the macro continued to weigh on the market. However, the weakening of the NY structure points to a more fundamental change in sentiment from which it may be harder for the market to recover significantly.
There is limited firm fundamental news around. The Thai harvest is all but over while the Indian harvest is about 75% completed whereas the Brazilian CS harvest is still to start. This is the biggest unknown and could have a marked impact on prices over the coming months. The harvest is likely to get off to a slow and late start with all eyes on early Unica data to see how the ATR fares. There will, undoubtable, many views on final production levels based on early figures which is likely to cause some volatility.
This morning the market 1 points lower before slipping lower and breaking below 15.50 as the KN weakened in early trading to +22. Currently flat price currently 12 points lower with KN at +18. In early London trading the KQ is weaker at +12.20 while the QV is around unchanged at +9.20. The macro is, generally, weaker this morning with crude lower and the USD index higher but both within their recent ranges. Other commodities are mixed. The market does look particularly weak as the structure continues to weaken and further weakness looks likely. End users have taken full advantage of the drop and will continue to buy into the weakness. Producer selling has been left behind on this last leg lower. It would seem unlikely that any significant improvement will be seen in the short term as sentiment has become bearish and any rallies will be seen as a selling opportunity.
Contact the ADMISI Sugar Desk team:
Howard Jenkins, Kevin Watkins, Steven Trigg
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
Registered in England No. 2547805 a subsidiary of Archer Daniels Midland Company. Risk Warning: Investments in Equities, CFDs, 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 indeed may incur additional liabilities. These Investments may entail above average financial risk of loss, and investors should therefore carefully consider whether their financial circumstances and investment experience permit them to invest and, if necessary, seek the advice of an independent Financial Advisor. Some services described are not available to certain customers due to regulatory constraints either in the United Kingdom or elsewhere.
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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