Written Commentary
Good morning,
Friday was a very quiet session in NY with London closed for the second successive session due to the Platinum Jubilee celebrations and holidays. The market had opened unchanged but immediately gained 7 points to hit the highs of the day shortly after the opening. However, this early strength soon dissipated with prices dropping 17 points over the next 45 minutes to hit the lows of the day. The market then quietened considerable with just a nine point range seen for the rest of the shortened session with the market eventually settling at its lowest level since 13th May and some 95 points off the highs hit on 17th May. The NV ended unchanged at -18 while the VH was a couple of points weaker at -32 and down at the recent lows.
The COT as of the 31st May showed the funds/specs cut their net long position by 12,935 to 121,623 during a period when prices dropped just over 40 points so the cut was expected. The non-commercials cut their net longs by 6,258 to 82,489 and back to the level they had in the middle of May. It would seem they are not keen to build a substantial long position at the moment and it is just the short term funds involved. The commercials cut their net shorts by 14,442 to 364,105 as trade cut shorts as the market fell. The Index funds cut their net long position by 1,507 to 242,482.
India is expected to export a total of 10 million tonnes of sugar this season which is limit the government will allow. Mills have already shipped 8.5 million tonnes with another 1.5 million tonnes to be shipped by end of September.
Rains across Brazil’s CS are expected this week which will be seen as beneficial for the cane but may halt the crush for a few days.
This morning the market opened 16 points higher before swiftly gaining another 10 points on the back of positive macro picture and lack of Indian exports over the next 4 months and Brazil will continue to favour ethanol production over sugar. Currently, prices are 32 points firmer. The NV is 1 points stronger at -17 while the VH is unchanged at -32. In early London trading the QV is down at 23.70 while the VZ is slightly firmer at +17.00. As mentioned the macro picture is positive withy most commodities higher this morning. The market looks set to improve a little more as Brazilian sugar production continues to dominate traders thinking. The market gapped higher this morning so downside target is 19.42.
Contact the ADMISI Sugar Desk team:
Phone: +44(0) 20 7716 8598
Email: admisi.sugar@admisi.com
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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.
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