Sugar #11 Mar’22

The strong performance on Friday afternoon provided the latest opportunity to break out of the last month’s range during which time we have seen March22 capped at 20.38. Aggressive buying for the opening call saw to it that this mark was immediately pierced as we reached 20.50, and though selling pushed us back a touch the same mark was reached again soon afterwards as longs looked to maintain the initial strength. Activity then settled down and the rest of the morning was spent retracing back down through the range, with a brief print into lower ground following at the start of the US morning. Whether this was a test or merely some light liquidation the refusal to buckle gave the market some fresh impetus which following some steady build up enabled a fresh wave of buying to take us through the morning highs and onward to 20.61, the highest level seen since 2nd September. With the USDBRL seemingly remaining irrelevant due to the ongoing absence of producer pricing and a surging energy sector inspiring the reaction over the past 1.5 sessions all the foundations were in place to continue to look towards the 20.94 contract high mark, however such is the fickle nature of a spec / day trader environment that instead we saw some small retracement develop into a more aggressive round of long liquidation that quickly had the price trading to a new daily low 20.22. The fall also unwound the strong gains which had been recorded for the spreads, leaving the board flat to previous settlements having earlier seen March/May’22 extend to 0.55 points and May/Jul’22 to 0.59 points. The flat price chopped around the bottom end of the range during the final 90 minutes, concluding with a modest gain for March’22 at 20.33 which maintains some positivity despite not being above 20.38 as the longs would have wanted.  

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Sugar #5 Dec21

Friday night’s close right around the old double top (having earlier traded through) gave the market some much needed positivity and early trading saw buying which further extended the break from the range that had curtailed proceedings in recent weeks. While progress was not overly dynamic we were maintaining comfortably above $520 throughout the morning and into the early afternoon, leading to some variance in the white premium with March/March’22 trading across the upper $60’s as No.11 saw some greater price variance. Quiet trading was broken as the market used the platform of today’s stability to push to a new contract high $527.30 midway through the afternoon, but though technically strong the move lacked the continuing support necessary to maintain and subsequent long liquidation sent the price back quickly to $520 where support was being seen ahead of the double top. We continued at the lower end of the range through the closing stages, ending the day with Dec’21 at $521.90, still a positive close though less so than may have been anticipated a couple of hours prior.

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ICE Futures U.S. Sugar No.11 Contract

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ICE Europe Whites Sugar Futures Contract  

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Jon Whybrow

Jon joined CZ in 1991, working in the Treasury department before moving to join the derivatives team in 1994. Over 30 years Jon has built up significant experience across derivatives markets and products, particularly sugar, and is now Head of Flow derivatives providing market execution services for CZ’s global client base. He is responsible for the market commentaries which are published each day on CZ app.

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