Sugar #11 Mar’22

The return to sub 20c levels drew out some light physical interest and the initial hedge lifting had prices immediately bouncing up by 15 points to reach 20.01 where the rally came to an abrupt halt. The flat price then meandered within the early range though of concern to the bulls will have been the weaking of the March/May’22 spread, with steady selling across the morning pushing it down to 0.36 points, while March/Jul’22 lots a mighty 11 points in reaching a low at 0.76 points. All remained calm until the start of the US day when a push beneath yesterdays lows, possibly due to a confidence shift on spread movements, triggered off sell stops to send the price quickly down to 19.60, and despite attempts to stabilise a further wave of spec liquidation followed to send the price further south and reach 19.48. As with previous dips over recent weeks the area beneath 19.50 encouraged some greater consumer pricing interest to the fore and this once again provided the basis to consolidate though there was no significant bounce seen and we remained at the lower end of the range. MOC selling left March’22 settling at 19.59, attractive to the consumers as we likely further test support in the near term.

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Sugar #5 Dec21

A firmer No.11 market had us called higher and though we only saw minimal buying interest ourselves there was even less selling in place which led the opening push to take Dec’21 to $520.80 and the Dec’21/March’22 spread on to $6.10. The ripple effect of the move saw March’22 also in excess of $5 higher, with the March/March’22 white premium back at $74.50 as it recovered the lost ground incurred late yesterday. Everything appeared positive until the start of the US trading day when selling emerged to push prices down towards yesterdays $512.40 low, though the pressure was being generated via No.11 and in real terms the market strengthened a touch as March/March’22 nudged in towards the wall of selling placed at $75. Following a pause some light sell stops were then triggered on a subsequent spike down to $507, and though this was quickly gathered up one felt that it struck a blow to the bulls in further unwinding their recent efforts. The only ray of light for the bulls remained via the March/May’22 which saw a further intra-day high at $8.30, although that was not maintained and we were back at $6.40 during the final hour. A calm close saw Dec’21 conclude at $512.90 leaving us still firmly ensconced within the Sep/Oct range.

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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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