Sugar 11 Mar’22
Yesterday’s positive technical showing inspired some early support, and the initial leap was comfortably maintained throughout a quiet morning with March’22 holding near to 18.80. This provided a solid platform for US based specs to try and continue the move once volumes picked up during the afternoon although their initial efforts soon petered out leading to some nervous long liquidation and a dip to 18.75. The more significant action for the day then emerged as another effort higher pushed to new highs in the 18.90’s with buy stops elected which spiked the price up through 19c. It was not just the flat price which was buoyant with nearby spread values also benefitting from the strength as March/May’22 reached up to 0.34 points, though as with recent weeks the spread topped out in this area and by late afternoon was trading back to 0.28 points. Some long liquidation was seen for the flat price during the final hour to draw the price back from its 19.15 high mark however there was plentiful support from remaining long holders on the closing run to ensure that a strong performance concluded above 19c, settlement being established at 19.07. Looking ahead the specs will likely want to continue the recovery although progress will likely be a little more difficult with producers potentially starting to price again at these levels (though Brazilians may be hindered by the USDBRL move back towards 5.50). Congestion in the upper 19.30’s may bring some resistance though more significant technical resistance is then not seen until 19.90 should the buyers be prepared to take us that far.
Sugar #5 Mar’22
A firmer opening was maintained throughout the early part of the day as those longs who have re-entered the fray on the way back higher look to continue pushing upwards. Outright volume was fairly moderate which made it tough to push into the selling which lay above yesterday’s $512.20 high mark, something which was made tougher still by the presence of increased March/May’22 selling where the differential had dropped off towards $9. There was a marginal new high for the move recorded at $512.50 however with the momentum waning prices began to slip back by a couple of dollars, which combined with the strength of No.11 started to weigh heavily upon white premium values. This became a recurring feature throughout the afternoon with the March’22 contract in particular struggling to push upward. The flat price did make it back to match the earlier high at $512.50 but alongside the spread selling knocked March/May’22 back down to $6.70 while the March/March’22 white premium was more than $8 lower as it traded beneath $90 due to surging No.11 values. There was some brief respite for the spread as it moved back to $7.50 on the call while the March’22 ended the day at $510.10 showing signs of fatigue which may remain for the near term as the short term overbought indicators unwind.
