Sugar #11 Mar’22

Perhaps because of the Brazilian holiday and the late start (due to the clock shift in the UK and USA), market today was marked by relatively low liquidity. In the absence of new developments and with very low selling from commercials, the Ethanol boom and the strength in the energy markets, coupled with an unwillingness from India to subsidize sugar exports provide an overall bullish picture to the flat price. After 6.30 am we saw steady buying pressure appeared, but the market found some resistance in the 19.50s and remained rangebound in there for most of the session. Within the last two hours, some reverse pressure appeared and market eased to the 19.40s, remaining there until the end of the day, settling at 19.36. The bullish sentiment took 22/23 spreads up accordingly, however HK22 came down by about 4 points, suggesting that short term demand will remain low and. With the rains in Brazil, this could also mean a smoother crop start in 2022.

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Sugar #5 Dec21

White sugar continues to move sideways within the broad range which has endured since mid-August and on the current low volumes there appears to be no end in sight to this situation. With Dec’21 now just two weeks from expiry the focus has shifted forward to March’22 where initial buying took prices back up through $500 during the early part of the day as some light hedge lifting emerged in reaction to Friday’s slide. As ever there were very few resting orders in place which allowed March’22 to spike up through $504 mid-morning, the front of the board being aided by some underlying support for the Dec’21 spreads as positions continue to be rolled ahead of expiry. Having reached $505.00 shortly after noon we settled back down into the range on thinner outright volume, with only the Dec’21/March’22 spread seeing any noteworthy volume as its recent strength extended to $12 premium. The final couple of hours saw March’22 quietly retreat to the $500 area where it remained despite some late position squaring, closing at $499.80.

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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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