Sugar #11 Jul’22

The slow “action” (if it can be called that) from yesterday was maintained through the early part of today’s session, with nearby values trading a few points lower before edging along quietly in the mid 19.50’s for Jul’22. There was no change to this situation until we were well into the afternoon, a mixed macro failing to provide any inspiration, though eventually it seems that longs became bored of the situation and so pushed values back upward to recover some of the losses from earlier in the week. Selling was limited, in part due to the holiday in Brazil which removed most pricing from the market for today, and so Jul’22 was able to comb into the 19.80’s before stalling as the buying eased back. The rally impacted the May/Jul’22 slightly with the strength of Jul’22 leading the differential back into 0.04 points, with volume still reasonable despite the May’22 Open interest figure reducing to 81,180 lots, a number that with seven sessions remaining indicates an orderly liquidation is taking place amongst those who will no be involved in the tape. The upper end of the range was maintained through into the close, leaving Jul’22 to settle at 19.81. Tomorrow sees Brazilian producers return which may again change the dynamic, though in general terms the activity seems likely to continue within the confines of recent parameters.

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Sugar #5 Jul’22  

The day started quietly with buyers few and far between, and on low volumes this allowed prices to ease downward through the mid $530’s. With the macro quiet and the market suffering something of a post expiry hangover the limited interest left values juddering along just ahead of the early morning lows, with no change to this situation for several hours and the market seemingly set for another day within a narrow range. The malaise was only broken as we moved through the afternoon, though it was more in reaction to a spec push for No.11 than any whites led move as prices pumped up on moderate volume. The gains levelled out with the price in the lower $540’s, and a fresh malaise ensued, only at higher levels with sideways trading resumed. Spreads were particularly slow today, a mere 350 lots of Aug/Oct’22 having traded as we moved through the final hour, while White premiums were barely traded. The gains were maintained through into the close with nearby values ending more than $4 higher, though overall the performance changes little with the same broad range seen throughout April expected to continue unless we find fresh macro impetus.

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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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