Sugar #11 Mar’22

The market printed up to 18.50 on the opening but almost instantly slipped back and worked into slight debit as buyers hold back with recent activity having stifled confidence. The morning saw calm trading continue with low volumes being matched, not an encouraging situation for any bulls that remain at the current time with specs showing no interest in pulling back higher. The market began to wobble as we m oved into the early afternoon and the lack of confidence reared its head soon afterwards as March’22 was slammed down by around 20 points to trade at 18.09. The selling looked to be from funds who are liquidating out of remaining long holdings as a general de-risking takes place but once complete the market did make efforts to consolidate with the closer proximity to ethanol parity discouraging them from trading from the short side. The afternoon then saw us trading quietly either side of 18.20c with most participants happy to stand back and remain out of the market ahead of the weekend and showing no interest in the macro once again which was improving later in the day led by improving crude prices once more. March’22 ended at 18.20 and while more support from consumers will be expected at these lower levels it is currently hard to see from where the market can regain some enthusiasm in the near term. 

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Sugar #5 Mar’22

Since reaching up towards $515 on Thursday of last week the market has faced increasing pressure and struggled to stave off the decline and having fallen back beneath $500 support appears to have waned with today’s early activity seeing a fall to $495.30. The market gathered itself over the morning to prevent any further losses however the respite was brief as selling returned to send March’22 down to $493.00 by7 early afternoon. Despite crude prices remaining buoyant (within an otherwise lacklustre macro picture) we have seen sugar strike out on its own recently to potentially reflect feelings of improving crops for the year ahead, and while this largely influences the No.11, as seen by the strong white premium values, there is no escaping the backwash as specs look to liquidate long positions which remained following the decline at the start of the month. Things did settle down and the bulk of the afternoon was spent holding at the lower end of the range, though with only underlying buying from consumers there was no real prospect of recovery. The week ended with a lower settlement value of $495.20, a disappointing conclusion suggesting there may be further struggle ahead.   

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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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