Daily Market Price Update and Commentary 5th August 2021

Sugar #11 Oct’21

An opening punch above 18c proved to be brief and prices soon slipped back down to sit a small way beneath overnight levels though no threat was being made toward the weekly lows. Activity remained quiet through the morning though underlying buying did emerge to support prices back to the 18c area, providing a degree of stability as longs look to prevent against any potential fall back towards 17c. There has been further revision to Brazilian crop estimates from certain parts of the trade and despite feeling that upon any rally we could well see the Indians step back in to fill the void as was the case last week this provided a springboard for a new spec push during the afternoon, which extended quickly through this weeks 18.24 high and extended on to 18.53. Spreads were also being better supported once again due to the nearby buying and we saw Oct’21/March’22 recover to an intra-day high at -0.49 while March/May’22 reached 0.93 points. Inevitably with any spec led move the progress does not run in a straight line and a little long liquidation midway through the afternoon brought a pause in the trend and set Oct’21 briefly back to 18.35 before the upside resumed. The gains extended as far as 18.69 to place sugar a long way clear at the top of an otherwise mixed commodity basket, a sure sign that the move was motivated by a reaction to the Brazilian estimates rather than any other macro factors. We continued at the upper end of the range to see Oct’21 settle positively at 18.62, no doubt pleasing the bulls with last weeks 18.81 contract high firmly back in view. We watch with interest to see whether the higher levels draw out activity from India once again and also to see whether the appetite from the specs sustains on this occasion.  

Sugar #5 Oct’21

A lower No.11 market led us in a touch weaker but having held a low of $446.00 things began to pick back up with both outright and spread support pulling prices into positive ground before the morning was through. Movement continues to be dictated by the No.11 and here we were seeing a resurgence with talk of lower Brazilian crop numbers from the trade drawing renewed spec buying back into the equation which in turn pulled both markets upward. The rally initially extended to $459 before we saw a sharp $5 pullback against long liquidation, however with No.11 maintaining strength we pushed on once more to make new high’s at $460.00. In amongst this volatility we saw nearby spreads make further gains and Oct/Dec’21 reached -$15.50, though the same could not be said for the white premiums which showed more fragility and lost several dollars across the board. With the outlook retaining a positive glow as we approached the close there was a final wave of buying which took prices higher still and ensured a settlement for Oct’21 at $461.80. This settlement brings recent high’s at $464.00 and $466.00 back into view with the technical potential to target the upper $470’s again should this be taken out.

· There was late buying for the spot month which minimised the losses for the Oct/Oct’21 white premium on the day with a closing value well away from the lows at $51.30. Down the board there was no such recovery for 2022 positions however with losses of between $4 and $5 seen as March/March’22 closed at $60.80 and May/May’22 at $78.20.

ICE Futures U.S. Sugar No.11 Contract

ICE Europe Whites Sugar Futures Contract