Sugar #11 Mar ’22

The recent recovery has improved confidence in sugar once again and though we began today’s session trading a little lower there was limited selling pressure and values were soon able to edge upward to hold near to unchanged values. Volume only started to pick up a little as those in the Americas joined the environment and their arrival marked the start of another push from the long side with March’22 nudging up to the 50% retracement mark at 19.58. It soon passed beyond this level and while progress was steadily paced it was a constant as values pushed ahead from the wider macro where a calmer day was generally being seen. One area where the progress was not matched came from March/May’22 which narrowed marginally to 0.40 points on the rise, maybe a sign that the flat price recovery could struggle to continue in the same way that its turn upward came on the way to the recent bottom. With specs driving the move we filled the gap between 19.73/19.80 left on the move downward and in aiming towards 20c March’22 reached a high at 19.90 during the final 30 minutes. Profit taking then emerged during the closing stages with settlement made at 19.82. The recent moves have marked a remarkable recovery with further upside likely to be tougher to achieve as producer interest resumes above 20c. Little has changed fundamentally over the past two weeks and having overshot lower versus the technical picture and covid fears the question now posed is whether we will see the same to the upside before a measure of calm resumes.

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Sugar #5 Mar ’22

A weaker opening was seen as the recovery drew out a little selling however the market comfortably stabilised ahead of $500 and was then able to pull back upward and hold nearer to $505 as the morning progressed. There was little enthusiasm across the macro with the pace of recovery over the past couple of sessions clearly unsustainable and as the market moved into the early afternoon the feeling was that it may continue to hold sideways and cement a base ahead of $500. Of course, sugar can often take a path of its own and so it proved as the afternoon progressed with such thoughts thrown out of the window and a succession of new highs recorded over the following hours, culminating in a high at $515.80 during the final hour. The move was fairly uniform at the front of the board with nearby spreads showing little net change, while premiums were only marginally up as we kept similar pace to the No.11. Closing activity saw some profit taking against longs to push March’22 back a touch to $513.70, though this still represents another strong showing.

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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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