A mildly lower opening ensured that the market remained in consolidation mode, and while values ticked down a little further the consolidation took place ahead of 26c and the consumer buying interest which begins beneath. Moving into the afternoon Jul’23 remained confined to a 26.01/26.14 band, and while a little more buying then started to emerge it served only to pull the price back up to the 26.20’s. The newswires then carried the story that the Head of the Federation of Thai Sugarcane Farmers was suggesting that the 2023/24 cane crop could drop to between 70 and 80 million tonnes, and while this is in line with astute estimates already in the market it served to galvanise some fresh buying from specs and in turn algo entities. Jul’23 accelerated quickly to the low 26.60’s with little resistance being put up by growers, and though the move then paused it was a mere break before a second wave of buying saw prices tip at 26.74. The move then stalled and some profit taking began to emerge with expectations that the contract high mark of 26.83 will provide some resistance, through its impact was minimal with the market remaining near to 26.60. Spread movement was limited (and volumes relatively light) as the front three prompts moved along closely aligned, Jul/Oct’23 ending the day at 0.36 points. The flat price held near to the highs through the final stages with Jul’23 settling at 26.66, a strong close which brings the 26.83 contract high into sharp focus.
There was very little to get excited about in the market this morning as a mixed opening soon led values to drop by a couple of dollars to $706.10 before enjoying a morning of quiet consolidation in the $707/708 area. Volumes were poor through this period and fared little better as the flat price nudged back to the positive early in the afternoon with the lack of discernible interest for both spreads and arbs contributing to the malaise. From the depths of tedium however we saw a “day of two halves” spring to life following pessimistic predictions of the next Thai crop, and from nowhere the market was suddenly showing significant gains with Aug’23 extending to the $718.00 area before pausing. The move had little impact on the Aug/Jul’23 which remained either side of $130.00, however that was a sideshow with further buying arriving for the flat price to send the level to $720.30, the highest level so far this moth and within $10 of the contract high. There was some profit taking seen ahead of the close, though values remained to the top of the range with MOC buying ensuring a strong settlement level at $718.20.
