A morning of quiet consolidation saw Jul’23 sit predominantly in the 26.60’s, no doubt pleasing the longs as it consolidated yesterday’s gains and maintained potential to look to the 26.83 contract high. It was with some surprise therefore that the start of the US morning saw a sharp correction back down to the 26.40 area, with the chatter suggesting that this movement was based upon expectations of improved UNICA numbers. A further decline to 26.03 was seen ahead of the UNICA release, which against expectations showed that for the second half of April Cane at 21.003mmt / Sugar 0.989mmt / Mix 43.81% / ATR 112.79 – beneath most analyst’s predictions. The market duly responded to this with a recovery 26.50 as short covering mixed with fresh buying, though again the market lost momentum with Jul’23 finding itself back at 26.30 heading into the final hour. As with yesterday’s rally the flat price movement had little impact on the spreads with Jul/Oct’23 holding at around 0.34 points while Oct’23/Mar’24 was sitting unchanged at 0.42 points. Further losses were incurred through the closing stages with new session lows recorded at 25.99 before settling at 26.02, and with this erasing yesterdays gains in full it suggests that patience is required from the bulls if they wish to mount another concerted upside move.
Yesterday saw the market put in a stronger performance, and this led to some early buying appearing in an effort to build, with an early high recorded at $721.80 before prices eased to consolidate the upper teens. With prices moving sideways so volume fell away and there was no change to the picture until the early afternoon when from nowhere the market plunged to $713.00 on just 95 lots of volume. Some stability followed before a second leg lower that saw the price fall to $705.00, a dramatic turnaround which wiped out all the good work achieved yesterday. The lows turned out to be short-lived with the market quickly turning around, reacting to a No.11 recovery fuelled by news that the latest UNICA numbers were lower than expected, and across the next hour the price recovered back to the $714.00 area to minimise net losses. Recent activities have suggested that this would put the market back on its firm path but todays activity was proving to be a little quirky and instead prices pulled back once again, placing values bear to session lows as we reached the final hour. The close played out right around these lows to leave Aug’23 settling at $705.30, a disappointing performance which may well leave the market back in consolidation mode for the near term.
