The market began the week trading moderately lower with a further decline to 19.81 following to leave the values somewhat stranded and with the momentum that was regained at the end of last week immediately lost. Friday’s COT report had seen the speculative long increase by more than 87,000 lots and stand at 131,628 lots long, a larger increase than some had been predicting despite the significant market gains. This raises questions as to how much more the sector will buy without the larger hedge funds also loading to the long side, however this morning the sense of apathy seemed to be more to do with technical exhaustion and the need to let indicators unwind than any material shift in view with the positive outlook continuing to be fuelled by concerns over the availability of Indian sugars. Some light spec activity during the early afternoon did take March’23 up to 20.00 however there was limited interest to continue the move and so process retreated to the range once more. The lower end saw mild extension with a nudge down to 19.73 during the afternoon, however with the specs as quiet as they have been in a while and no macro influence the range endured for the duration of the day, leaving an inside day on the chart with the resultant close at 19.86 doing little to please either bulls or bears. The market remains a touch overbought on the charts which may temper the enthusiasm of some, and with the Thanksgiving holiday approaching on Thursday maybe the broken nature of the week will lead to continued calm trading for the coming days.

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The whites had few friends as the new week got underway with some sharp losses, March’23 slipping quickly to $535.10 before finding an element of stability. The situation then calmed and for the next few hours prices saw very little movement to either direction as many traders retreated to the side-lines, possibly with a sense of relief for some after the wild movements seen over the month to date. The start of the Americas day drew a little defensive buying into the markets from specs which pulled the market back up into the upper $530’s, however the move proved to be limited and as the buying eased so process slipped back through the range. New session lows were recorded at $532.70 while the weakness permeated to the spreads and arbs, with March/May’23 into $7.80 and March/March’23 dropping back beneath $100 to trade at $97.50. Despite the near-term fatigue and inevitability of an inside day on the chart we still saw some defensive buying for the final hour take the price back towards $540 before some late position squaring left March’23 settling where it had spent a large part of day, valued at $535.90.

  

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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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