Having lost more than 2.50 points in just four sessions there was some justification for expecting the market to have some kind of bounce, however this was not to be and following a brief print to 23.75 during the opening moments the market quickly continued lower. There was a varied flow of trade and consumer buying reaching the market that proved insufficient to support values, the technical weakness drawing in sellers and sending the price another half cent lower to 23.16 within 30-minutes before easing and providing traders with the chance to assess the situation. It was not long before new lows were being recorded with a nudge down to 23.09, though with some weightier buying placed ahead of 23c there were no further losses uncured as the rest of the morning played out calmly just ahead of these lows. It was only with the arrival of US specs that a little more selling started to appear, and though initially this led only to marginal new lows a crack beneath 23.00 did trigger some fresh sell stops that set a new recent low mark at 22.79 as we waited the latest UNICA announcement. The news that for the first half of June Brazil had produced cane at 40.299mmt / Sugar 2.550mmt / Mix 48.95% / ATR 135.65 was pretty much in line with informed estimates, though clearly interpretations varied as the ensuing period saw Oct’23 shoot back up to 23.30 before swiftly retreating beneath 23c once again. If nothing else this did seem to serve as a break from the relentless pressure and Oct’23 enjoyed some calmer trading either side of 23c over the next couple of hours. The situation for Jul’23 was also calmer today, with Jul/Oct’23 holding a tighter band between parity and 0.10 points premium, the bulk of the rolling now concluded as shown by the Open Interest figure at 41,839 lots, a modest number that will further diminish over the rest of this week. There were no fireworks during the closing stages, leaving Oct’23 to conclude another poor performance at 22.98, technical weakness clear for all to see though the rapid nature of the fall and oversold short-term indicators could bring some respite.
The past few sessions have seen the market reverse away from the highs at a rapid pace, and having generated a negative technical close last night the pattern was being maintained with further losses seen across the board upon today’s resumption. Aug’23 lots $10 almost instantly and despite a mixture of consumer and trade buying interest vs physical activity/pricing coming to the market there was only some brief respite as a second wave of selling sent the price beneath $630.00 with barely an hour of trading completed. Naturally, this pace was not maintained despite the lack of any reasoned support and the pace of decline eased across the rest of the morning, though notably there remained zero interest in defending against the move from funds as they accept the battle is up form the moment. White premiums were by now under more severe pressure and were giving back the gains made when No.11 collapsed yesterday afternoon, with Oct/Oct’23 slipping back below $118.00. Another wave of selling through the early afternoon sent Aug’23 to a session low at $614.50, before the pressure eased in line with the latest Unica announcement from Brazil. Having lost so much ground it was to be expected that there was some kind of relief “rally” and the remainder of the session saw the price action move away from the lows against continued consumer buying and small spec short covering. By the close Aug’23 had returned to the upper $620’s, though settlement at $627.20 still leva ethe picture looking vulnerable.
